Deal Sourcing: Direct marketing in a pre-auction process

Direct marketing in a pre-auction process

Online platforms such as Intralinks DealnexusTM are making the marketing of companies a much simpler task thanks to the vast number of potential buyers that are already online. 

Rather than reaching out to 40 to 50 potential acquirers by phone or email, as in the past, the sell-side can now discretely reach hundreds of intelligently-matched, pre-qualified buyers at the push of a button.

When Rob Gettinger, a senior investment banker at the Yale Group in Denver, recently was given a mandate to handle a liquidation by a family office holdings company, he turned to an online deal sourcing platform to launch a deal marketing process.“The platform usually adds between 50 and 200 buyers in addition to the names I already have in my Rolodex,” Gettinger says. “The best part is they are almost all highly qualified. I would estimate 80-90% are fully funded institutional organizations if not strategic buyers.”

Adds Bill Stewart, vice president of American Healthcare Capital in Marina del Rey, California, “the buyers on the platform are usually pretty serious and they have the funds and the wherewithal to close a transaction.”

Gettinger notes that the platform is important because sellers often don’t want to engage in an auction process. “In the deals that I’m working on, which are generally $10 million to $100 million revenue companies, the owners want a quick, negotiated process,” Gettinger says. “In many cases it’s not a 100% sale, there’s some retained equity.”

14 October 2014