June 15, 2017

Study: How are Deals Getting Done?

This new study from MergerMarket & Donnelley takes a look at how buyers and investors are being selected and approached in M&A, IPOs & divestment transactions.  Here’s an excerpt with some of the key findings:

– Negotiated sales are the deal-sourcing method of choice. Some 82% of respondents said that their use of the negotiated sales process had increased (32% of which said it had increased significantly) in the past five years.

– Finding a buyer is a slower process. Some 46% of respondents say the period of time between deciding to sell an asset and finding a buyer has increased over the past five years.

– Technology and electronic tools have changed the way sell-side dealmakers target buyers. Face-to-face meetings have become less frequent according to 52% of respondents, who attribute this to online tools such as virtual data rooms, deal marketing solutions, and video conferencing.

– Gauging what type of deal and when to execute it has also become increasingly difficult. Some 72% of respondents say that gauging market conditions to pick the best time to execute an IPO has become more erdifficult.

The study suggests that, overall, the marketing process for deals is becoming more targeted. In addition to the dramatic increase in negotiated sales, 30% of respondents said that their use of a broad auction process has declined somewhat over the past five years, while 60% said they are using targeted auctions more.

John Jenkins