SAN FRANCISCO--(BUSINESS WIRE)--SRS | Shareholder Representative Services, the post-closing expert for private company mergers and acquisitions, today announced that 2011 marked a year of strong growth and operational expansion. Market indicators further suggest that there will be an uptick in acquisitions of privately held companies in the next 12 months, and the need for post-closing services will continue to expand.
“We see the perfect storm forming for M&A in 2012,” said Paul Koenig, Managing Director of SRS. “The combination of corporate buyers with large stockpiles of cash, the fact that it is exceedingly difficult to get any meaningful yield on that cash in the marketplace, and the abundance of attractive and proven acquisition targets should make for a strong deal pipeline. Additionally, there will be increased pressure to exit other companies that have been in investors’ portfolios for longer periods than may have been initially projected.”
Recent data reported by SRS and other market sources supports this projection. According to the SRS 2011 M&A Deal Terms Study, companies that are getting acquired are more mature on average with proven sales track records, and buyers appear to be increasingly interested in consummating acquisitions with cash rather than stock or a combination of the two.
While experts have pointed to the strong balance sheets of corporate buyers for some time, credit market volatility and economic uncertainty may have tempered M&A activity in the preceding months. SRS clients, including many of the most successful venture capital and private equity firms, are more optimistic about the prospects for dealmaking in 2012. The key will be the convergence of attractive targets and buyer confidence. According to Grant Thornton LLP’s 2011 Global PE Report, more than 60% of PE firms surveyed expect that exit activity will increase over the next 12 months.
SRS was engaged on 130 deals in 2011, with an aggregate of $1.6 billion in earnout potential and $2.2 billion held back for potential claims and purchase price adjustments. 40 SRS deals that closed in prior years reached the end of their escrow periods in 2011, with SRS managing final disbursements of account balances to the former shareholders.
Notable M&A deals on which SRS served as the shareholder representative in 2011 included Huffington Post’s acquisition by AOL, Endeca’s acquisition by Oracle, Quidsi’s acquisition by Amazon, and Plexxikon’s acquisition by Daiichi Sankyo. Additional SRS highlights in 2011 included:
- Investigating, negotiating and resolving 200 claims, 60 working capital adjustments, 40 earnouts, and 140 disbursements.
- Establishing a new liquidity alternative through the launch of SRS EscrowExchange with SecondMarket to give selling shareholders the option of potentially converting escrow holdings into cash.
- Hiring operations, technology, legal, accounting, and business development experts, including William Lau as Executive Director and Chief Operating Officer, Donald Morrissey to lead SRS’ life sciences practice, Raymond Cho as a director managing litigation and arbitration, Christopher Han as a director on SRS’ pre-closing team, and Amanda Jackson to head business development in the Northeast.
- Expanding to Boston, Mass., Austin, Texas and Tel Aviv, Israel.
- Releasing the 2011 SRS M&A Deal Terms Study and the 2011 SRS M&A Post-Closing Claims Study, which provide the most comprehensive analysis of M&A deal terms, trends, and post-closing claims in venture-backed exits.
- Launching the SRS Achieving the Exit Executive Q&A Series, which is distributed monthly and highlights how entrepreneurs have successfully led companies through acquisition.
- Implementation of the latest version of SRS ComPort™, the most sophisticated tool ever used by a shareholder representative in managing M&A transactions after closing. SRS ComPort includes version 3 of the SRS client portal, which is the most advanced communications tool available to former shareholders, providing online access to their account information and customer support.
“In order to meet industry demand for experienced post-closing management, we built a broad team of experts who specialize in issues that come up after the deal closes, and we have invested significantly in technology,” said Mark Vogel, Managing Director of SRS. “No one else has a team with comparable depth in accounting, tax and dispute management expertise and the systems and processes for the highest standards of client service.”
SRS | Shareholder Representative Services is the global expert in professionally managing the post-closing process to safeguard the selling shareholders' interests in private company M&A transactions. As the shareholder representative, SRS manages all post-closing matters, including working capital and other purchase price adjustments, tax reviews, earnouts, the handling of claims, disputes and litigation, communications with acquirers and selling shareholders, and management and distribution of escrow and expense funds.
SRS has a senior-level team of more than 30 attorneys, financial professionals, and operations and systems experts and the most sophisticated operational, tracking and reporting systems ever used by a shareholder representative. On deals valued in aggregate in excess of $25 billion, SRS has represented more than 400 venture capital and private equity firms and over 30,000 shareholders in 44 countries. No one has as much knowledge and experience in serving as a shareholder representative and navigating the issues that arise post-closing than SRS. For more information visit www.shareholderrep.com.