Legal and Financial Advisor are Raising the Bar: Online Documents = Better Client Service

Jun 29, 2009 - by Joel Lessem

Being organized ultimately means less mistakes, getting the work done faster and providing superior service.  Whether it is completing a transaction,  structuring a businesses or managing a clinical trial are volumes of documents.   Having documents highly organized, accessible and online access reduces the voicemails, "lost" e-mail attachments and miscommunication that frustrates any collaborative process.  As one attorney commented

“My important clients use the internet for convenience with their other service providers. They bank online, they book travel online, they file taxes online - and I want to be able to provide them with a convenient way to work with me, online!  Either I proactively set up online access to key documents for my clients; or wait until they demand it because everyone else is doing it. And since there is virtually no material impact to my practice – why should I wait?”

Virtual Data Room Activity a Leading Indicator?

Jun 29, 2009 - by Aaron Booth

Over 250 financial and legal advisory firms are using their own, privately branded Firmex data rooms. Firmex-powered deal activity was up 255% in Q1 2009 versus a 10% decline in Q4 2008.  According to Firmex’s M&A advisory clients, the increase is a result of sellers bringing deals back to market. The majority of the increase occurred late in Q1 2009, and the trend is continuing into Q2 2009.

Firmex advisory clients are busier with more deals, and the deals are lasting longer and appear to be more challenging to close. Tight credit conditions and lower valuations are most likely key factors. Over time, the number of active deals that firms are managing in this environment is increasing and deals are being reviewed by many potential buyers. This puts pressure on deal makers, as deal cycles are long and unpredictable.

Firmex helps to alleviate this pressure by allowing firms to manage an unlimited number of deals indefinitely in their virtual data room. Deals can be started, stalled, and reopened as needed, in a fast, easy and efficient manner. In addition to securely sharing due diligence information, Firmex is also being used to organize the distribution and storage of NDAs, Information Memorandum, and LOIs. This flexibility and deal lifecycle management enhances M&A advisory firm’s ability to react quickly for clients.  This is especially important when deals get hot and being “deal ready” will help to close deals faster and mitigate risk of the deal stalling.

State of the M&A Markets - First Quarter 2010

May 6, 2010 - by Mike Rosendahl

After the 2009 recession, expectations were high for renewed M&A activity coming into 2010. As Michael Rosendahl of PCE Investment Bankers, reports, Q1 2010 numbers were somewhat of a disappointment.  Deal volume was highest for distressed companies and companies performing strongly. Companies that fall in between these two categories are having difficulty finding an acquirer. In today’s post, Rosendahl points out that while results were below expectations, the consensus is for an uptick in activity as the year progresses since strategic (corporate) and financial investors (private equity groups) are actively searching for acquisitions.

The first quarter of 2010 started off slower than expected. Nearly all parties were anticipating increased activity for 1Q10, but reality has yet to catch up with expectations. While there are still companies attempting to be sold, the process is taking longer and buyers are more selective. For the companies that are performing well, there is an active market. Companies that are struggling are seeing less interest and lower valuations. In addition, sellers are waiting for valuations and company performance to improve with the hope that they will be able to increase their proceeds from a sale. Today, many business owners are willing to speak about a transaction, but are very slow to move forward.

Market Activity

Transaction activity decreased in all valuation segments in the 1Q10. For acquisitions below $50 million, the decrease was -1.5% versus 4Q09; a negligible drop. Deals in all the other valuation segments sustained more substantial decreases. Transactions between $50 million and $100 million decreased -16.3%, while deals between $100 million and $250 million decreased -25.5%. Additionally, transactions above $250 million decreased by -17.8% in 1Q10. The large decrease in volume with increasing multiples for higher valuation segments is evidence of a point made in a recent article by Mark Aronson, a colleague of mine, who stated that there is a flight to quality for larger transactions.