With the help of Intralinks, the Philadelphia Stock Exchange (PHLX), the nation’s first stock exchange, leveraged its small in-house legal team to manage a global due diligence process.
“IntraLinks enabled us to conduct our transaction on a world stage. We raised our profile from a regional stock exchange to one of international interest.”
– Scot Donnini, Associate General Counsel, Philadelphia Stock Exchange
After successfully selling the organization to NASDAQ for $652 million, the stock exchange continued to use Intralinks to facilitate the integration of the two organizations.
The Philadelphia Stock Exchange was known for its technologically advanced trading platform. Ironically, its internal operating systems hadn’t kept pace. The stock exchange used a paper dataroom to facilitate investor due diligence.
When outside interest in buying the organization heated up in 2007, the legal team knew it needed to find the most efficient way to facilitate a sale. The small legal team could not afford to dedicate the hours required to “man” a paper dataroom, nor were its facilities large enough to host the many investor teams expected to conduct due diligence.
They also knew that using a paper dataroom might disrupt business operations, as seeing potential buyers in the building often causes anxiety amongst employees.
The team chose Intralinks ExchangesTM to efficiently market to suitors around the globe. Intralinks offered a user-friendly way to manage due diligence, creating a more flexible online version of its old paper datarooms. The Intralinks dataroom housed more than 20,000 pages, the equivalent of 20 bankers’ boxes of materials. With Intralinks, prospective buyers could conduct their due diligence concurrently, helping to accelerate the process. IntraLinks’ reporting tools enabled the PHLX’s executives to see patterns among the various bidders such as, who was going into the dataroom, what they were looking at, and when they were doing it. This not only helped determine if all the right information was posted, it also helped gauge buyer interest based on the activity on the Intralinks platform.
As many as 15 entities, from other stock exchanges to venture capitalists to large corporations, visited the exchange. Some bidders had more than 50 people reviewing information at the same time, including internal teams and external advisors. They came from as far away as Singapore and Brunei. Using Intralinks improved the stock exchange’s operational efficiency, global reach and reputation. Attracting a large slate of international suitors helped fuel competition, ultimately leading to a desirable valuation. After just two months of due diligence, the NASDAQ Stock Market bought the Philadelphia Stock Exchange.
Intralinks continued to pay dividends for the stock exchange. The post-sale integration process was easier. For starters, a complete archive of the exchange’s documents was created to reconcile corporate activity between the announcement and the close. NASDAQ reviewers were then directed to the information they needed on the exchange. Additionally, Intralinks served as the corporate repository for the stock exchange’s documents.