Sweet Caroline, oh oh oh
As New Yorkers and having celebrated our SPS team outing at the Audi Club at Yankee Stadium this year, we hate to say it, but the Red Sox are the World Champions, clutching the title this past Sunday. Over the past few decades, baseball has transformed to a statistician’s game, with the analyzing of everything from the players slugging percentage to on-base performance. In fact, this practice is so ubiquitous, SPS authored a piece on how to “moneyball” deal sourcing in Mergers and Acquisitions magazine in 2017.
Deal sourcing has not been in the data game as long as baseball,yet, as the business development role progresses and takes full advantage of all the intelligence tools available, it’s evolving into more of a numbers game as well. A great pastime for many ball fans involves filling out the scorecard during the game. This engages the spectator in the experience of the game, as well as teaches all the intricate plays and strategies. As a complete novice, I can attest to the great discipline it takes to track every play (believe me, a friend went to grab a beer once and left me with the book – needless to say, I had to buy a round for my poor performance).
The point is, in baseball and in deal sourcing, tracking the all the intricate pieces of data can be a tedious task that involves paying close attention to the game (market), inputting every play (deals), and an ability to analyze the players (deal sources). By employing a tool like the SPS Portal, users can eliminate much of the data-entry drudgery, but retain a clear picture of the whole market and the intermediaries involved. The Portal, tailored to the user’s specific industries and target, provides detailed reports and dashboards that indicate where to focus their deal sourcing efforts.
Revamping the intermediary scorecard
In a 2017 Source post, we created an intermediary scorecard for analyzing advisors. Let’s expand on the concept and update the scorecard for 2018. The following performance metrics should be analyzed for each intermediary’s scorecard:
Previous Intermediary Scorecard:
- Process Index: What type of processes do they typically run?
- Success Rate: Deals brought to market, what % close?
- Relevancy: Closed deals, what % were relevant?
- Market Coverage: Relevant closed deals, what % did your firm see?
New Additions to the Intermediary Scorecard
- Trending Advisors: Has this intermediary completed more relevant deals (based on my target) in the last twelve months, compared with previous LTM periods?
- New Advisors: Is this intermediary new to my target market?
- Low Coverage Advisors: Is this an active Intermediary in my target that I have a low coverage rate?
By adding these new metrics to the scorecard, we can easily gauge the advisors fit as a tier-one deal source. Integrating this practice with your current sourcing strategy will prioritize resources, by ranking the firms based on the level of priority that your deal originators should spend with each advisor. This should not be a difficult task, and it is one SPS can help to develop and fine-tune. This will give you an edge in sourcing the most quality deals by prioritizing relevant relationships, as you compete in this highly active market.
Much to our chagrin, congrats to Boston. No matter, we have already set our eyes on the Marathon this weekend. Remember set your clocks back and do not drive on the east side!
Last week’s deals today
October 22 – 26, 2018
~108 deals traded
Deal of the week
Microsoft Corporation completed its acquisition of the San Francisco based GitHub Inc. last week, for $7.5 B in stock. GitHub is a provider of web-based hosting and open software development services. Per Microsoft’s blog “GitHub will retain its developer-first ethos, operate independently, and remain an open platform.” Morgan Stanley acted as the sell-side financial advisor and Fenwick & West acted as the sell-side legal advisor.
Most active subsectors
- IT: Software & services
- Industrial: Equipment & products
- Healthcare: Specialty clinics & centers
- Services: Marketing & related
Most active cities
- New York
- Los Angeles