Liminal case study

M&A Advisory and Transaction Readiness for AI-Powered Fraud Protection

3/23/21

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Challenge:

As global digital transformation accelerates, how are global companies best positioned to fight the growing problem of online fraud while reducing customer friction?

 

One of the world’s largest data and analytics companies recently evaluated the prospective acquisition of a fraud prevention and risk management player to expand its worldwide footprint in digital identity solutions. To facilitate their due diligence process, the corporate development team of a proposed buyer engaged Liminal to perform a deep-dive analysis of fraud prevention, authentication, Customer IAM, and digital identity solutions. As part of the engagement, Liminal evaluated broader market dynamics, a competitive assessment of leading solution providers, and plausible post-acquisition growth opportunities.

The Action

Operational Due Diligence

 

Quick and accurate identity trust decisions can deliver safe payments, account creations, and login events, while reducing digital fraud, chargebacks, false positives, and manual reviews. Leading technologies across fraud prevention and risk management solutions offer machine learning and Artificial Intelligence backed by high-quality transactional, device intelligence, and digital identity data sets that enable a full 360-degree view of an organization’s customers across their user journeys. To evaluate the target’s product portfolio, the Liminal team assessed value pools in case studies across industries including eCommerce, financial services, regulated gaming, and healthcare. With a keen eye towards past and current performance, top-line growth opportunities, and the target’s underlying risk model and data elements, the Liminal team was able to provide our client with forecasts and recommendations on the target’s future performance and the viability of its assets. 

Over the course of the engagement, Liminal collaborated with our client on:

  • Market Due Diligence
  • Operational Due Diligence

 

Market Due Diligence

 

To avoid direct margin pressure, large-scale digital identity players have been focused on building full-stack platform solutions that service the consumer journey and go beyond traditional fraud and risk scoring. Resultantly, institutional market players are advancing their capabilities and expanding into adjacent solution segments, such as identity verification, identity resolution, and multi-factor authentication. The Liminal team prepared a comprehensive analysis of the dynamics of fraud prevention, risk management, and authentication to establish the value proposition of the target’s product portfolio. As a result of the analysis, Liminal supported our client with a data-driven assessment of the target’s addressable market size, the attractiveness of its product-market fit, the relative position of the target’s competitive service providers, an overview of the evolving regulatory landscape, and potential market risks that could pose potential post-acquisition disruptions.

The Outcome

Leveraging Liminal’s proprietary market sizing and vendor ranking methodology, the team delivered a comprehensive evaluation of the target’s performance, position, and future capabilities across critical use cases that can accelerate international adoption. Liminal established a value proposition for the acquisition of the target to uplevel our client’s international go-to-market strategy and to elevate their competitive position across the digital identity landscape. As a result of the engagement, our client has announced a definitive agreement to acquire the target.

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