More than a third (36 per cent) of M&A dealmakers believe that online deal sourcing will eventually revolutionise the M&A industry, according to a new survey carried out by Intralinks. In 2013, that number was only 23 per cent.
Some 31 per cent of respondents polled for the Deal Networks and the Evolution of Getting M&A Deals Done survey currently use an online deal network to support deal sourcing. Of sell-side M&A professionals using online sourcing platforms, nearly 50 per cent have marketed at least one deal online in the last 12 months and 28 per cent have marketed more than five deals online in the last 12 months.
Among users of deal sourcing platforms, 45 per cent of buy-side and 39 per cent of sell-side professionals have closed a deal that was sourced on an online network.
Some 62 per cent of deal-makers agreed that online deal sourcing allows them to identify counterparties they otherwise would not have found.
At least in terms of supporting dealmaking activities, dealmakers are eschewing the larger, conventional social networks in favour of “specialised” deal networks with more customised functionalities, with respondents citing lower daily usage of the former, but higher daily usage of the latter.
The survey shows that dealmakers are realising the importance of incorporating online deal sourcing into their broader dealmaking and social media strategies. This is especially the case as online deal sourcing networks continue to gain ground while social media businesses continue to soar. On the buy-side, nearly 85 per cent of respondents who use deal sourcing networks reported that they source deal opportunities online and 44 per cent reported that their firms source between 11 per cent and 50 per cent of their total deal flow online.
“As online deal sourcing continues to go mainstream, it is more critical than ever for M&A professionals to at least gain an understanding of the online deal sourcing landscape,” says Tony Hill, director of Intralinks Dealnexus. “In an otherwise fragmented industry, online deal sourcing networks offer the only true ‘gated’ communities of any substantive scale where qualified dealmakers can find one another and interact. After surveying members of the largest dealmaker community in the M&A industry, our research proves that the prevalence of social dealmaking within the M&A industry is rising.”
Donald W Grava, founder and president of Versailles Group, Ltd, a Boston-based investment bank, says: “The most important thing in middle market M&A transactions is to make sure that the buyer or seller receives exposure to as many targets or buyers as possible.
“Digital tools, such as Intralinks Dealnexus, provide an excellent way to expose a transaction to multiple parties virtually instantaneously. The same type of coverage that Intralinks Dealnexus provides would take an enormous amount of time and resources. Intralinks Dealnexus generated exposure to almost 400 possible buyers for a single transaction we posted. That’s the power of a robust tool like Intralinks Dealnexus in the digital age.”
