Corporate Development, Jeremy, Israel discussed on M&A Science
Their first Prussian many times of of your company is in the negotiation process and so winning every point might make feel good moment of getting a deal done but long-term, it could harm the. Overall business you're trying to cheat, and then finally on the integration side, we borrow from the hippocratic goes here it ends this we did it sap as well, and in that it's do no harm and we are putting together integration plan. I WanNa make sure that we really understand what the acquired company tick, what made them successful and protect that protect your sales pipeline not go in and kind of rebe everything down Jeremy flesh out all of the value and company. Never, quiring. It's great. I loved all that that was awesome roadside commodore like the spirit of Dino harm but I would say never use those terms. Or. Sat out loud. The truth you're going to do some harm, right? You WanNa be very careful why Israel, with of incubating the value of making sure your own unnecessarily destroying it. But certainly being very clear communicating Abalta things are going to change if boss sometimes negotiation, there's sometimes it's it's not an. People over that that change per void there are I think private equity companies that will kind an employee into one of their assets portfolio right. So they're really answering to the private equity people, but were they really than working within the portfolio teen to find acquisition opportunities because that's part of the growth strategy that they're looking to implement how have your experiences been with those kinds of structures have any experiences to speak of and have those workout. Well I've come across some folks on the sell side and they've got a different perspective than let's say a homegrown corporate development leader within a company that campus standalone in the company as person on the other side of the table from someone like that it is helpful to research not imminent company you're looking to acquire, but also private equity firm in their entire portfolio to really understand where the motivations are where they lie on the other side. Because in that case, you know as I described making sure you get a good deal for both companies. A good deal in that instance may not just be A. For the selling company, it could mean a good deals abroad portfolio. Thoughts were. Seen that direct lamb looking the question to make sure I understand completely sold out not having seen it I would say having a counterpart in some form or fashion in the acquired company. In this case, we're saying him from. PG. Can. Greatly. Beneficial. I would still need to understand what the nature of the deal is and is this sort of an absorb or is this More merger of equals that will shape relationship. So can be very beneficial, would just need to be very clear on roles and responsibilities, decision rights and things like that. At Mirrored Naso just answer this piece that I have worked with private equity companies assertive. So when that's broad and help an organization that they are have an interest in in thinking about acquisition strategies. How do we think? About emanate and one of the things I will say is there are many times competing motivations within the private equity organization, there's a lot of focus on financial engineering meeting. You're doing a lot of modeling in your thinking about money where you can leverage capitalists about really cost to capital issues and through financial engineering. It makes sense however when you're talking to the operating executives, what you find is. Their focus is really on, wait a minute to our customers align. Can we actually reached these geographic market and what's our experienced in the past? A lot of those pieces get ignored because many times you don't know how to quantify them easily into the financial models. So there's a huge disparity and there's a lot of work that happens in translating that disparity to individuals. So it has been official. Because you get the exposure people know about the deal you have you know people are more ready to accept when you ask for capital infusion to go make an acquisition but then there's competing motivations. So I would really caution organizations to think about that kind of structure and if they can't have one that sits within the organization because you want someone who's thinks from that perspective executes from that perspective. So that's just been. My experience is I've worked with different organizations. We talked about how not every deal is the right deal and maybe that's the best deals in one that we have done. So why is there so much focus on deal sheets and the number of deals that you've done and how much of the executed. It's an oxymoron I find that interesting. So any thoughts on that? Those are the trophy and everybody in every profession likes to have their fees died and it used to be used to get an actual trophy on. The tombstone. Of A lot of those under pretended says something guess by yourself I I'd I don't know I I don't think it's anything more than now when I found myself interviews job jove's years I often talk much more about you know he can't say can't give details about deals at never happened but I do tend to emphasize that you know despite the fact that I've done about a hundred deals, it might career closed deal. There is probably three four times that I've gotten very far down a path evaluating, and those are just as the additives to my experience as the ones that close. I don't think it's anything more than just you know its metric point This is just been my experience I find that people that ask for that metric. It's usually because organization haven't had a corporate development function and it's one of what they think should be the criteria. In fact, it actually tells me a lot more when people tell me the deals they've done, and I'll give you an example if somebody says to you that I've done forty three billion dollars in deals in your I. Don't know in your mid to late thirties that says a lot to me. Right. It says about what you actually did on the deal and so in fact, it can work both ways. I would caution people to really think about what you put and to have the backing for everything that you put on your resume, its very critical, your credibility and you'll long-term professional success. So I'll just close on that topic as close. I'd love to leave people with thoughts that they can ruminate on about corporate. Development and I'm GONNA, give the states to you. Both I'll say when you come in to the funk shame, you have a lot of excitement yourself about getting it off the ground and again for all the reasons you guys, there's a lot of excitement around the organization about the fact that function being established and therefore signaling that we're GonNa, we're GonNa do deals, and that's exciting. But as the leader in the middle of setting it up, be humble be collaborative understand you're not going to. Be. The savior the turns company orbits around or helps it hits different trajectory in frankly you're not going to be viewed that way and there's probably many skeptical folks around the organization as there are people or be excited. So like any other thing of value, any other endeavor value note that this process and and to have an impact, it needs to be a process and the vast amount of collaboration is or is be needed across the organization you should. You should make the priority.