Fasken Martineau 2013 Social Media M&A Survey

Transcription

1 May 29, 2013 Fasken Martineau 2013 Scial Media M&A Survey On July 3, 2012 Netflix CEO Reed Hastings psted this 44-wrd status update t his Facebk page, which has rughly 260,000 fllwers a readership similar in size t that f a mid-market newspaper r mderately trafficked business news web site: The Securities and Exchange Cmmissin investigated whether the pst vilated Regulatin FD, which prhibits public cmpanies frm disclsing material, nnpublic infrmatin t certain individuals wh might reasnably be expected t trade n the material, befre it is made available t the general public. The Cmmissin decided nt t pursue an enfrcement actin in this matter, and its subsequent reprt, issued n April 2, 2013, prvided cmpanies with psitive guidance fr the use f scial platfrms fr cmmunicating material, nn-public infrmatin. While the SEC was cmpiling its reprt, Fasken Martineau was cnducting its first Scial Media M&A Survey, querying senir managers n their use f scial media fr disclsing transactins and gathering infrmatin n acquisitin targets. The results f Fasken Martineau s survey prvide cmpelling insight int crprate scial media behavir in an undefined regulatry envirnment. With the SEC s guidance nw in the public dmain, the survey als prvides a baseline fr future surveys that seek t measure the impact f the SEC s guidance n M&A cmmunicatin, in particular. The authrs are keen t nte that the vast majrity f respnses t the survey came frm senir managers at United States-based cmpanies, bth public and private. In Canada, where Fasken Martineau des business, the Ontari Securities Cmmissin reacted within days f the SEC s reprt, saying that it has n plans t revise its current rules that gvern scial media and suggesting that the best methd fr disclsing material, nn-public infrmatin in Canada remains the press release and regulatry filing. Fasken Martineau retains an acute interest in the subject, hwever, as it has extensive experience with crss-brder transactins. 1

2 Key Findings and Observatins Entrepreneurs lking fr an exit, be warned: ignre the quality f yur scial prfile at yur peril: 36 percent f respndents used scial media platfrms t research ptential acquisitin targets in the last year and 48 percent used scial platfrms t investigate cmpanies invlved in transactins. Hwever, mre respndents than nt view the quality f the infrmatin fund n scial platfrms t be neutral t pr, and scial media was seen as the least reliable f six alternative surces f infrmatin fr framing M&A strategy. Cmmunicatin strategists, take nte: while LinkedIn is a valued surce f infrmatin abut peple, Facebk may be viewed as the mre reliable surce fr infrmatin frm peple: Respndents lve LinkedIn fr research: 72 percent f thse wh use scial channels t cnduct due diligence said that LinkedIn added the greatest value versus ther scial platfrms, while nly 50 percent said Facebk added value. 39 percent reprted using LinkedIn Grups t identify grwth pprtunities. When it came time t cmmunicate a deal, hwever, the LinkedIn v. Facebk prprtins reversed: f thse that used scial media t disclse infrmatin abut a transactin, 78 percent used Facebk while 44 percent used LinkedIn. Even with guidance frm the SEC, scial media may remain a minr player in the M&A realm fr sme time t cme: Given the unsettled state f regulatry guidance fr the use f scial media at the time f the survey, the percentage f executives wh used scial media t cmmunicate a transactin (32 percent) may be cnsidered high. This shuld be watched t test whether the recent guidance embldens thers t jin these pineers. Hwever, a large majrity (77 percent) said that they d nt have a scial media strategy specifically fr M&A, 65 percent d nt anticipate develping such a strategy, and 74 percent were neutral t negative n the imprtance f having a scial media strategy specifically t impact M&A transactins, a bias that may be difficult t vercme despite the SEC s guidance. Survey Results The Fasken Martineau Scial Media M&A Survey queried senir managers n the subject f scial media mainly in tw realms f M&A: cmmunicatin, and strategy and due diligence. Results Pertaining t Cmmunicatin 46 percent f respndents have been invlved in transactins that were publicized. 2

3 An verwhelming majrity (86 percent) f this publicity invlved press releases; 32 percent als used scial media t publicize a transactin. Of the 32 percent that used scial media t disclse their transactins: 78 percent used Facebk 67 percent Twitter 44 percent used LinkedIn 44 percent used a crprate blg 11 percent used StckTwits Scial Media Platfrms Used t Disclse Transactins The same percentage as did nt use scial media t cmmunicate (67 percent) said that ther emplyees did nt independently cmment n the transactin in scial media platfrms. 67 percent said that their cmpanies d nt cmmunicate with stakehlders via scial media at all. A clse prprtin (65 percent) reprt having a scial media plicy in place. (This is interesting: are scial media plicies really that effective? And t what degree are they prhibiting scial media behavir versus guiding scial media behavir?) 67 percent have seen n attempts t use scial media as a tl t educate r infrm investrs f the merits f a transactin befre a sharehlder vte. 19 percent have seen LinkedIn used in such a way, 15 percent Facebk, and 11 percent Twitter. A large majrity (77 percent) said that they d nt have a scial media strategy specifically fr M&A, and 65 percent d nt anticipate develping such a strategy. 3

4 74 percent were neutral t negative n the imprtance f a having a scial media strategy specifically t impact M&A transactins. 92 percent said that scial media traffic and chatter related t their transactin had neutral t n impact n the transactin s utcme. Prxy issues were nted as mst cmmnly seen in scial media discussins, fllwed by quarterly results, M&A transactins, restructurings and recaps. A large majrity (78 percent) see a rle fr scial media in helping cmpanies achieve integratin gals. Results Pertaining t Strategy and Due Diligence 36 percent f respndents used scial media platfrms t research ptential acquisitin targets in the last year and 48 percent used scial media platfrms t investigate cmpanies invlved in transactins. Amng the respndents that used scial media fr research, 72 percent said that LinkedIn added the mst value. 50 percent said Facebk added value 41 percent said crprate blgs 31 percent Twitter 23 percent YuTube Scial Media Platfrms That Added Value t Respndents Research 4

5 Mre respndents fund the quality f the infrmatin fund n scial media t be neutral t pr. The mst ppular surce f infrmatin n grwth pprtunities is industry analyst reprts, which 70 percent reprted using, fllwed by Ggle Search, used by 58 percent. Of the majr scial platfrms nly LinkedIn Grups were used fr this purpse by any significant prprtin (39 percent) f the respndents. Scial media was seen as the least preferred f six infrmatin surces fr framing M&A strategy, behind financial analysts (the mst preferred), peers, industry analysts, and annual reprts. Areas fr Further Investigatin We invite blggers, jurnalists, analysts, and ther industry bservers t apply their cllective wisdm and expertise t these questins, and we wuld be happy t cllabrate. Please direct inquiries t the cntacts listed at the end f the reprt. As Fasken Martineau cnducted the survey befre the SEC s April 2, 2013 guidance n scial media as a channel fr material disclsures, the results may be viewed as a cmpelling baseline fr future surveys that seek t measure the impact f the SEC s guidance n M&A cmmunicatin, in particular. A large majrity (78 percent) see a rle fr scial media in helping cmpanies achieve integratin gals. Des this suggest that respndents see scial media as having mre value as an emplyee cmmunicatin tl than as a tl fr cmmunicating with external stakehlders? Or des it suggest that executives are cmfrtable with scial media nly after the deal is dne. There may be many interpretatins f this result that lead t cmpelling lines f inquiry. Lastly, what abut YuTube? Fr all f the attentin given t the explsive grwth f nline vide, nt a single respndent reprted using YuTube t cmmunicate a transactin, and less than ne in fur saw any value in it as a research tl. Des this suggest that in the M&A realm, vide is a big pprtunity t pursue, r a clssal waste f time? Methdlgy The Fasken Martineau Scial Media M&A Survey was cnducted in December f It received 93 respnses, the vast majrity (98 percent) f which were executives (CFOs cmprised 53 percent f ttal respndents, which als included CEOs, business develpment executives, general cunsel, and investr relatins/crprate cmmunicatins leaders) frm public and private cmpanies lcated in the United States, 44 percent f which acquired a cmpany in the past year. 90 percent f thse acquisitins cst less than $250 millin. Twenty-ne different industries were represented. 5

6 Abut Fasken Martineau Fasken Martineau is a leading internatinal business law and litigatin firm. With mre than 770 lawyers, the firm has ffices in Vancuver, Calgary, Trnt, Ottawa, Mntréal, Québec City, Lndn, Paris and Jhannesburg. Fasken Martineau s M&A grup prvides strategic cunsel in all aspects f dmestic and crss-brder M&A, including negtiated acquisitins and divestitures, jint ventures, strategic alliances and cntested crprate transactins such as prxy battles and hstile take-vers. Our clients range frm start-up enterprises t sme f the wrld s leading public cmpanies, financial institutins, private equity firms and cncerned sharehlder grups, all f whm rely n us t prvide fcussed, strategic advice specifically tailred t meet their business bjectives. With ffices acrss Canada and in Lndn, Paris and Jhannesburg, we cmbine internatinal reach with expertise in lcal laws and business practices t prvide value-added service n cmplex, multi-jurisdictinal M&A engagements. As a result, we are frequently engaged n M&A mandates by clients cnducting business internatinally and act as lead cunsel n transactins invlving public cmpanies listed n stck exchanges thrughut the wrld. Fr additinal infrmatin, please visit the firm's website at 6