AI’s role in M&A: Accelerating deal success
Posted by | Fuld & Company
Fuld’s webinar, AI’s Role in M&A: Accelerating Deal Success explored how artificial intelligence (AI) is transforming the M&A landscape, particularly for middle-market firms.
Industry leaders Jeff Cruz, former Managing Director at Greenwich Capital, and Shawn Flynn, Principal at Global Capital Markets, joined Alok Tayal, Managing Partner at Fuld & Company, and Nilesh Sharma, Senior Vice President at Fuld & Company, to discuss AI’s growing impact on deal processes, enhancing decision-making, and shaping the future of investment banking. Key topics included the use of AI to prepare companies for market, manage exits, streamline deal journeys, and navigate the challenges of AI adoption.
AI as a strategic enabler in M&A
AI has become a critical asset in the M&A process, especially for middle-market firms. It streamlines key stages like target identification, due diligence, and deal execution, helping firms gain a competitive edge across sectors like health tech, consumer tech, data centers, and medtech. AI is no longer just about automation—it’s about providing strategic value.
Industries are using AI to accelerate innovation, improve decision-making, and enable more personalized engagement with customers. The ability to automate and enhance processes has positioned AI as an essential tool for firms looking to stay ahead in data-driven markets.
“AI is becoming a key consideration in board meetings and strategy sessions, particularly in sectors like technology and consumer products, where acquiring AI capabilities can provide a significant competitive edge.”
Shawn Flynn
AI’s growing influence on middle-market firms
AI is increasingly being used by middle-market firms to improve M&A outcomes. These firms are leveraging AI to prepare companies for market, set realistic expectations for exits, and enhance deal execution. More firms now consider AI capabilities when assessing acquisition targets, reflecting a shift in how AI is valued within M&A strategies.
Recent data shows a notable rise in the number of AI-driven deals. This indicates a growing recognition that AI can drive operational efficiencies, improve customer personalization, and help firms maintain competitiveness in fast-evolving markets.
“40% of middle-market firms now consider AI capabilities as a critical factor when assessing acquisition targets, a substantial increase from 20% last year.”
Alok Tayal
Efficiency gains in deal execution
AI is driving significant time and cost savings across various stages of the M&A process. AI tools have reduced time spent on target identification by 40%, and screening efforts by 25%, with further efficiency gains expected as these tools continue to evolve. Automating repetitive, data-heavy tasks frees up professionals to focus on strategic analysis and decision-making, speeding up the overall process.
“In target identification, AI has reduced time spent by 40%, and in screening, there’s a 25% time savings. These numbers are expected to increase over the next few years.”
Alok Tayal
However, despite these gains, the landscape of AI tools remains fragmented. Many solutions are specialized for different parts of the deal process—ranging from due diligence to integration—without a unified platform to streamline the entire M&A journey.
“The challenge is there isn’t an efficient marketplace yet where AI-driven tools can seamlessly connect buyers and sellers in M&A transactions.”
Jeff Cruz
Challenges and barriers to AI adoption
While the benefits of AI are clear, many firms face barriers when adopting the technology. Integration with legacy systems, talent shortages, data quality concerns, and the cost of AI tools remain significant obstacles. For middle-market firms, the challenges are particularly acute when aligning AI tools with existing infrastructure.
Moreover, concerns about data security and privacy are at the forefront. Firms must navigate regulatory concerns, especially when using proprietary data to train AI models, and ensure that their systems are compliant with emerging standards.
“Even integrating AI tools with legacy systems like SAP can be challenging, and firms often lack the internal knowledge to manage and structure data effectively for AI use.”
Jeff Cruz
The AI marketplace and investment hype
As AI gains traction in M&A, there is also skepticism about whether the technology is being overhyped. Some companies position themselves as “AI firms” without truly leveraging AI’s potential, leading to concerns that the market could be entering bubble territory. However, while the AI buzz is undeniable, the panelists agreed that AI as a concept and tool has tangible, long-term applications.
“Not all of these companies are truly AI companies, but the AI concept itself is not a bubble. AI is finding new applications every day and will continue to evolve.”
Shawn Flynn
The consensus was that while some companies may be using AI as a buzzword, the technology itself is fundamentally transforming how industries operate. The key for firms is to make judicious investments in AI solutions that deliver real value and innovation.
The future role of AI in M&A
As AI continues to evolve, it is expected to take on more transactional tasks, allowing investment bankers and deal-makers to focus on higher-level strategy. However, the human element in M&A will remain essential, particularly for managing client relationships, complex negotiations, and regulatory compliance.
Ethical considerations around AI’s use, especially in financial services and healthcare, were also highlighted. AI’s reliance on data can sometimes lead to unintended consequences, such as biased decision-making, that firms must carefully manage.
“AI’s reliance on data means it can sometimes result in decisions that aren’t in the best interests of everyone. This is something firms will need to navigate carefully.”
Jeff Cruz
Looking ahead, AI will likely evolve into niche applications that address specific stages of the M&A process, improving efficiency while maintaining the need for human expertise in more strategic areas.
“AI may not take your job, but if you know how to use AI, you’ll definitely have a job in the future.”
Shawn Flynn
AI is changing the M&A landscape, particularly for middle-market firms. By streamlining processes, improving decision-making, and providing new tools for target identification and due diligence, AI is becoming indispensable in deal-making. While there are still challenges—especially in terms of integration and data security—AI’s role in M&A will continue to grow as firms embrace its potential.
The future of AI in M&A is bright, but firms must be careful in their investments, ensuring that the solutions they adopt provide genuine value and align with their strategic objectives.
“AI will play an increasingly significant role in M&A, but firms must be judicious in their investments and focus on tools that deliver real results.”
Shawn Flynn
Read more:
How we helped an investment bank close over $350m in M&A deals
For more information on Fuld’s Financial, Equity and M&A Research services, contact us today.
Tags: Artificial Intelligence, Financial Services, Investment Banking, Mergers & Acquisition, private equity