Get the Right Deals at the Right Time: Private vs. Marketplace Process

In this post of our Intralinks Dealnexus Knowledge Series, you'll learn the difference between a Private and Marketplace Process in a blind deal profile.


13 November 2014

Get the Right Deals at the Right Time: Throttling – A Positive Driving Force

The Intralinks Dealnexus® Knowledge Series is a monthly post of topical articles authored by members of the Intralinks Dealnexus team, created to help you make the most of the expansive platform and deal ecosystem.

In this post, you'll learn difference between a ‘Private Process’ and ‘Marketplace Process’ when creating and managing a blind deal profile. (If you missed last month’s posting, “Get the Right Deals at the Right Time: The Buy-Side Mandate,” you’ll find a link to it at the end of this post.)

This month we’re exploring the two ways in which blind Deal Profiles can be created, distributed, and monitored — the Private Process and the Marketplace Process — in the context of our unique real-time deal activity tracking features. Understanding the difference between the two processes is critical to striking the right balance between Intralinks Dealnexus’ industry-leading security and control features, and its far-reaching, real-time deal marketing capabilities.

Whether you opt for the Private Process or the Marketplace Process, the starting point for taking a deal to market on Intralinks Dealnexus is the same: it begins by clicking on the “Create Deal Profile” button and filling out the brief Deal Profile form that appears (which can take as little as one minute to complete for experienced users). The system will then prompt you to select the kind of deal process best suited for your needs — to maximize your deal marketing success on Intralinks Dealnexus.

The Private Process

As the name suggests, the Private Process is the most secure way to discretely share a blind Deal Profile on Intralinks Dealnexus, giving members absolute control over which potential buyers and investors can see an opportunity, and when. A seller can elect to share a Deal Profile with only one suitor, or with hundreds; only those corporations or private equity groups expressly selected by the seller will have access to the deal. Everyone else on Intralinks Dealnexus will have no idea whatsoever that the Deal Profile even exists. The seller alone decides.

Typically, the Private Process is used for deals of a more-sensitive nature, or those in which the client is actively involved in selecting or approving potential buyers. Today, approximately, one out of three deals are run through the Private Process. Oftentimes, a banker will start a deal as a Private Process and, later on, convert it to a Marketplace Process. This switch can easily be made from anywhere in the Deal Manager.

The Marketplace Process

The Marketplace Process is essentially the opposite of the Private Process and is akin to an “autopilot” approach. When an investment banker or M&A advisor selects the Marketplace Process, Intralinks Dealnexus instantly identifies the best possible suitors — by cross-referencing the attributes of the blind Deal Profile with the user-submitted investment criteria of over 2,500 corporations, private equity groups, family offices, and the like. Additionally, Intralinks Dealnexus willl automatically ping the investment banker or M&A advisor with a Deal Match Alert (an email notification alerting them to a positive deal match with their investment criteria). In addition to directly notifying potential buyers, the Marketplace Process also makes the Deal Profile “searchable” within the Deal Marketplace — a master repository of all active Marketplace Deals located under the Search menu.

Naturally, a Marketplace Process is usually selected for less-sensitive deals, when an investment banker wants to cast a wide net of potential buyers around the world. Today, approximately two out of three deals are deployed using the Marketplace Process.

The heavy preference for the Marketplace Process — despite the near-ubiquitous need for deal security and confidentiality in M&A — can be explained by two important factors.

  • First, the majority of our sell-side members understand that the Deal Profile form shared with potential buyers and investors is blind. In other words, nowhere within the Deal Profile is the identity of a client ever disclosed. In fact, the average Deal Profile contains significantly less information than the average teaser. This is not a coincidence. Intralinks Dealnexus designed the Deal Profile form to contain only enough information for a potential buyer to make a yes or no decision on interest, and no more.

  • The second reason the Marketplace Process outnumbers Private Process is simply that, as Intralinks Dealnexus’ more-experienced members are aware, Dealnexus upholds strict membership requirements. Not only are all applications to join the Intralinks Dealnexus ecosystem closely examined, but, in addition, a phone interview and thorough on-boarding process is required before a new firm’s application is ultimately approved. These strict eligibility guidelines ensure that all member companies on Intralinks Dealnexus — both on the buy-side and the sell-side — are qualified, versed in the proper mid-market M&A decorum, and trained on how to properly utilize the platform.

Monitoring Your Deal Process in Real-time

Whether you select a Private Process or a Marketplace Process, one feature that both approaches share is the ability to monitor buyer activity and interest in real-time, directly from the Web or on our mobile apps for the iPhone and iPad.

The Deal Activity Stream, located in the Control Panel tab of the Deal Manager, logs and timestamps all deal-related activity within the Intralinks Dealnexus system. From the moment a potential buyer is added or removed, to when he or she first views the Deal Profile or downloads a deal-related document (such as a teaser or NDA), or when/if they pass on the deal, the Deal Activity Stream displays this information in a real-time log — increasing bankers’ visibility into who has looked at their deals and when.

I hope you found this second installment of our Intralinks Dealnexus Knowledge Series informative. If you missed last month’s posting, check it out: Get the Right Deals at the Right Time: The Buy-Side Mandate. Or for more information about taking a deal to market via a Private or Marketplace Process (or to schedule a phone call or demo), please contact the Intralinks Dealnexus Member Success Team at DealnexusClientSupport@Intralinks.com.

Stay tuned for next month’s installment, where we will examine the top five ways buy-side firms optimize the quantity and quality of  the Marketplace and Private Process deal flow they receive.

 

Previous articles in this series:

Get the Right Deals at the Right Time: The Buy-Side Mandate



Kevin Faroni

Kevin Faroni

Kevin has extensive experience in the fintech space, originally working in a startup division of the Mergermarket Group that was later acquired by Intralinks. During his tenure with Intralinks he led a team to scale a software assisting buy- and sell-side firms in their deal sourcing and deal marketing efforts, across a myriad of industries around the globe. From there he joined SS&C to form a newly created software division focused on front and back office solutions for private equity, hedge funds, venture capital, family offices and real estate funds.