Datasite automates M&A and speeds redaction by 80%, saving customers valuable time with Azure Cognitive Services

Trustworthy due diligence

Selling a company is usually a once-in-a-lifetime event. The company being acquired must execute numerous unfamiliar steps. Datasite offers end-to-end support in this complex process to help all parties in M&A have a smooth experience and successful outcomes. Datasite provides leading web-based software tools for the M&A industry and serves customers in 170 countries.

At the beginning of the M&A process, a selling company will hire an investment banker to coordinate a strategic sale. The banker helps the company curate the sensitive data and documents that are needed for the sale, working with the company’s internal leaders across HR, finance, and intellectual property protection. Eventually, the number of prospective buying companies gets whittled down to a few finalists that need to see this detailed information about the seller to make a buying decision. This is called the due diligence phase of a deal, where the seller must provide essential financial and operational data. This data often includes sensitive business information and personally identifiable information (PII), so many sellers share it in a highly secure virtual data room.

However, because multiple potential buyers have access to the data room, the seller needs to redact the PII for legal and security reasons. The selling team determines the named entities associated with the PII that it needs to redact. Historically, the bankers, lawyers, and other selling team members would then manually comb through thousands of documents to find and address that information. It had to review documents, black out data, possibly print and rescan the documents, and then upload them to the data room.

“Manual redaction was a big pain point for all parties, especially the investment bankers who prepare the deal,” says Ashish Pagey, Vice President of Artificial Intelligence at Datasite. “It’s a very slow, cumbersome process.”

Speeding up redaction with AI

Datasite wanted to automate redaction in its industry-leading Datasite Diligence application to take place quickly, accurately, and securely. The company knew that the process could be streamlined by adding AI, such as natural language processing capabilities. After evaluating various options, Datasite chose Microsoft Azure Cognitive Services because it offered the sophisticated AI and powerful modeling the developers wanted. 

The company developed a feature called Redaction AI to augment its Datasite Diligence application. The feature uses Azure Cognitive Service for Language to automatically evaluate the text in all the seller’s documents. Redaction AI draws on the named entity recognition cognitive skill to extract named entities from text using sophisticated AI. Now everyone on the selling side can use Redaction AI to redact named entities in batches instead of going through one by one. 

“It’s incredible to think about what redaction was like for customers before and after,” says Thomas Fredell, Chief Product Officer at Datasite. “By having access to these text models in Language Service, we give them the option to batch work that they would have otherwise done individually. Sellers might have up to 100,000 documents associated with a deal, so the time savings can be absolutely massive. Datasite’s powerful technology platform, now with AI features enabled by Azure Cognitive Service for Language, can potentially compress weeks of work into days for our customers.” 

Adds Chris Miley, Senior Product Manager for AI ML at Datasite, ”We’ve had customers tell us that Redaction AI saves them up to 80 percent of the time and resources previously needed to complete the redaction requirements of a deal.” 

Moving faster increases the likelihood of a more successful sale for sellers because any slowdown to the deal process can damage a potential acquisition. “We have a saying here at Datasite—‘Time kills all deals,’” says Dayo Famakinwa, Vice President of Product Management at Datasite. “If you’re trying to sell or buy a company, external factors such as the economy or a global pandemic are more likely to change the dynamics of the deal the longer things take. Time is of the essence to redact content quickly and to do everything you can to close as soon as possible.”