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Virtual Deal Making and the Rise of Contactless M&A

Something happened at our firm during the pandemic that we never thought possible. We closed our first ever “zoom” transaction.

We never met with the seller (our client), we never met with the buyer (a private equity group), and the buyer never met with the seller. Nobody got on an airplane for a face to face. Nobody camped out for two weeks at the seller’s office during due diligence.

We signed the engagement and closed the transaction during the start and finish of the worst periods of the lockdown.

Deal Timeline

Date Event
March 9 Signed engagement with sell-side client.
March 13 United States declares national emergency.
March – June Lockdowns, grounded flights, and beginning of due diligence.
July 17 Transaction closed.

While discussing our transaction with folks in the industry, several compelled us to share the story. The M&A sector has had difficulties since the onset of the pandemic and a lot of it stems from the notion that deal-making is necessarily a contact sport. While many in the industry have adapted to virtual meetings, the speed and efficacy of deals seems to be slower – there is an overall feel that fewer deals are actually getting done.

We identified a few factors that led to our successful transaction in a very short time. They include having a single point of contact for each side on virtual calls, using M&A platforms and technology effectively, and the overall reinvestment of saved time from travel into getting additional work done.

Virtual meetings do not replace the hunt, nor do they replace the grind. In fact, the amount of hours that our firm’s partners are clocking are actually significantly higher despite less commuting to the office and less travel for meetings.

Establish a Single Point of Contact on Virtual Calls

While many businesses have migrated fairly easily over to virtual work, everyone has had to deal with the virtual meeting etiquette learning curve in one way or another. In M&A there are at least three sides involved in every communication, making it critical for each party to designate a single point of contact during virtual calls. The POC will do the majority of the talking on behalf of their respective party, while the rest of the team listens in. Think of the POC as the sender of the email and the remaining team members as the CC’s (seller, buyer, advisory firm, accounting firm, etc).

Effective Usage of M&A Platforms

There are several established platforms for deal-making in the middle market. The key with each is to take advantage of their relative strengths for your own particular needs. Dealnexus, Axial, and BankerBay are all well established in the mid-market. 

Technologies and Tools that Work for Contact-less Dealmaking

Video Conferencing tools have become basic necessities like phone and email during the deal process. Zoom and Teams have almost completely replaced pioneers Gotomeeting, Teamviewer, and Joinme. Another major change worth noting is that the sudden shift to work-from-home has forced people to get over their adamant unwillingness to give out their mobile numbers. This has paved the way for more communications occurring through text and apps such as Telegram or Whatsapp, the latter having been used for years to conduct business in other parts of the globe. The increase in usage of these apps has decreased the use of voice calls, but has also increased the use of voicenotes within those apps or through voicenote recording services such as Drotes.   

Zoom Does not Replace the Hunt

Quite the opposite, actually. The hunt for new business is tougher in a lot of ways over zoom. As an advisor, getting a prospective client to entrust the future of their company with you by making eye contact through a screen (or worse, through voice) is much more challenging in comparison to a face to face meeting. The same applies to a seller trusting you to acquire their business. On the upside, the amount of meetings that you can load up into a normal day is much higher over zoom. Ask for 20 minute time slots to make the most of your virtual day.

Zoom Does not Replace the Grind

The amount of work people are clocking these days is significantly higher. Now is the right time to keep your head down and grind on. If we are commuting to the office less, and are travelling to meetings less, then those hours should be reinvested into work. Virtual meetings do not replace the grind, but it does allow you to be in more than two places at one time. Harnessing and adapting the technology and the different work style is both the challenge and the opportunity.

About the Author

Stuart Robles is a Partner at Briggs Capital. He is based in Miami, Florida. Connect with him on LinkedIn here.

About Briggs Capital

Briggs Capital is a Boston-based lower-middle market advisory firm. Partners at Briggs are former business owners that went through their own exits.

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