Artificial intelligence (AI) is helping information technology (IT) companies find potential merger and acquisition (M&A) targets, leading to a surge in such deals, especially small-ticket ones. Besides, global tech giants such as IBM, Accenture, and others are also making a string of acquisitions of Indian IT/SaaS firms to fortify their capabilities in technology consulting, digital transformation, IT infrastructure, cybersecurity, cloud solutions, and renewable energy analytics.
Maneesh Bhandari, co-founder and CEO of Pune-based fintech firm GrowthPal, said the company has facilitated 41 M&A deals in multiple geographies with the help of data and AI.
Founded in 2020 by Bhandari and Shalu Mitruka, GrowthPal specialises in off-market deals both locally and internationally. The firm said it has curated 150 M&A pipelines and discussed offers worth over $1.3 billion. GrowthPal has closed deals in the US, the UK, and India and covers other global geographies as well. It functions as an AI-powered investment banker and identifies acquisition targets strategically aligned with a company’s global expansion goals.
GrowthPal said it is making smaller transactions, around $1-50 million, economically viable and scalable. “This is a segment often neglected by traditional investment bankers due to the high costs associated with deal sourcing and execution,” Bhandari said.
GrowthPal leverages AI to provide buyers with potential acquisition options within two weeks of outlining their criteria, dramatically accelerating the deal-sourcing process across borders. Cash-rich companies are increasingly pursuing micro-fit M&As, cross-border opportunities, and bolt-on acquisitions, which can be easily captured using AI, Bhandari explained.
Some recent examples of cross-border deals in this space include Pune-based Zensar’s acquisition of Bridgeview Life Sciences and Persistent’s acquisition of US-based software firm Starfish Associates for $ 20.7 million. “We are seeing a strong trend among Indian IT companies seeking to acquire small- to mid-sized IT services firms globally, aiming to access new clients, expand geographically, build onshore and nearshore teams, and establish a broader global presence,” he said.
According to Bhandari, AI-enabled M&A is transforming how buyers identify and evaluate potential targets. Rather than opting for large, one-off acquisitions, companies are focusing on a series of smaller, more frequent deals to create a continuous acquisition engine. This approach encourages them to look beyond businesses that are actively for sale, proactively identifying those with valuable capabilities or technologies.
GrowthPal’s research for 2024 shows a surge in cross-border deals in IT services, especially in generative AI, blockchain, and regional expansions. There has been a rise in inbound and outbound IT services cross-border deals in the Indian market in 2024.
Growthpal leverages data from over 5 million small- and mid-sized companies across 60 sources and geographies. It functions as an AI-powered co-pilot to the corporate development teams of acquirers.
Industry reports estimate that GenAI will be used in 80% of M&A processes in the next three years, rising from the 16% usage today.
