MARKET OUTLOOK
due diligence stage of an acquisition. When PwC maps this to the recent deal activity happening in the region, they are seeing industries such as Financial Services, Healthcare, Retail and Consumer as investable sectors all focused on enhancing their digital footprint. From the survey findings, it is clear that digitisation means different things to different private equity houses. Some see it as an enabler to maximise revenues within a fairly short timeframe. Others see it as a way to improve management reporting, with better- quality data feeding better informed decision making. There is a general consensus over the need for better information systems including real time information.
REAL LIFE SCENARIOS That said, for all of the recognition of digital’s importance, private equity companies are cautious about their initial investment decisions and they are
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What do we mean by digitisation? Transforming analogue and manual processes, functions and tasks into digital throughout a company.
unlikely to be early adopters of the latest technologies. Given capital constraints and holding periods, with typical investors looking to sell assets after 3-5 years, private equity houses will adopt a very pragmatic approach to digitisation. Private equity houses will carefully consider the solutions to be rolled out, ensuring they have been tested before committing to them. The risk and costs of testing a very innovative solution will probably exceed the expected return in their typical time horizon. Digitisation is not something
75%
OF PE HOUSES ARE NOW FOCUSED ON THE DIGITAL MATURITY OF A COMPANY AT DUE DILIGENCE STAGE OF THEIR ACQUISITION
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