Party For a few days last month, I was transported back to the go-go M&A days of 2006. 

An analyst from a boutique consulting firm called the office and needed help with a large, time-sensitive research project.  She didn’t tell us outright but it seemed that her firm was engaged to quickly conduct due diligence on a prospective private equity deal. 

The research process went from macro to micro.  The deal Cross-border_03apparently had a cross-border component, so country-specific research was required from the Economist Intelligence Unit. This included information on GDP growth rates, demographics and political stability. 

Magnifying-graph Next was some broad-based market research from publishers such as Datamonitor, IBIS World and Mintel, each of which covers a wide range of industries by geography.  The sector-specific part of the assignment was finished by accessing industry reports through the client’s Thomson Financial Investext subscription.

The next phase of the project was gathering company-specific information.   Deal-comps The deal team already had reams of information on the target, but the analyst conducting the due diligence wanted to be sure she had everything the deal team had and was making sure no stone was unturned that might affect the deal.  Reports were gathered from Moody’s, S&P, and Audit Analytics. Financial comps had already been created by the acquirer but Alacra was used to create deal comps using Thomson Financial’s Deals Database (SDC)MSCI Barra’s Beta Book was used to access betas to calculate weighted average costs of capital and a news run was conducted using Dow Jones Factiva.

Helping clients with this type of project was a regular event prior to the financial crisis.  With M&A activity picking up, our expectation is that this type of research project will become more common.  Alacra’s aggregated premium content can help researchers (and bankers) quickly access the information they need to make informed decisions.