Fasken Martineau released today the results of a survey of senior M&A executives primarily based in the United States that lead to some compelling observations about the growing use of social media platforms such as LinkedIn and Facebook.
Key Findings
Entrepreneurs looking for an exit should not ignore the quality of their social profiles:
- 36% of respondents used social media platforms to research potential acquisition targets in the last year.
- 48% used social platforms to investigate companies involved in transactions.
LinkedIn and Facebook play different roles among M&A executives using social media:
- 72% said that LinkedIn added the most value to due diligence versus other social platforms, while only 50% said that Facebook added value.
- Of those that used social media to disclose a transaction, 78% used Facebook while 44% used LinkedIn.
Even with guidance from the SEC, social media may remain a minor player in the M&A realm for some time to come:
- Given the unsettled state of regulatory guidance for the use of social media at the time of the survey, the percentage of executives who used social media to communicate a transaction (32%) may be considered high.
- However, a large majority (77%) said that they do not have a social media strategy specifically for M&A, 65% do not anticipate developing such a strategy, and 74% were neutral to negative on the importance of a having a social media strategy specifically to impact M&A transactions, a bias that may be difficult to overcome despite the SEC’s guidance.
