Where are agency buyers looking as AI changes the deal process? 

Corporate and public affairs, data and AI, and live experience are attracting buyer interest. At the same time, AI is raising the demands of due diligence.

Watch SI Global's Q4 M&A Update with Partner, Tristan Rice.

Since our last update, SI Global has completed five more deals, with a further six at Heads of Terms. Across the wider market, deal announcements have also picked up. Social, creator and commerce remain active, but several other segments are drawing buyer attention.

Corporate and public affairs

Corporate and public affairs has been particularly active. PPHC, FGS Global and Excellera have all made acquisitions in the segment in recent months. SI Global’s sale of Tancredi to PPHC was part of that activity.

With trade policy and regulation shifting constantly, companies need experienced counsel. Acquirers are also looking for the senior relationships that come with it. It’s a well-established M&A segment, but there is still clear appetite to build new private equity-backed platforms.

Data and AI

Data and AI capability is another area of interest. Accenture acquired London-based customer intelligence business Sagacity, which brings proprietary data and specialist expertise. PwC’s Strategy& has agreed to acquire AI consultancy Datasparq.

Both deals reflect demand for capabilities that can be hard to build in-house: distinctive data, technical skills and the people who know how to apply them.

Live experience

Live experience is also attracting investment. Private equity-backed platforms have continued to expand: CloserStill acquired ROAR B2B, Nth Degree added INVNT, and Impact XM combined with Jack Morton.

As social feeds fill with AI-generated content, brands are placing greater value on opportunities to meet people face to face.

Across these segments, buyers are investing in capabilities that are difficult to reproduce with AI alone: specialist expertise, trusted relationships, proprietary data and live experiences.

AI is changing due diligence

AI is influencing the deal process, too. Buyers can use it to review public information about a business before the first meeting. That makes it especially important for the story a company tells in a sale process to match what buyers can already find.

Once a process is under way, a buyer can run a data room through an AI model and generate hundreds of detailed questions quickly and cheaply. The answers still need careful human oversight. Each must be accurate and defensible, and many may ultimately feed into warranties and disclosures.

AI can pose a sharp question or suggest a response, but it cannot take responsibility for the liability. That means the deal process asks more of everyone involved than it did even a year ago.

Two priorities for founders

For founders considering a transaction, two priorities stand out.

First, assess how AI could affect your clients’ buying decisions. Clients are learning to use AI, too. They may look to capture some of the savings through lower prices, and over time may bring more work in-house. Map your revenue against that risk, and focus growth on stickier services — increasingly, those built on proprietary data or specialist expertise.

Second, prepare early and allow enough time for the process. Due diligence now draws heavily on management time. Companies that continue to trade well during a sale process are usually better placed to achieve a strong outcome.

If you’re considering a transaction and would like to discuss what these changes could mean for your plans, get in touch with SI Global.