Cloud-based data warehousing solutions from Snowflake offer bottom-line advantages during the 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. Many times this data is shared via spreadsheets and data dumps that are difficult to manage and consume by the seller. Snowflake provides a centralized and managed data hub to that data that can be secured and exchanged with the buyer. This capability minimizes costs and improves the overall governance of the shared data. The ability to share this data via the Snowflake platform allows live data sharing with the buyer without moving or copying the data.
For the buyer, Snowflake’s capabilities provide a clear answer to several data management issues. For example, where do they load the data? How do they integrate it with current systems? What do they do with data that lives outside of the systems?
Snowflake provides an elegant low cost solution to load this data in a staging area, build out the integrations, and keep a copy of the data long term so it is at their disposal, and only paying for compute 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. The acquiring company can then transform their data for their application integration needs. This also reduces the potential or need to load all data into applications since it will not cost the company, other than storage to query this long term.
Closing Thoughts re: Snowflake and M&A Data Sharing and Integration
The Snowflake cloud-based data warehousing solution provides a clear win-win for both buy and sell sides of the A&D equation. Snowflake’s low-cost/unlimited storage platform enable sellers to share contractual information with buyers more easily. More importantly, it enables buyers to more quickly consume and integrate acquired-asset data more quickly, allowing them to meet TSA agreements in a more timely manner.
NOTE: To find out more about how we can help your organization on the buyer or seller side share and consume data, contact Stonebridge.