Buyer's Guide

Last updated: Feature

New products and services aim to streamline the M&A process

The mergers and acquisitions business can be very complicated, and dealmakers are constantly looking for ways to be efficient while maximizing returns. Products and services that make it easier to bring deals to completion will go a long way. However, in today's fast-moving market it's hard for dealmakers to quickly pinpoint the products that could be most helpful.

M&A decided to take this opportunity to learn about some of the best new products and services. Not all of the vendors we talked to are new to the marketplace, but they are all offering new products and services or have changed their strategy recently.

Automatic Data Processing Inc.

Everyone in business has heard of the payroll service company ADP (Nasdaq: ADP). Ironically, while providing payroll services is what the Roseland, N.J.-based company has become known for, it's really only one part of its business model. ADP often analyzes labor costs and operational expenses, as well as showing companies meaningful ways to directly affect the profit and loss of a portfolio through both earnings before interest, taxes, depreciation and amortization (Ebitda) and operational effectiveness.

"We can find ways to save companies 3 percent when they streamline human capital or find companies ways to differentiate themselves in the marketplace," says Chris Capko, senior director of strategy-private equity. "We have 97 services outside of payroll, from human resource help to 401k administration."

The company has revamped its offering and is now focused on middle-market dealmakers. Typically, ADP's services were bought at the portfolio level by companies, but now the firm is looking to penetrate companies at the private equity level. "We are making the change because we found that decisions are made at the PE level," says Capko. "It makes sense to talk with the PE people that own the company to align the strategy."

"There is a lot of buying and holding, and PE firms want to increase their effectiveness. That's what prompted them to consolidate their buying processes. They want standardization across the portfolio and we can offer that with this new strategy," he says.

Additionally, today ADP often performs diagnostics on a company before it is sold by a larger company, and it will make recommendations on what type of infrastructure the company should have going forward.

"In the last year we have focused our energy on the middle market. We honed our strategy with the larger market and are now focused on the middle market. We designed the strategy by talking to private equity firms and realized we can really impact the spend for middle-market private equity firms. That's why this new strategy was born," says Capko.

Dealdrive Inc.

New York-based Dealdrive Inc. is a business intelligence platform that helps investment executives organize and manage their firms more efficiently. The company was founded in August 2012 and launched its platform during the second half of 2013. The cloud-based product can be used on any computer, tablet or mobile device, and it is typically used by private equity professionals, lenders and corporate development executives. Dealdrive uses a software as a service (SaaS) model with a monthly user fee.

"A big problem for people is data overload. Dealdrive compiles everything in one centralized place that's easy to access," says Daniel Nenadovic, co-founder of Dealdrive Inc. "Users can see everything from how individual portfolio companies are performing to what's in their deal pipeline. Everything is centralized, and data is tracked in real time."

The application gives users access to their entire deal pipeline, all of their due diligence materials, all portfolio company key performance indicator (KPI) reports and board meeting materials, and all of the related information, including notes, to-do lists, documents, calendars and contacts.

"It saves time because there's no looking for different files or going into different systems. Everything is right there," says Nenadovic. "It's very efficient."

Dealdrive Inc. has 12 employees and is "growing like a weed," with backlogged customer requests, says Nenadovic, adding that Dealdrive's current clients have more than $20 billion in capital.

"The nice thing is that we can be effective for five-person shops with one portfolio company or 500-person shops with 100 portfolio companies," says Nenadovic. "Our solution can work for many different situations."

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