Cloud-based data warehousing solutions offer bottom-line advantages across M&A activities, for buyers and sellers alike.
M&A’s Data Management Challenge
Due to the overall market pressure in the oil and gas industry, mergers, acquisitions and divestitures are occurring more and more frequently. One of the major challenges in M&A activity, for sellers and buyers alike, is data management—i.e., managing the massive amounts of information produced and consumed throughout the process.
From the seller perspective, the key challenge is how to securely share information with the buyer. On the other side, the onus is on the buyer for consuming the acquired asset data and integrating it into their systems, or standing up the necessary systems and getting the data integrated, as per the terms of the contract.
Time Is Of the Essence
Typically, these agreements are governed by a transition services agreement. TSAs are contracts that outline responsibility on both the sell and buy sides. The seller is responsible for ensuring that information is shared fully with the buyer. The buyer has the responsibility to stand up systems and integrate the data.
More importantly, TSAs are time-based. Buyers typically faces stiff financial penalties if they do not successfully stand up and integrate this information into their systems within a defined timeline. Relying on the seller to provide transition services after the deadline can cost the buyer significant dollars.
Advantages for Buyers and Sellers
It is imperative that the seller provide the buyer with the required contractual data in a timely manner. All too often though, this data is shared via spreadsheets and data dumps that are difficult to manage and consume by the seller.
As an interim solution while the groundwork for rationalizing data and software ecosystems is laid, cloud-based data warehouse services like Snowflake provide a secure and centralized M&A data hub. This capability minimizes costs and improves the overall governance of shared data. The ability to share this data via the Snowflake platform allows live data sharing with the buyer without moving or copying data, saving valuable time, and shrinking M&A timelines. For the buyer, Snowflake’s capabilities provide a clear answer to several data management questions: where does the seller load the data? What do they do with data that lives outside of the systems? how does the data get distributed within the buyer’s organization?
Snowflake provides an elegant low cost solution to load M&A data in a staging area and keep a copy of the data long term, so it is at the buyer’s disposal. Services like Snowflake are “pay as you go” –
users only pay for computer resources when they are querying the data. Because Snowflake uses low cost storage (Blob/S3), all the acquired data can be loaded into a staging area with minimal cost.
Final Thoughts
Cloud-based data warehousing solutions provide a clear win-win for both buy and sell sides of the A&D equation. The low-cost/unlimited storage platform enable sellers to share contractual information with buyers more easily. More importantly, it enables buyers to consume and integrate acquired-asset data more quickly, allowing them to meet TSA agreements in a timelier manner.
To find out more about how we can help your organization on the buyer or seller side share and consume data, contact Stonebridge. Our M&A integration practice manages the entire process including post-merger data and software rationalization for ERP and production accounting. Our 100% focus on energy and M&A process accelerators are your strategic advantage for efficient onboarding of assets and containing M&A costs.