Over the past few months, several colleagues and friends asked me why I went back to the M&A tech space. When drilling further into the questio, the implication is that Virtual Data Rooms (VDRs) are understood and the problem of securing deals is solved. Indeed, most deals over $5 million USD that include some competitive element will use a VDR. The likelihood is even higher with asset-based industries such as Oil and Gas or Manufacturing. And then you come across statements like this from the CEO of Salesforce.
Depending on what the exact price per share is, @twitter is a USD $12B -$15B deal that didn’t happen. Ignoring any technical valuation challenges, @markbenioff is really saying the deal didn’t happen because someone, somewhere could not keep a lid on the information they had access to. As a result the share price went wild, media had a field day and analysts were busy briefing their clients. Under these circumstances it’s difficult to negotiate and craft a common vision for shareholders.
The reality is bankers and lawyers who want to make a living always pitch companies to potential suitors, irrespective of whether the company is actually for sale. Current deal volumes and values are the results of macro-conditions and years of work building relationships. That is the nature of the M&A game.
To lessen the likelihood of a leak, market participants can expect their VDR provider to have very detailed levels of permissioning -- much more sophisticated than what a file storage product offers. Should a leak occur, a technical audit trail can be used for information forensics. That doesn’t help if a deal falls through, but at least lessons can be learned for future permission assignments and information access controls.
This is where a good project management organization fits in. Merrill Corporation has the experience, having secured deals for more than 10 years. Merrill’s Services group is not to be confused with Support. These teams really know their M&A stuff. They can advise users on things to do and what to avoid while helping secure the process. Frequently we even do this on behalf of clients, especially ones that are new to this space.
As far as Twitter is concerned, watch @merrillcorp. Sounds like they are still on the block. But if the next deal were to be done on our platform, closure success would be much higher.
Axel Kirstetter, VP Product Marketing