How Gen-AI Automation is Reshaping M&A Due Diligence

In the fast-paced world of mergers and acquisitions (M&A), time is not just money—it's a competitive advantage. The due diligence process, often seen as the most critical and time-consuming aspect of a deal, is undergoing a transformation. Automation is reshaping the landscape, enabling companies to cut through the complexity of deal-making with newfound speed and efficiency.

As global M&A volumes remain robust, despite challenges such as rising interest rates and economic uncertainty, technology is becoming necessary for dealmakers to stay ahead. According to a recent report from Deloitte, companies are increasingly turning to automation to streamline due diligence and reduce costs. The report highlighted that 58% of firms are adopting digital tools in their deal processes, driven by the need for faster and more accurate data analysis.

In a high-stakes environment, time spent sifting through documents, tracking changes, and coordinating with multiple parties can delay decision-making and put deals at risk. Automation addresses these inefficiencies by using artificial intelligence (AI) and machine learning to handle routine tasks that were once manual. For instance, AI-powered document review systems can analyze vast amounts of data in seconds, identifying red flags such as compliance issues or discrepancies that might take human reviewers days or weeks to uncover.

Due Diligence Efficiency Gains and Risk Reduction

The value of automation goes beyond just speeding up processes. It also plays a key role in risk mitigation. With the increasing complexity of regulatory environments and data privacy laws, automation helps ensure that critical compliance checks are not overlooked. According to a report by EY, regulatory scrutiny in M&A is at an all-time high, and dealmakers rely on automated tools to manage the growing burden of legal and regulatory review.

Automated systems can track and log every action taken on a document, providing a comprehensive audit trail—a crucial feature in today's highly scrutinized deal-making landscape. The ability to quickly access version histories and compare document changes in real-time ensures that legal teams can focus on higher-value tasks rather than administrative oversight.

Streamlining for Strategic Growth

As companies look to execute more strategic deals, their reliance on automated systems is only expected to grow. Tech and healthcare sectors, in particular, embrace automation in M&A due diligence as they navigate increasingly complex deal structures. An analysis by PwC highlights that tech companies, which account for nearly 30% of global M&A activity, are at the forefront of adopting automated tools to streamline integration and capture growth.

Despite these advancements, automation in M&A due diligence is not just for industry giants. Mid-sized firms also recognize the potential of automated solutions to level the playing field. By cutting down on manual labor, companies of all sizes can allocate more resources to strategic decision-making rather than operational tasks.

Smartsheet: Introducing Collaborative Spreadsheets

In recent years, Smartsheet, a well-known project management tool, introduced live spreadsheet functionality, offering a collaborative approach to managing due diligence requests. This was a significant step forward for deal teams, allowing them to send out diligence request lists and track real-time responses across multiple parties. Smartsheet's collaborative live updates made it easier for legal teams, financial analysts, and third parties to contribute to a single, centralized diligence tracker, reducing the friction typically associated with back-and-forth email chains.

However, while Smartsheet's live spreadsheet model added value for tracking diligence requests, it had limitations. The tool broadly applied to managing trackers and didn't address more complex aspects of the due diligence process, such as document versioning, compliance automation, or integration with legal workflows. Smartsheet's pricing model was also considered costly for some mid-sized firms, particularly those needing broader automation capabilities beyond essential project management.

For many companies, Smartsheet represented a step in the right direction. Still, its high cost and narrow application meant it often served as an interim solution rather than a comprehensive due diligence automation tool.

RedlineDCS: Bringing Automation to the Forefront

RedlineDCS, a deal collaboration software designed to empower deal teams through advanced workflow automation, is at the heart of this shift toward automation. RedlineDCS streamlines due diligence by automating key tasks such as non-disclosure agreement (NDA) workflows, document version control, and compliance certainties.

What sets RedlineDCS apart is its focus on minimizing legal risks while accelerating the deal process. By integrating AI-powered tools directly into its platform, RedlineDCS helps deal teams reduce errors, shorten timelines, and ultimately close deals faster. As the M&A landscape continues to evolve, the role of automation will only become more critical, and companies like RedlineDCS are in charge of reshaping how due diligence is done.

In an era where speed and precision can make or break a deal, automation is no longer a luxury—it's a necessity. Whether you're handling complex cross-border transactions or navigating strict regulatory frameworks, the future of M&A is clear: automation is here to stay.

Written by Sarah Park, a guest financial writer covering the latest trends in corporate finance, technology, and mergers and acquisitions.