Death Of A Salesman: Goldman Is Building An App To Find M&A Deals And Ward Off Activist Investor “Attacks”

Are you a Goldman Sachs client stuck at home and, as a result, worried that the M&A pipeline might dry up? Perhaps you’re worried that an activist investor could take advantage of the Covid-19 lull and make a run at your business?

Don’t worry, there’s an app for that. 

That’s because the investment bank is literally in the process of building an app that offers its clients a method for matchmaking and brokering M&A deals – all from their home, all from their phone. 

The technology that Goldman is using is called Gemini and the software is already being used internally, according to Bloomberg. Clients will soon have access and Goldman hopes that it will be used to identify potential M&A deals and portions of a company’s business that could be vulnerable to attacks from activist investors. 

Clients can also use the app to identify sale or spin-off opportunities, says David Dubner, Goldman’s global head of M&A structuring.

He said: “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 pro-actively or having investors push companies to do it, is here to stay.”

The app breaks down how different divisions of a company perform relative to peers, offering up a sum-of-parts style analysis and analyzing how a business could grow through mergers and partnerships.

It uses a formula that compares revenue growth, profit margin and other metrics as a percentage of sales. It compares these numbers across a wide peer set to score individual segments. Eventually, the app has the potential to replace some of the traditional roles undertaken by bankers; like playing matchmaker or helping clients network for M&A chances.

“We have a long-term view that technology and big data are going to be core aspects of the M&A business,” Dubner concluded.

Meanwhile, we know where Goldman really got its matchmaking algorithms…