Which competitors end up buying the companies you liked?
Are your peers outbidding you for the most quality, new deals within your investment criteria?
In this complex and fast-moving environment, it’s vital to any sourcing strategy to know the competition’s next move. Developing a competitor index to follow the deal activity of other sponsors in your market is valuable to understand your peer group’s strategy. Are there signs that firms are moving to unchartered sectors, sourcing deals in different regions or size ranges, or simply upping the activity in the most recent quarter? Creating this customized dataset can highlight where a competitor’s deal flow is coming from, compare a firm’s market coverage with the competition, and detail who the most active relevant intermediaries are in your market.
Who are the deal sources?
First, by building these alerts and datasets within the SPS Portal, users can see where a competitor’s deal flow is coming from. This may reveal that a certain peer is consistently working with and/or sourcing deals from one or two active intermediaries in your similar market. If you do not have a current relationship with these advisors, this is an opportunity to reach out and introduce your fund and strategy to this firm. Moreover, dig deeper into the SPS market data to see what other sponsors have worked with this intermediary. Is it another competitor that could be outbidding you on transactions?
Where does your market coverage stand against peers?
Analyzing coverage statistics for this subset of deals will indicate where a firm stands in the market. Perhaps, it’s good news and your fund is appropriately covering the market and has a high percentage seen for this dataset. Or, perhaps it will highlight areas for improvement or indicate any weakness to the current strategy, for example, not building relationships with new entrants to the market, or having too narrow of a regional strategy. Whatever the case, aligning your metrics with that of the overall market will give a broader picture of the ecosystem and where the strategy stands.
Who are the most active intermediaries?
Finally, to future-proof a firm, the most important details revealed from the competitor index are the top intermediaries active within this dataset. If there are four or five prolific investment banks working with your peers and you don’t have a relationship with these firms, reach out to them. Given the complexity of the M&A market, the most active intermediaries in any given region, sector, or size range, may not be comprised of the most active intermediaries in your specific ecosystem.
Incorporating a competitive index is an effective means to stay abreast of your unique market segment. It’s vital to any business development strategy to know who the most active market participants are, as well as identifying who the real competitors are to your strategy. How often are these competitors winning deals that you’ve seen? Moreover, is this a true competitor to your strategy?
To learn more about the SPS Portal, or to create your customized “competitor index” dataset today, contact us.
Last week’s deals today
April 1 – April 5
~180 deals traded
Deal of the week
ARRIS Group, a Georgia based provider of entertainment, communications, and networking technology and solutions worldwide, including cable modems, broadband gateways, set-top boxes, and video gateways, was acquired by CommScope. Evercore Partners acted as the sell-side financial advisor and Herbert Smith Freehills, Hogan Lovells, and Troutman Sanders provided sell-side legal advice for this transaction. The transaction was valued at $7.4 billion.
Most active subsectors
- IT: Software & services
- IT: Services
- Services: Misc., asset light
- Financial: Insurance
- Financial: Personal & commercial banking
Most active cities
- New York
- San Antonio