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Merrill DataSite Survey Indicates High Expectations for Private Equity Transactions in Q4 2010

Pattinson Hoover
 


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NEW YORK, NY, OCTOBER 27, 2010 — Executives are increasingly more optimistic about deal flow in Q4 2010, according to polling data released today by Merrill DataSite, the leading provider of virtual data room (VDR) solutions for business communication and information management, in conjunction with Thomson Reuters.

Almost half (48 percent) of those polled believe, as it relates to private equity transactions, that there will be an uptick of 10 percent - 50 percent in deal flow compared to Q4 2009. Moreover, 21 percent of those polled think that deal flow will increase up to 10 percent in Q4 2010 vs. Q4 2009.

In addition, respondents are cautiously optimistic about the number of deals that will be completed before the end of the year, with almost a third (28 percent) of those polled expecting 25 percent - 50 percent of deals in the pipeline to be completed before the start of 2011. Conversely, 44 percent expect anywhere from 0 percent - 25 percent of their clients’ deals to be completed in the same time period.

“The results of our recent webinar bolster what Merrill DataSite has experienced first hand in its VDR business throughout 2010; an increasing level deal flow activity coming out of the private equity shops. There appears be a real sense of urgency to empty the deal pipeline by the end of the year; more so than we’ve seen in recent history, ” said Richard A. Martin Jr, Senior Director of Merrill DataSite.

Respondents cited a variety of factors as the main drivers behind deal flow in Q4 2010. The majority of those polled (40 percent) believe that year end tax changes will be one of the biggest factors driving deal consummation in the end of 2010. Slightly more than one quarter (26 percent) cited private equity overhang, or the need to put funds to work, as a main driver of deal flow in the final quarter of 2010 as well.

Mr. Martin added, “It is well documented that the dearth in deal activity during the past few years has put a lot of private equity firms at risk of having to return capital to investors, not something their used to doing and certainly not motivated to do. We also believe that tax changes related to carried interest has caused firms to be much hungrier for rapid conclusions to transactions than in recent memory. ”

Additional data points revealed that 30 percent of those polled think the main reason companies will not do deals in Q4 is due to a deal being overpriced because of equity overhang or too much competition. Moreover, 49 percent of respondents, and/or their clients, will not be doing deals because company earnings are unsustainable.

Responses were drawn from survey questions posed during a webinar called, “The 2010 Year End Deal Crush: Inking Deals As The Market Heats Up. ” An average of 67 people responded to each of the four polling questions asked during this webinar.

About Merrill DataSite

Merrill DataSite® is a secure virtual data room solution that optimizes the due diligence process by providing a highly efficient and secure method for sharing key business information between multiple parties. Merrill DataSite provides unlimited access for users worldwide, as well as real-time activity reports, site-wide search at the document level, enhanced communications through the Q&A feature and superior project management service - all of which help reduce transaction time and expense. Merrill DataSite's multilingual support staff is available from anywhere in the world, 24/7, and can have your VDR up and running with thousands of pages loaded within 24 hours or less.

With its deep roots in transaction and compliance services, Merrill Corporation (www.merrillcorp.com) has a cultural, organization-wide discipline in the management and processing of confidential content. Merrill DataSite is the first VDR provider to understand customer and industry needs by earning an ISO/IEC 27001:2005 certificate of registration – the highest standard for information security – and is currently the world's only VDR certified for operations in the United States, Europe and Asia. Merrill DataSite's ISO certification is available for review at: www.datasite.com/security.htm.

As the leading provider of VDR solutions , Merrill DataSite has empowered nearly 2 million unique visitors to perform electronic due diligence on thousands of transaction totaling trillions of dollars in asset value. Merrill DataSite VDR solution has become an essential tool in an efficient and legally defensible process for completing multiple types of financial transactions .

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