Digitalization and AI in M&A Deals
Companies without AI implementation and a clear digital strategy are already seeing significant price declines.
Leading AI labs are partnering with the largest private equity firms to establish their own implementation firms to prepare their portfolio companies for an exit.
This sends a clear signal to the M&A market: technology and AI are essential components of every deal.
A new market segment has emerged within just a few months. Anthropic, Blackstone, and Hellman & Friedman have founded Ode, an independent company with $1.5 billion in capital, whose engineers implement AI directly within companies. OpenAI launched its deployment company with a $4 billion investment at a pre-investment valuation of $10 billion, led by TPG, Advent, Bain Capital, and Brookfield.
Now Europe is following suit: Anthropic and Hg plan to launch an AI consulting firm with offices in London and Berlin by the end of the year.
The world’s largest investors are pouring substantial sums into AI and technology. This speaks volumes about how they will value, buy, and sell companies in the future.
• Buyers bring their own AI requirements to the table. Those with direct access to Frontier Labs evaluate each target based on what it could achieve with AI and what has already been implemented.
• A strategy alone is not enough; implementation is crucial. An AI roadmap without implementation is priced into due diligence as a shortcoming, not as a growth opportunity.
• The focus is on the impact on and changes to the business model. Above all else, buyers examine whether AI poses a threat to the business model. The best response to this is having their own AI already deployed in the market.
• The pool of buyers is shrinking. Companies without an AI strategy or implementation are increasingly finding only buyers who want to compensate through price.
Conclusion
The establishment of these implementation firms is the clearest evidence that AI is no longer an optional consideration in the exit process. For founders and investors in the DACH region’s SME sector, this means that a digital AI strategy must be in place and initial implementations must be visible before the data room opens.
With a clear strategy, visible implementation in the product or processes, and metrics that demonstrate the impact.
Technology is now part of every deal. Entrepreneurs who take this into account early on will determine their company’s value tomorrow.