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Merrill Corporation

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Boston Groundview: local deal trends, buyside growing pains and how project managers are like interior designers

by Abby Roberts, Director of Content

Alexia Rains

Alexia Rains started as a project manager in Merrill Corporation’s Minnesota office, and moved to Boston three years ago to cover the corporate development and legal market for DatasiteOne. She’s an avid golfer and loves to travel around New England checking out local food and brewery spots.

Q. What local transactional and due diligence trends are you seeing in the Boston market?

In Boston, the two most active sectors are life sciences and technology. Large biotech and pharma businesses are on the prowl for biotech and healthcare software tools to help them scale. The fin:tech startup space also is booming. Boston is well-known as a life sciences and technology hub, but the fin:tech sector is newer and on the rise. 

With life sciences, things got off to a rocky start this year, as people waited for the government shutdown to end before filing with the SEC. Now the local market looks a lot healthier, and due diligence activity is starting to pick up. I expect summer to be busy, as dealmakers try to catch up from the early year delay. 

Figure 1. Boston activity by DatasiteOne sessions

Boston Heat Map

Figure 2. Top 10 most active M&A cities in Massachusetts by DatasiteOne sessions

Bubble chart of top 10 Massachusetts cities' activity: Boston as the largest by a wide margin followed by Cambridge and Somerville; then Belmont, Marblehead, Woburn, Needham, Waltham, and Arlington.

From a due diligence perspective, the question we always get asked is, “When do we start using a technology partner such as DatasiteOne instead of a file sharing tool?” I’ve been asked that by companies in sectors ranging from software to consumer retail to biotech and pharma.

Due diligence processes are starting earlier in the financing cycle than ever before, so the answer is you need to be ready to share documents in a professional manner from the get-go. You can use a due diligence app for small funding rounds and progress it through all your transaction events.

The other big due diligence trend we see is the expansion and professionalization of buyside workflow.  Corporate development teams work with many other internal departments on each transaction, but sometimes don’t have a consistent workflow or program management approach. They may need to grab people unexpectedly from other departments, for instance.

Now multiply that internal management challenge by the five to 10 buyside processes many large companies conduct each year, and you’ll see the organizational problem suddenly becomes much bigger. Buyers need a consistent workflow and programmatic approach.

At a practical level, one-way buyers improve workflow is by taking key people from each functional group and making them part of the core deal team, usually about a month before the deal gets announced. The largest support groups involved are usually Legal, HR and Tech, though it varies on a deal by deal basis. With life sciences, for example, scientists will often participate in the integration process.

Q. What’s your top advice on setting up a data room successfully?

Coming from the service side, my top tip is to treat the project management team the same way you would any other advisor. Have a conversation with them about the problem you are trying to solve, not necessarily how you think you should get there.

Sometimes I talk through real-life scenarios from when I was a project manager. And people are like “Oh wow, that’s what you do?!” 

Like interior designers or other organizational experts, our project managers have tremendous knowledge and experience on how to arrange a data room to drive efficiency. The client can think of one way to do things, but the project manager can often come up with better ways. For example, a client might say, “I’m trying to group these users this way so I can report on XYZ”. A project manager might show them how to solve for this problem, not just for the short term but for reporting all the way through the deal process.

Q. What do clients’ value most about DatasiteOne?

Repeat and completely new clients are realizing that DatasiteOne is far more flexible than traditional data rooms. Companies find new ways to use DatasiteOne daily, even if it’s just sharing content with their team in Europe in a secure way. We embrace those use cases, because the more feedback we receive the more features and functionalities we can add.

Our product team has done a tremendous job of incorporating client feedback into how we build out the site. As a result, we can be more confident as sellers that we can give the clients what they want.