As previously discussed on this blog, the first half of 2015 has seen significant mergers and acquisitions activity. According to data from PricewaterhouseCoopers, the $875 billion in M&A deal value thus far in 2015 marks a 9% increase over M&A deal value this time last year. For this reason, among others, there is optimism that 2015 will be the best merger market since the financial crisis. And growth is expected to continue.
Conveniently, as the market is heating up, a new trend has been sparked in the M&A world: corporate matchmaking. In practice, this movement is exactly what it sounds like: it's basically a form of online dating... but for companies.
There are now a variety of platforms that allow CEOs to offer global business opportunities, such as a potential M&A deals, to possible corporate suitors online. Banks, financial companies, and other M&A advisors pay a fee to access the platforms and then offer the opportunities to their client members.
One such company is The Opportunity Network. The Opportunity Network is a digital platform which allows users to publish strategic business opportunities (provided each opportunity is worth over $1 million) on an anonymous basis. The posts can be accessed by reputable financial institutions or service providers who communicate those opportunities to prospective buyers. Interested buyers may then take the next steps to connect with sellers via email.
The MergersClub offers a similar corporate matchmaking service to its members. The MergersClub is a free service available to M&A professionals, and offers a private and secure online space within which members may connect, build their respective networks, share mandates, and accelerate their deal making processes. The platform enables members to quickly and effectively explore thousands of mandates (including on an international scale) with a view to uncovering potential counterparties for a transaction and uploading, reviewing, and even buying or selling mandates.
Finally, DealNexus is yet another example of corporate matching at work. The DealNexus platform facilitates corporate document sharing and allows transactions to pass through a secure cloud. Large-scale mergers and acquisitions are just one of the endeavors it facilitates, providing members immediate access to an extensive network comprised of thousands of strategic and financial acquirers and capital partners.
So will these new online corporate matchmaking platforms lead to increased M&A dealmaking? As with most things, only time will tell, but in the meantime we recommend that both potential suitors and their targets do their due diligence.
The author would like to thank Gillian Moore, summer student, for her assistance in preparing this legal update.
Norton Rose Fulbright Canada LLP
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