Technology M&A

Nov 22, 2016 | by Kyle Kalinich, SVP, Aon Strategic Advisors & Transaction Solutions

Many, if not most, companies in today’s economy are on a journey of digital transformation. Nearly every aspect of every business has the potential to be transformed by advances in cloud and mobile computing, ubiquitous sensors producing endless streams of data, and ever more intelligent algorithms.

What we call a “technology company” is becoming increasingly fuzzy. All we have to do is look at our own industry, Insurance and Brokerage, to see these blurred lines that are affecting every industry.

In the midst of this rapid change, Aon’s Strategic Advisors & Transaction Solutions (ASATS) group has been challenged to re-think our client needs. Many of the deals we have supported our clients on in 2016 are traditional non-digital businesses buying technology companies. How do we use our core competencies in Risk, Health, Talent, Retirement, Capital, and Data & Analytics to help our clients get ahead in this digital journey?

Our initial efforts have been rewarding, all built on Aon’s proprietary data and analytics platforms. For example, we have invested in solutions to help our clients manage risk and capture value around intellectual property (not the first thing that comes to mind when you think about an insurance broker!). We’re closing the gap of our clients’ inability to benchmark the intellectual property assets of a target company – thereby supporting the valuation and strategic value creation processes. Our IP Intelligent Analytics lead to value optimization and monetization – we’re currently engaged to support one of the largest technology transactions in history.

We’ve also noted the correlation between intellectual property and talent. How do you attract and retain the people responsible for the asset value of the target? Fortunately, we have Aon Radford with their industry-leading analytics to help a buyer get The People Questions right for investment success. Sophisticated market assessments can be combined with creative ideas to establish ideal compensation packages.

Aon’s acquisition of Stroz Friedberg unleashes a whole new set of cyber risk management capabilities for our clients – and not a minute too soon. We need to help our private equity clients to identify and address the cyber risks that could kill the value of their investments. We are developing new due diligence solutions and new portfolio solutions to meet these rapidly expanding risks.

Lastly, technology poses unique demands when buyers and sellers negotiate the terms of purchase agreements. Intellectual property assets raise a variety of issues: chain of title, patent infringement, licensing arrangements to name a few. We’ve committed expert resources to maintain our industry-leading position on using insurance capital (i.e. Reps & Warranty Insurance) to manage these risks.

These M&A challenges and solutions are all interconnected in the newly emerging economy. We recognize these issues cut across every sector of our economy and we are excited about the opportunities this presents to Aon Strategic Advisors & Transaction Solutions.

See you on the front lines in 2017.

For further information, please contact Kyle Kalinich at 1.312.381.4296/[email protected]

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