Get the Right Deals at the Right Time: Smart Moves for Increasing Add-On Opportunities

Learn about the growing importance of add-ons (AKA bolt-ons) for private equity portfolio companies, and how Intralinks Dealnexus is used for deal sourcing.


18 November 2015

Intralinks Dealnexus Knowledge Series

The Intralinks Dealnexus® Knowledge Series is a monthly series 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 about the growing importance of add-ons (also known as bolt-ons) for private equity portfolio companies, and how Intralinks Dealnexus can be used as a smart resource for deal sourcing in this area.

This year we are on track to see over 5,000 deals marketed on Intralinks Dealnexus globally — up from 3,600 in 2014. Aside from having the right filters or alerts in place, I am increasingly being asked by portfolio companies about how we can help them identify suitable targets for add-on acquisitions.

When I look at the statistics, it makes sense that this topic is coming up more often. With the relatively high prices of standard buyouts, portfolio companies are boosting profits with bolt-on M&As. Last year we saw 1,139 add-on transactions, as we discussed in a round table a couple of months ago — the most since 2006, according to data compiled by Prequin.

When I ask my clients about their key criteria for add-ons, I receive two very common responses aside from specific sector requirements:

  1. The company could be based globally
  2. The portfolio company would consider a smaller target, since size isn’t as important as it is for platform acquisitions.

From an add-on perspective, these criteria greatly enhance the number of relevant deals available on Intralinks Dealnexus.

With offices in Asia, Europe, and the Americas, we have substantial deal flow across all continents and, although we target deals with a minimum EBITDA of USD 2m and above, we place no limit on the size of deals that can be marketed on Intralinks Dealnexus. Often relevant, smaller targets will be widely available.

Three main tactics can be deployed to bring you additional add-on targets. Your Intralinks Dealnexus account manager can set these up for you to save you time.

  1. Set up a private filter for each portfolio company. Based on factors such as the sector, size, and location of the desired add-on(s), we will upload a private filter for each portfolio company, which ensures you are alerted to every corresponding deal that hits the platform.
  2. Use our “buy-side mandate” tool. Whereas the deal alerts are more reactive, the buy-side mandate tool is more proactive. It is intended to bring you additional relevant sell mandates, not be an advertisement that you are looking for buy-side advisors. With some high-level info on your portfolio company and the types of add-ons you’re looking for, we can automatically inform our community of thousands of M&A advisors that have actionable matching deals. You can upload a buy-side mandate in the name of your portfolio company, the name of your fund, or even in a blinded format. Using the name of your portfolio company is likely to generate more responses as advisors are keen to find strategic buyers for their deals.
  3. Automatically upload your portfolio companies onto Intralinks Dealnexus. At the end of last year, Intralinks partnered with PEI services to add 57,000 portfolio companies onto Intralinks Dealnexus. These portfolio companies can be automatically loaded onto your account, and you can specify the add-ons you are seeking. Keywords in the deal descriptions will be matched with keywords in your portfolio companies. When there is a match, you will receive notice about the deal.

By deploying these three tactics, buy-side firms can enhance the number of potential global add-on targets in a time- and cost-effective manner.

Please feel free to connect with me if you’d like to discuss your current portfolio company add-on requirements. I’d be more than happy to send you the list of the matching opportunities we have on Intralinks Dealnexus. You can reach me at amarshall@intralinks.com.

 

Previous articles in this series:

Get the Right Deals at the Right Time: How White Glove Service Amplifies the Power of Intralinks Dealnexus Matchmaking Technology
Get the Right Deals at the Right Time: The Buy-Side Mandate
Get the Right Deals at the Right Time: Private vs. Marketplace Process
Get the Right Deals at the Right Time: Buy-Side Firms
Get the Right Deal at the Right Time: Online Deal Sourcing Goes Mobile
Get the Right Deals at the Right Time: Intralinks Partners with PEI Services — Benefits for Sell and Buy-Side Members
Get the Right Deals at the Right Time: Throttling – A Positive Driving Force

 



Anthony Marshall

Anthony Marshall

Anthony Marshall has been with Intralinks Dealnexus for over two years, and currently heads up our EMEA buy-side coverage, which consists of Private Equity, corporates, family offices, lenders and venture capital firms. Anthony started his career at Bloomberg and has about 10 years of business development experience, primarily in the fintech space.