Method of identifying potential targets for a capital transaction

• US 8,355,968 B2
• Filed: 10/16/2001
• Issued: 01/15/2013
• Est. Priority Date: 09/01/1999
• Status: Active Grant

• Current Assignee: S&P Global Market Intelligence, Inc. (S&P Global Inc.)
• Original Assignee: Capital IQ (Standard & Poor's Investment Advisory Services LLC)
• Inventors: Goldman, Neal D.
• Primary Examiner(s): Nguyen, Nga B.
• Application Number:
  US09/978,959
• Publication Number:
  US 20020073006A1
• Time in Patent Office: 4,109 Days
• Field of Search: 705/35, 705/36, 705/37, 705/38, 705/39, 705/80
• US Class Current: 705/35
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03

Abstract

A method of identifying potential targets (i.e., buyers, investors, sellers, or acquisition targets) for a financial transaction. The method enables a user to specify at least one investment criteria based on which to run a search to identify the prospective targets, and to select a universe within which to search for the prospective targets. The method also enables the user to specify a type of financial transaction. A scoring algorithm that is used to score the results of the search is selected based on the user'"'"'s specification of the type of financial transaction.

Claims

1. A method of identifying potential targets for a capital transaction, said method comprising the steps of:

enabling a user to specify at least one investment criterion;

enabling said user to specify a type of said capital transaction, wherein the type of capital transaction is a (1) merger and acquisition, (2) venture capital growth, (3) private equity growth, or (4) turnaround;

selecting, using a computer, a scoring algorithm based on said user'"'"'s selection of said type of capital transaction for assigning scores for said potential targets;

organizing, using said computer, at least one of said investment criteria in a hierarchical structure wherein said organizing step comprises the step of arranging said hierarchical structure such that increasing depth of said hierarchical structure corresponds to increased specificity of said investment criteria;

selecting, using said computer, said investment criteria from the group consisting of industry classification, firm characteristics, and geographies; and

normalizing, by said computer, maximum scores of said investment criteria to a score for said industry classification criterion.

2. The method of claim 1, wherein assigning scores comprises the step of setting a base score for each of said investment criteria based on said type of capital transaction.

3. The method of claim 1, further comprising the step of generating a base score for said hierarchical structure.

4. The method of claim 3, further comprising the step of raising said base score of said hierarchical structure to a power that is representative of said depth of said hierarchical structure.

5. The method of claim 1, wherein said normalizing step comprises multiplying said score for said industry classification by a ratio that corresponds to said type of capital transaction.

6. The method of claim 5, further comprising the steps of:

assigning a score to said potential target for each match between said potential target and one of said investment criteria specified by said user; and

aggregating said scores for each potential target to provide a standalone score for each potential target.

7. The method of claim 6, further comprising the steps of:

calculating a portfolio score for each potential target; and

summing said standalone score and said portfolio score for each potential target to provide an overall score for each potential target.

8. The method of claim 7, further comprising the step of ranking said potential targets on the basis of said overall score.

9. The method of claim 8, wherein said potential targets are potential buyers of a company.

10. The method of claim 8, wherein said potential targets are potential investors in a company.

11. The method of claim 8, wherein said potential targets are potential sellers of a company.

12. The method of claim 8, further comprising the step of inferring additional investment criteria based on said at least one investment criteria specified by said user.

13. The method of claim 1, further comprising automatically contacting potential investors with an offer of a capital transaction and tracking the progress of the offer until the offer is accepted or declined.

14. The method of claim 13, wherein tracking comprises establishing one or more report which details the initial contact with the potential investors, the response of the potential investors, and the correspondence with the potential investor until the offer is closed or rejected.

15. The method of claim 13, wherein tracking comprises:

generating a follow-up letter customized to each potential investor contacted with the offer; and

entering the follow-up letter into a log to track the progress of the deal with the potential investor.

16. The method of claim 1, further comprising gathering and storing information with respect to possible targets, said information comprising data selected from the group consisting of preferred equity investment size, target company sales range, target company operating income, target company enterprise value, preferred security type, preferred stage of development, geographic preference, preferred ownership position, industries targeted for investment, current investment, and past investment.