For the last few years mergers and acquisitions activities have been moving from the golf course to online deal sourcing platforms. Social dealmaking has only continued to gain traction amongst buy-side and sell-side professionals who respond that online deal sourcing has become a regular part of their workflow.
Intralinks DealNexus, one of the leading global dealmaking platforms, announced today it saw a 99 percent increase in the number of actionable M&A opportunities in 2013 than the prior year (from roughly 1 thousand actionable deals to two thousand), and are on track to double again in 2014 (four thousand). The average deal size in 2013 is up almost 30 percent.
The platform matches pre-approved investment banks, corporations, family offices, junior and senior lenders, M&A advisory firms, private equity groups and merchant banks with appropriate M&A opportunities that meet their specific user-submitted investment criteria. This drastically reduces the time spent searching for perspective partners.
"As word has spread about Intralinks DealNexus, the number of firms using it has grown and the number of deals being done on it has nearly doubled. We hear from our customers all the time that social dealmaking is supercharging their overall M&A process." said Tony Hill, Director of DealNexus at Intralinks in a press release.
[For more on social deal making platforms, read: Private Equity Warms to Funding Portals]
"I think there was question in the mind of dealmakers if this was a fad or here to stay, and I think that questions has been answered," adds Hill in an interview. "I can't stress enough the importance of the increase in deal flow volume. That statistic really speaks to everything else; the growth, engagement, satisfaction, and number of deals actually closing as a result of relationships and introductions our platform intelligently made."
There have been a number of dealmaking platforms over the years. Hill estimates he has seen around 30-40 launched and fail. The market has largely consolidated to only a handful. "It's a good thing, it had to happen," he explains. "You can't have multiple networks just like there aren't multiple Facebooks. There's only one because that's where the critical mass is, and that's the value."
A survey commissioned by Intralinks in December of 2,400 M&A professionals found more than 55 percent of dealmakers currently use online deal networks to support deal sourcing. Among those, over 50 percent of buy-side and 40 percent of sell-side have closed a deal sourced on an online network. Nearly all surveyed, 70 percent, said online communities of M&A professionals make the deal sourcing process more efficient.
"Using this technology has effected their closed deals," adds Hill. "Those statistics are farther ahead than we thought they would be. It's clear the industry has proven its value." Becca Lipman is Senior Editor for Wall Street & Technology. She writes in-depth news articles with a focus on big data and compliance in the capital markets. She regularly meets with information technology leaders and innovators and writes about cloud computing, datacenters, ... View Full Bio