It’s Tinder for mergers and acquisitions: swipe right if you want to buy this company
A number of firms have crowded into the computerised M&A matchmaking service in recent years
If you’re in to hooking up, you’ve probably tried Tinder. If you’re a small company, and you want to hook up with another company, Axial Networks can be your go-between.
The closely held software maker has created what’s essentially a matchmaking application for management, bankers and private-equity firms looking to buy or sell companies. Executives plug in their company’s financials and related essential information that only Axial sees. Then the firm uses an algorithm to match the company with prospective buyers. Like Tinder, users swipe right on their mobile phones, or click on a desktop, to “like” a company, allowing them to send a message to a company’s broker or executive directly.
Peter Lehrman, Axial’s founder and chief executive, is unapologetic about his firm’s role model. “It’s Tinder,” he said. “It’s swipe right.”
A number of firms have crowded into the computerised matchmaking service in recent years looking to bring more efficiency to a fragmented mergers and acquisitions market. Axial’s competitors include Intralinks’ DealNexus and MergersClub. They’re not a threat to the big Wall Street firms. Almost all the 500 deals arranged through Axial’s platform this year were between US$5 million and US$100 million, a fraction of the average US$5.3 billion transaction Goldman Sachs advises on, for instance.
As a private equity firm, we like it and we don’t like it, because it makes the auction process a little more robust
With Axial, the plush offices and US$1,000 dinners that are so typical of Wall Street deal-making aren’t required to pull off an acquisition. “I just spoke with a guy who told me, ‘I was sourcing deals from my boxers this morning’,” Lehrman said.