How to Accelerate Asset Sales for Mining and Natural Resources Companies
By Paul Hartzell, senior vice president of Merrill DataSite
Think like your customer to close deals faster
One of the first and most important pieces of advice any salesperson gets is to ‘think like your customer’. In the mining and natural resources sector, that shouldn’t be too difficult. Assets such as active wells or rich mineral deposits are traded frequently between competitors within the sector — meaning those organisations selling one day are potentially buying the next.
The result is a common understanding, on all sides, of the kind of information prospective customers need before making a buying decision. The step those selling must take is to make sure their prospective customers are able to easily access information about their asset, so deals can be closed faster.
Understanding the potential
Firstly, customers need to know exactly what potential an asset has. How much of the mineral or raw material is available at the location? And, how easily and cost-effectively it can be accessed.
The way the industry assesses an asset’s potential is through 3-D geological models of the site. This information is essential when valuing the asset before making an offer; as a seller, you know your buyers won’t just take your word for it. You are a rival after all, when it comes to a valuation.
Instead, you need a means of giving your prospective customers access to vital geological information contained in the 3-D models quickly and easily. Without that access, there is no way they can reach a purchase decision.
Providing a level playing field
Many buying decisions are based on comparing a number of assets under consideration. For example, buyers might want to compare well logs from different production sites, or with a log from a well they already operate.
Clearly, this needs to be done on a level playing field and the seller can gain advantage by facilitating these comparisons — making it clear you have nothing to hide.
Demonstrating transparency
When considering an acquisition, prospective buyers are likely to have specific questions that need answering, or particular facts they want to confirm. Any delay in response is of course frustrating, but it can also indicate a lack of transparency on the part of the seller, which you don’t want impeding a deal.
Common sense dictates that sellers should make it easier for buyers to retrieve the information they have previously studied and to find the details and documents they need to make a decision.
The best practice approach
Traditionally, searching for information, conducting comparisons and analysing geological models was something that could only happen in physical data rooms, which is a slow and unwieldy approach to asset transactions.
In recent years however, industry best practice has evolved and increasingly major players in the mining and natural resources sector use a Merrill DataSite virtual data room (VDR) to ensure their potential buyers can get the information they need, when they need it.
The reasons some of the world’s largest multi-national organisations rely on Merrill DataSite, rather than any other VDR, can be traced to our strong heritage in the industry. Having worked with mining and natural resources companies for years, the Merrill DataSite solution is optimised to respond to the customer demands outlined above.
Meeting your customers’ information requirements
Merrill DataSite’s indexing system is widely used and trusted throughout the mining and natural resources sector. So, when customers start to search for information in a Merrill DataSite VDR, it’s always quick and simple.
Secondly, Merrill DataSite has been designed to make it easy for authorised users to compare two or more assets. It literally allows customers to see well logs, for example, on screen alongside each other, rather than in hard copy.
Thirdly, and most importantly, Merrill DataSite is uniquely able to handle the 3-D geological models — which are massive files — in their original format. Potential buyers can then see the information they need online: there’s no need to install dedicated software or block their network by downloading 50gb files, or even to travel to a location to access the files.
The combined result is a solution that makes it easy for any potential buyer to assess the suitability of an asset, check the details and ultimately make a purchase decision more quickly— exactly what buyers and sellers both want.
Think like your customers
So, the next time you’re looking to sell an asset, it makes business sense to follow the example of industry leaders and use a Merrill DataSite VDR solution to enable potential buyers to reach a decision faster.
Need further impetus? Talk to colleagues in the M&A team: chances are they know the value of Merrill DataSite for making smarter, faster buying decisions.
To find out more, download our new paper Accelerating Acquisition: How Merrill DataSite Can Help Companies Conduct Mining and Natural Resources Acquisitions More Quickly.
