Hi-Tech Deal Networks Redefining The M&A Process

Hi-Tech Deal Networks Redefining The M&A Process

A survey of over 2,400 M&A professionals reveals that the traditional methods for identifying and screening buyers or sellers, marketing and monitoring deal flow – in fact the whole M&A deal-making process – is getting a complete makeover through the advent of online deal sourcing platforms.

These deal networks, which complement social networks such as Facebook and LinkedIn, are becoming useful and additional tools to be used along with traditional deal making methods to close that all-important M&A transaction.

Networks and social computing changing M&A industry

According to ‘How Deals Get Done,’ a report that presents the results of a September 2013 M&A survey conducted by Intralinks, there is growing evidence that deal sourcing networks and social computing are changing the mores within the M&A industry.

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The survey revealed that over half of the dealmakers now use online deal networking platforms as a means to identify or market M&A deals. Significantly, more than 50% of the buy-side, and over 40% of the sell-side professionals achieved closure of a transaction that was initiated on an online deal platform.

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Significant driver for adopting deal networks

“Making the deal process more effective and less time-intensive is a significant driver for adopting deal networks, with 69% believing that having an online community of M&A professionals would make deal sourcing and marketing more efficient,” says the report.

The wide-ranging survey encompassed professionals across North America, followed by Europe, Middle East and Africa (EMEA) and Latin America, with over 72% located in North America. Furthermore, the respondents were drawn from all M&A hierarchies ranging from Associate to C-level/Partner/Owners, and covered M&A segments from the lower middle market through the bulge bracket.

“Enthusiasm for deal sourcing networks is strong: two-thirds of respondents predict that online deal networks will change the way deals are done, while over 60% expect deal sourcing to become more automated over the next five years,” says the survey.

M&A professionals are keen to increase marketing efforts

According to the report, M&A professionals are keen to increase the ambit of their marketing efforts, as well as find new deal partners through the use of deal sourcing platforms. This is reflected in the improving trends in deal closure, as well as deal volumes.

M&A deal-flows

Limitations of social media in M&A

One interesting finding emerging from the survey is that social media in M&A is somewhat limited – it’s suitable for sharing news as well as personal networking, but not effective as a means for locating deals or marketing them.

On the other hand, deal platforms such as Intralinks DealNexus allow for networking as well as deal closure. They also act as a level playing field, allowing organizations of all size to participate in successful M&A.

Professionals could use the Intralinks DealNexus platform to augment and enhance their traditional sourcing techniques as well as to interface with a global network of M&A players.

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