By Rupert Cocke
Datasite, a Minneapolis-based SaaS technology provider for mergers and acquisitions (M&A) professionals, plans to accelerate its growth through acquisitions backed by its new sponsor, CapVest, said CEO Rusty Wiley.
The takeover of the company by the private equity (PE) fund closed in mid-December. CapVest brings an inorganic mentality to its portfolio companies, Wiley said.
CapVest is very supportive of continuing the organic product investments at Datasite and pursuing transformational acquisitions, a spokesperson for the PE said.
Datasite, which provides virtual data rooms (VDRs), hired an external tier-one consultant to get a sense of the M&A opportunity, Wiley said. The consultant estimated its potential market as being around USD 11bn, he said, adding that the company has a surfeit of potential targets.
The company, which was formerly known as Merrill Corp, already has a relationship with a number of advisors, who provide leads, Wiley said. It would be prepared to give mandates, particularly on more complex deals, he added.
Goldman Sachs worked as Datasite’s exclusive financial advisor on the CapVest buyout, while Akin Gump Strauss Hauer Feld was its legal advisor.
Datasite will continue to develop new products and services organically, particularly those related to or adjacent to due diligence, the CEO said. These include areas such as analysing buyer behaviour and an artificial intelligence (AI)-based categorization tool, he said.
Inorganic opportunities make sense as the company moves further away from due diligence, Wiley said. “We look at everything that touches the life cycle of an M&A deal,” he said, adding that it could also look to roll up smaller VDR players.
Potential areas for deals include post-deal integration, ideation (or origination), customer relationship management (CRM) tools, pipeline management, new AI tech and analytics, Wiley said. The underlying idea is to add functionality to the platform or to automate parts of a deal, such as non-disclosure agreements (NDAs), he said.
Deals would be likely to range in size from less than USD 10m to more than USD 100m, Wiley said. Key criteria would include technology, culture and fit, he said, adding that the company values speed and agility.
Ideally, technology targets would have a small number of active paying users, who the company could interview in due diligence, Wiley said. Datasite would help the target scale, he said, adding that its go-to-market capabilities are based on its client base, who have already approved it to store confidential information.
Datasite has facilitated close to 10,000 deals on its platform. It has a growing customer base in more than 180 countries and currently has more than 750 employees in 25 locations across 13 countries.