Tinder for M&A?

Goldman Sachs is tapping into the remote-working boom through Gemini, an app that offers clients the technology to assist with their matchmaking. The technology is already being used internally by Goldman’s bankers but will now be made available for their clients.

Gemini breaks down how different divisions of companies are performing, showing if they can grow through mergers and partnerships. It can even detail the ones that are ripe for disposal. More specifically, the app will supposedly assess various revenue and profit metrics, as well as environment, social and governance standards. For clients, this tech can be useful when evaluating potential deal opportunities (e.g. carve-outs, PIPEs, spinoffs, or SPACs).

David Dubner, Goldman’s global head of M&A structuring told Bloomberg "Investors are going to continue to scrutinize companies with multiple business lines". "The trend of corporate simplification, whether that's by selling or spinning assets proactively or having investors push companies to do it is here to stay."

There are some concerns relating to cultural integration and whether a deal could lead to the right cultural fit with people that have had limited face-to-face contact. Additionally, there is also speculation that the introduction of this efficient technology could displace certain roles. However, it has been mentioned that this app is not to be used as a replacement for the firm’s advisory services and instead as a supplementary tool. Dubner also stated that Goldman has “a long-term view that technology and big data are going to be core aspects of the M&A business”.

Overall, it is definitely a tool with strong capabilities that has the potential to revolutionise the way deals are executed in the future, especially given the seemingly never-ending uncertainty surrounding the impact of this pandemic.

It is worth noting, however, that this concept is not exactly entirely new. The term 'tinder' for deals has been thrown about for a few years now, in relation to computerised M&A matchmaking services. Back in 2015, the M&A and capital raising platform Axial Networks provided a service that could match up companies with potential buyers simply by swiping right on their Tinder-like platform. Essentially, executives or prospective sellers plug in the company’s key information and financials. The platform then uses an algorithm to match the company with prospective buyers, or even lenders and investors if the aim is to raise capital instead of selling.