Don't Be Fooled! How Traditional M&A Differs From Digital M&A

Over the past few years, we have seen a rising trend in digital technologies driving tech M&A deals for both tech and non-tech companies.

Technology brings its own set of challenges to the M&A space. The following are some of the many differences between traditional and digital M&A:

• Wider target list: The list of targets in a digital M&A tends to be longer than in a traditional, non-digital deal. Therefore, a need for new screening methods arises if digital targets are involved.
• Financing and valuation methods: Digital assets are often considered to be too expensive. Valuing digital assets begins with determining how the acquisition will impact the growth-value profile of the company's stock and equity profile. As target digital assets tend to be expensive, the avenues for financing an acquisition through the use of shares is limited. That being said, acquisition based on a 100% cash deal may also expose a company to overvalued goodwill and future