How Tech Executives Are Managing M&A Inbounds (Part 1 of 2)

Introduction

Peerscale is a leadership organization consisting of technology CEOs, COOs, and other executives operating in the Greater Toronto Area. The member-based community serves as a peer-to-peer network and personal advisory board, with regularly occurring retreats and events.

In early June of 2024, Peerscale held a retreat in Niagara, where we were able to host an M&A inquiries info session and administer a poll to the members. In this two-part blog series, we will discuss the poll results, along with providing some insights and advice into how executives and leadership can most effectively deal with M&A inbounds.

This first entry into the series will break down the four poll questions that were given, and disclose the results, to set the stage for the second part which will be released later this summer, in August.

Question #1: How many inbound M&A / Private Equity inquiries do you get per month?

While the leading response was the lowest amount of inbounds at 1 to 2, the majority (64.3%) of respondents indicated receiving at least three inbounds on a monthly basis. This first question shows that the poll recipients are quite familiar with M&A inbounds and validates their responses as to how they typically handle these inquiries.

Question #2: How are currently managing inbound inquiries?

With a similar theme to the first question, the leading response does not tell the whole story. Despite 11 executives indicating that they ignore all M&A inquiries, 14 (50.0%) are in fact entertaining these inbounds, with half of those being conditional on the inquiry being interesting.

Question #3: What would typically get you on the phone? [can be multi answer]

A total of 66 entries to this question, from 28 poll participants indicate that there are multiple avenues that can lead an inbound into getting on the phone. Additionally, the results indicate that having strategic ties to the business, along with demonstrating explicit knowledge of the industry and the firm are what is valued most by executives.  

Question #4: When you do get on the phone, how much do you typically share?

The fourth and final question had only 24 responses, but was split between providing no information, and providing high-level metrics, with none of the respondents indicating that anything further is disclosed when initially speaking with an inbound connection.  

Key Takeaways

Analyzing the responses from the 4 questions that were administered, there are multiple key takeaways.

The first is that in the rebounding M&A market, tech executives are receiving multiple, if not several M&A inbounds on a monthly basis. Secondly, while a significant portion of these inbounds are being disregarded, there is still a strong chance that someone from the organization will respond to it, especially if the inbound is an interesting one. Next, there are numerous contributing factors that make an inbound interesting or more effective, however demonstrating domain expertise and being well-informed will lead to more success. The final takeaway is that introductory calls will not see significant information disclosed, relaying the fact that M&A discussions are built upon strong relationships and trust between the participating parties.

Conclusion

We’d like to thank all the attendees for participating in our poll and providing these interesting data points. Next month’s blog will provide a comprehensive analysis into how the poll results can be leveraged for becoming more efficient in managing M&A inbounds. Thanks for reading, and if you have any questions regarding M&A or any related topics, do not hesitate to reach out!

To learn more about Peerscale, check out their website: peerscale.com