M&A Web Sites Facilitate Smaller Deals

Two new web sites are bringing dealmakers together online in an attempt to smooth rough spots in transactions for the smaller players in the m&a world. Emerge.com was launched in September by Emerge Corp., a privately held company that began as a traditional, off-line m&a advisory service. A second newcomer to the online m&a space is U.S. Business Exchange (USBX), which launched its site in October. Both sites seek to capitalize on the speed and anonymity provided by the web to make smaller deals easier to complete. “We want to use the Internet to empower more small businesses buyers and sellers. Our goal is to bring investment bank-quality service to Main Street,” says Ron Speyer, Emerge’s co-founder and CEO. Speyer says that there is enormous m&a activity among companies with valuations from $1 million to $100 million. He emphasizes that while some m&a web sites are merely classified advertisements and offer limited financial information about the companies for sale, Emerge offers a variety of services to its users. The goals of the site are to create an m&a marketplace that quickly and effectively connects buyers and sellers; to educate buyers, sellers, and intermediaries; and to create a central resource for all players on the m&a horizon. Speyer also notes that Emerge.com is the only m&a site that gets paid solely on the basis of completed transactions. For his part, USBX CEO John E. Mack III, says that the need for Web-based deal support is clear. “According to a recent survey conducted by DAK Group/Rutgers University School of Business, more than 40% of small business owners expect their businesses to be sold or acquired within the next three years. Yet, only 20% of the small businesses listed for sale in the U.S. are actually sold.” To serve this market, USBX (USBX.com) offers three core services: a listing exchange, a resource center, and an advisory service. The listings exchange offers businesses that are for sale, while the resource center provides a set of m&a-related content, tools, and services. One feature of the resource center is a free valuation tool, which enables owners to get an idea of what their business might sell for. The advisory service, still in the planning stages, will offer more hands-on help in shepherding transactions through the deal process. USBX charges a basic listing fee of either $59 or $99 and other charges apply, depending on which other parts of the site’s services are used.