A.I. Auto-Generates M&A Candidates

42.cx, November 13th 2019

During a global partner conference of an international M&A firm in Madrid, 42.CX presented the utilisation of IP and Intangible Asset analytics to enhance the process of M&A related short-list generation. Traditionally, when Company X wants to expand in a particular technology area and wants to prepare a list of potential acquisition candidates, questions around how to identify targets or how to rank them arise. A classical job for an M&A advisory firm. 42.cx presented a machine learning based approach, where an M&A target list was created by analysing the buyers’ technological scope by generating a competence cluster based on its intellectual property. Support vector machines are analysing all patent filings and understand what areas the acquirer owns technologies in. For each area, the machine maps every patent of the acquirer with every patent of the potential targets and provides an overview of its relatedness and closeness. The result is a scatter plot, visualising the top M&A targets, the “M&A shortlist”.