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Published March 18th 2014

Using Social Media to Inform Mergers & Acquisitions

When Facebook announced it was buying Whatsapp for a cool nineteen billion dollars, a ripple of excitement and energy shot through the social landscape (and Jan Koum’s wallet).

But behind these get-rich quick dreams and deals, the reality is a lot of hard work, time-consuming analysis and weeks, if not months, of networking and negotiating.


Because failure to effectively assess the seller’s business and operations could potentially lead to lower valuations, erroneous assumptions, risk and increased financial exposure, to name a few.

Every so often sellers intend for tight control of information to remain in place through the actual closing, whereas you will need to complete a due diligence review and thoroughly investigate the company’s health and reputation, its products, its customers, the market and even competitors.

What if you can jump over the preliminary stage and go straight to the negotiating part?

Nothing’s impossible.

With any enterprise social media analytics tool – we’re not pointing to any in particular – you can collect substantial and readily available data in minutes to seconds, much of which is not commonly found or accessible via other avenues.

We see companies using social media analytics throughout the M&A lifecycle, ranging from the preliminary stage of identifying target companies to the final stage of post-closing integration.

Screen Shot 2014-03-13 at 22.48.09That being said, let’s take a look at how social data can be used to safely undertake due diligence:

1. The Customer Voice


Initially, social media research will help you to establish how a M&A target is perceived by its current and potential customers. Who’s whispering about the company and what are the particular facets of the business’s perception?

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2. Social Media Presence


Start by doing an audit of all your candidate’s owned social profiles, perhaps by using a channels feature.

Poor implementation of a solid social media strategy can often have direct repercussions for any company’s ability to market, sell and extend its brand reach anywhere in the world.


3. Competitive Landscape


Equally important, you will want to know how the company stacks up against its competitors.

To understand the reasons behind your target’s share of voice and position in the marketplace, a simple Google search won’t cut it.

Google might give you the most popular results instantly, but if you want to know the perception and visibility of all market players, who’s to say which mention is more relevant than the others?

That’s where data analytics come in handy, taking into account a mixture of the credibility, reach, impact and other popularity metrics.

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4. Fact-checking


Investigating social data can also help you assess the accuracy and completeness of the due diligence material the candidate has supplied.

Other than people deleting their own comments, no one can edit social data.

This spontaneous environment compels companies, and the people within, to reveal their true personalities.

5. Lessons from Historical Data, Visualised


Conceptualizing and putting together a M&A deal requires an understanding of historical patterns and the ability to predict potential risks and opportunities in the market.

While spreadsheets or a simple SWOT analysis can help you collect data, they are usually less helpful in revealing patterns.

Being able to visualize data is paramount to provide richer insights into industry trends.

Screen.Shot.2014.03.17.at.10.08.16.AM (1)

6. Future Planning & Strategic Insights


Turning to social media analytics allows you to scrutinize and categorize critical data from different business units, product lines or any other categories.

Which units have the most potential to grow or to fail? And how exactly are you going to integrate the new purchase into their existing operations?
Planning (1)

7. Company Culture & Staff Viewpoints


Ultimately, insights gleaned from social media content and how employees interacts with the brand will also give you a flavor of what the company’s culture is like and if the seller will be able to attract new talent once the acquisition is complete.

Advanced social media analytics is just one of many cutting-edge tools that can help optimise the M&A process.

However, many businesses are still struggling to use it to make better-informed M&A decisions.

Last year, only 36% of senior M&A executives used social media platforms to research potential acquisition targets.

Perhaps they think of social media as being different, but we see it as genuine, unedited, real-time surveying. As Robert Brown, the co-president of Lincoln once said:

“Instead of waiting for market studies, buyers can get instantaneous feedback through the digital community”

We agree and we can help.

Find out how Brandwatch can help


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