How can Diligen assist with Due Diligence Projects?
What are the typical issues during Due Diligence?
When an M&A transaction begins, there is often a rush to complete the due diligence work as quickly as possible. M&A due diligence can be very chaotic and challenging and there are a number of challenges to getting the review done. The challenges include the potential lack of organization of the documents, being able to effectively communicate review requirements from the client to the reviewers, having the reviewers quickly and efficiently extract the necessary information and finally to being able to summarize and report the findings in a clear and concise manner. In addition, often requirements change during the transaction's negotiations, causing the reviewers to have to respond to new questions.
All of this of course needs to be done within an incredibly short deadline as time is of the essence in every due diligence project. But documents take time to review properly and cutting corners during due diligence exposes buyers and sellers to avoidable risks. Leveraging the use of artificial intelligence with a tool such as Diligen, to enhance, expedite and improve the review process has become an invaluable tool while providing a way to manage costs effectively.
How can Diligen improve the Due Diligence process:
Diligen helps review teams save time by identifying key provisions, automatically compiling summary reports and helping teams manage the review process.
Use of Artificial Intelligence
Diligen uses Machine Learning to rapidly identify key clauses in contracts. For example, Diligen will quickly identify key information such as change of control or assignment provisions in a set of contracts and allow the user to navigate to the exact provision in one click.
Diligen has hundreds of out-of-the-box models to identify clauses in contracts.
Organization
Even if companies have contract management or lifecycle software, documents are not always organized in an efficient manner. Diligen assists in the organization of the documents by providing the following:
- performs OCR on all uploaded documents (in order to analyze scanned documents)
- identifies and/or eliminates duplicate documents
- retains a folder structure to the documents (if present), or allows for creation of folders
Advanced Search capabilities
Diligen has an advanced search engine which reviewers can use to do the following:
- Search by the presence or absence of a particular clause across all documents
- Search for keywords, including keywords within specific clauses (for example, the term 'consent' within a change of control provision)
- Provides multiple ways to search through projects, including multilayered searches such as for documents that are within a certain date range and have a particular party
Communication/collaboration
When a due diligence project begins, a user can choose Diligen's preset M&A review template which will guide the reviewer through the standard due diligence questions. Diligen can also work with you to help you set up your own bespoke review template with unique review questions and instructions so your team always has clear guidelines available for their review and you can avoid costly delays by reviewing only the points necessary to your specific transaction.
Project management
Diligen makes it easy to manage a review with multiple reviewers. You can easily assign out contracts for review and track as they are reviewed. Documents that aren't contracts can automatically be detected and marked out of scope if appropriate. Diligen's workflow makes it easy for multiple reviews to collaborate on the review of a contract.
Summarize and report
Users can automatically create due diligence summary reports in either Microsoft Word or Excel. While there are preset report options available, the reports are completely customizable and can include any selection of provisions and data points. Reports are created in a matter of seconds and can be used to promptly update clients at any time during the project. The reports also include hyperlinks to the document within Diligen so any Diligen user can connect back to the document immediately if necessary.
Additional tools
Diligen also has tools available so you can train your own custom machine learning models for a client's specific use cases. The process is very simple and with minimal training you can learn to train new models in under an hour.
Cost Savings
The amount of review time saved depends on the depth of the review and the size of complexity of the document, but it's estimated that using Diligen to assist with due diligence review can speed up the review process by anywhere from 50-80%.
Why use review software?
- Significantly reduce review time
- Rapidly surface key information in contracts – focus on what matters most
- Meet tight deal timelines while doing thorough, high quality review
- Reduce risk that critical language has been overlooked
- Reduce project management time
- Avoid writing off time for fixed fee or capped fee transactions
- Reduce strain on review team when taking on multiple review projects
While M&A due diligence projects can be chaotic and disorganized, Diligen proves to be an invaluable tool by providing a powerful platform that significantly reduces review time and costs. By leveraging Diligen's artificial intelligence capabilities to immediately extract crucial information right away, Diligen can give reviewers a very clear picture of what they are working with right away after the upload of documents. Diligen's advanced search capabilities are also indispensable to handle urgent client requests and inevitable new questions that surface during the transaction. Using Diligen will provide any M&A due diligence team with the security of knowing they can quickly and efficiently handle the complexities of any M&A review project.