Cross-Border M&A: Doing Deals in Latin America

21:44Rodrigo Dominguez Sotomayor:You have to be thinking about social issues and the impact of that project in the local communities. When and how is going to be taking that deal to the regulator for approval? And something that probably 10 or 15 years ago will not be that relevant. For instance, what firm do you use locally to help you push the deal forward with the regulators? That is now super important. You want to make sure that you're selecting a firm, a local council, that not only has the expertise on the subject matter, but also that has a good working relationship with the regulators. Now, doing diligence on your local council is way more important than it used to be before because now you have to check not only the experience and the credentials checkbooks, but also the working relationship with the regulators.

22:31Rodrigo Dominguez Sotomayor:That's very important. What's the parameters? You have to do the consent, whether it feels small enough to go below the radar? It changes on a country-by-country basis. For instance, in Mexico, you have to look at the size or the value of the assets in Mexico and the value or the revenue or assets of the parties to the transactions. So it's a twofold analysis. You look at transaction value and then the combined revenue or asset value in Mexico of the participants in the transaction. If you hit those thresholds or you exceed those thresholds, then you have to take the transaction to file for a pre-concentration approval.

23:06Rodrigo Dominguez Sotomayor:Peru has a similar system, but in Peru, the trust was a little bit lower than Mexico. And they also look at what's the effect, the competitive effect that the transaction will have. And then you have two regimes or two levels of approval in Peru, like a phase one approval, which is faster than the phase two. The phase two is a deeper analysis by the antitrust authority, and that takes usually longer than the phase one approval. Chile is the same. Brazil has its own systems. when it gets actually very tricky is when you have a multi-jurisdictional acquisition. So when you're buying a company that has business operations in all these countries, you have to do this analysis for each of the countries.

23:44Rodrigo Dominguez Sotomayor:And oftentimes you have to file in each of the countries. And then you can't close until you get all the approvals. And oftentimes we have staggered closings, depending you can close for one country. You get the approvals here and wait until to close for another country when you get the approvals in that other country. But as you may expect, Like when you have those staggered closings, those SBAs or merger agreements can be very complicated because you have different moments in time when you close the acquisition. But yeah, those are like in Wine & Case, for instance, we are built for those deals.

24:15Rodrigo Dominguez Sotomayor:So we have a very large international footprint that allows to represent clients on those multi-jurisdictional deals very efficiently. If we are doing a deal where the target has assets in Mexico and in Brazil, for instance, then our Mexico City office will get involved. And then in Brazil or in Colombia or in Chile, we will use local council, but we will coordinate the whole process and just get the deal approved. That's what I was curious. It's got to scale out if you're going to do the multijurisdictions. They're also a lot of fun. But we're, I will say, we're purpose-built for those cross-border multi-jurisdictional transactions as a firm.

24:53Let's talk about some deals. Yeah. What's the diligence process actually look like when you're buying a pipeline in northern Peru versus a midstream asset in Texas? That's actually a good one.

25:06Rodrigo Dominguez Sotomayor:The availability of public records is probably the main difference. In the U.S., you can access property records. First, in the U.S., you will use a title company to do title searches. And then the lawyers will review only the title reports. Maybe you will look at some of the title documents if something pops up by reading the title report. In Latam, we don't have that. Let me just share with you some interesting data point for Latin America for your listeners. So in Latam, we have notary publics. In the U.S., you have notary publics, but anybody can be a notary public in here. In Latin America, a notary public is a licensed attorney.

25:44Rodrigo Dominguez Sotomayor:It's a practicing lawyer. And in most of the countries, you can only have one notary public per certain number of inhabitants. Like in the city, you probably have a handful of notaries that can have the public faith and attestation authority. In real estate transactions, in most of these countries, they have to be attested by a notary public. So you cannot do a deal unless the notary public gives public faith. and does that. So when you're researching title on property that you want to acquire, you have to go through a notary public. The notary public will do the searches in the registry. You got to pay fees to that notary public, which is a licensed attorney.

26:22Rodrigo Dominguez Sotomayor:And they will give you a stack of bits of title that you obtain by just getting photocopies in the public registry. And then you have to review everything. And oftentimes those documents go back maybe a hundred years or more. Wow. Imagine that for, you're building a pipeline for hundreds and hundreds of miles of land that you want to acquire or get an easement on. The diligence process is very tedious, way more than it would be in the U.S. Not to take any merit from my U.S. real estate partners, which are great. This actually requires a lot of physical work and review of physical documents. And then you have surveys that were put together maybe or produced maybe 25 years ago.

27:06Rodrigo Dominguez Sotomayor:and then you look at the survey and you have gaps between the survey and the deeds because it's not as sophisticated as it is in the U.S. That's one of the aspects of diligence that I will say would require more time and probably more careful review in LATAM than in the U.S. But another point that is actually very interesting is that LATAM has a very, and this is from Mexico to Argentina, has a very employee-friendly legal regime. So the concept that we have in the U.S. of employment at will, for instance, That doesn't exist in these countries. You cannot fire people unless there's cause. There's this principle of job stability that was adopted by all these jurisdictions 100 and 120 years ago.

27:47Rodrigo Dominguez Sotomayor:And they have a very employee-friendly legal regime. I will say one of the most important aspects of diligence is labor and employment. You have to understand how that works in each country. You have to make sure that you're fully compliant. And if you are thinking about redundancies or reductions in force post-closing, you got to be very thoughtful and really map them out and model that because it may require paying large sums of money. As these countries have statutory severance where there's no employment at will and you can only terminate with cost. If you fire someone without cost, then you will have to pay statutory severance.

28:26Rodrigo Dominguez Sotomayor:and then you have to calculate that statuary service for everyone that if you're thinking that maybe you need to shut down that facility after the closing or as part of the integration, you're going to have to reduce your employee force by X percent, then that could carry a very high cost. I've had cases where the client comes to me and whoever represented them in the acquisition didn't fully explain the implications of this. And when they call me, I have to give them the bad news. is like, well, it's what? Argentina has this law that you can fire people without paying this much in Mexico and all that.

29:00This is big in the interviews I've done. I've mentioned I've done a number of them in Europe. Yep. And it's like a huge thing for every country. You have to think this through ahead of time. Very similar at Latin America. You don't have time to hunt through generic resources or wait for the next conference. The M &A Science Intelligence Hub gives you battle-tested playbooks from over 400 dealmakers instantly tailored to your role and deal stage. Whether in diligence, integration, or anywhere in between, get the framework that fits right now. Ditch the boring panels, get answers that fit your deal.

29:36Learn more at mascience.com. Again, that's mascience.com. Don't ask me how I know, but I heard that you had to deal with the situation with a union leader, like literally hours before you closed the deal.

29:55Rodrigo Dominguez Sotomayor:Oh, yeah. Can you tell me that story? Sure. Well, I had to get on a flight and go down to Juarez. He loves Juarez. It's a border town. My client was actually buying an industrial company that had a couple of facilities in northern Mexico. I don't know if you know this, but the border, that's where most of the manufacturing activity happens for a lot of multinationals because it's right there. So, yeah. And you probably heard about this on the news, but all these manufacturing facilities are right on the Mexican border. And that's the facility they trade, right? So some products actually have to go back and forth, the U.S.-Mexico border, maybe a hundred times before they can be finally imported, the final product imported into the U.S.

30:35Rodrigo Dominguez Sotomayor:or Mexico. So that's how these production chains are integrated. But anyways, so we were buying a company that had two facilities into El Juarez, and I had to fly down there because one of the closing conditions was actually shutting down one of those facilities. We needed to make sure that we closed one facility and then moved the employees of that facility into the other facility. And then we had to actually deliver the company to the buyers with that other facility actually shut down and no contingencies. In order to do that, under the collective bargaining agreement, we needed to run it by the union.

31:09Rodrigo Dominguez Sotomayor:I mean, if we had done this without having the union support, we probably risk having a strike or the employees actually filing or initiating proceedings to complicate the whole transaction process. So we needed to make sure that we had the buying of the union. So I flew down to Mexico, to Ciudad Juarez, sat down with the union leader for about six or seven hours, listening to his objectives and what he needed to do. What were the concerns of the employees? And just to find a way to get this through and also giving him the assurances that we were going to take care of those employees, which by the way, my client actually wanted to take care of these employees in a way that wouldn't be detrimental to them, but also that will make economic sense in the context of the whole transaction.

31:57Rodrigo Dominguez Sotomayor:We spent a lot of time talking about Keith and his family and mine and what he liked to do during the weekends and his personal hobbies. And we had a very nice meal. We then walked back into the facility. He introduced me to a few of the employees there. And then at the end of the day, he told me exactly what he wanted to do. He said, I'll sign off to this deal if you can ensure that this is going to happen and that my employees are going to get these protections. I took it back to my client. And at the end, we had to sever and pay statutory severance to some of these employees. We actually ended up giving them a very nice deal.

32:32Rodrigo Dominguez Sotomayor:And then we got the deal through and we closed. I think that if we had not tried to do that deal without getting, spending that time with the union and the employees and showing them that we cared would have been a bad idea. I look back at that deal and I think that actually taught me a very important lesson in life, which is it's not only about the equity owners. You have a lot of constituencies involved in M &A transactions and just have to be mindful of that. Sometimes the interest of those other constituencies and the equity holders may be at odds and you cannot reconcile them. But if you're thoughtful, it just gives you another edge.

33:08Rodrigo Dominguez Sotomayor:There's some trust. I like your style. Like you... This is how I like to approach deals. Thanks. Does tequila help influence mezcal? Yeah, but... Yeah. I'm a big tequila lover, I can tell you that. It's my favorite drink. Have you done deals? Have you worked with any tequila brands? Yeah. Oh my God. So I actually... So when I'm ready to private label, you can help me out. This is actually public, but I represent... One of our deals is we did an investment into the first non-alcoholic tequila in Mexico. We partnered with Luis Hamilton, the Formula One driver. It was very nice to negotiate that deal with that.

33:42So look it up and try it. It's good. I was actually surprised at the non-alcoholic wine I tried in France. Yeah. I don't know if the one's here, but in France it's impressive. This is good.

33:50Rodrigo Dominguez Sotomayor:This is good stuff. You should check it out. I like it. I have a couple of bottles in my house and I use it a lot for cocktails. So it's good. You can have as many as you want because it has no alcohol. That's good. Maybe we'll try both. We'll do some regular comparison. For sure. Transaction insurance. better known as reps and warranties. Oh, yeah. You heard of it? Yeah, all the time. What does that look like when you do deals in Latin America? It's cool to see the insurance company be very innovative and come up with another product to sell everybody. But just to see how it's widely adopted, and it does make a lot of sense.

34:24Rodrigo Dominguez Sotomayor:Yep, it does. And when you're in an auction, if you're a bither, you cannot show up to that bither without it. It's that accepted in Latin America. It is. Is that because of the influence of bankers that saying, hey, we have our international bank. Again, Latin America is now a relatively mature M &A market where you're now seeing a lot of these very interesting targets coming up for sale as part of the natural capital recycling process of PE funds. So the companies that were acquired maybe 10 years ago, eight years ago by some of these funds, now they're coming back to market as the funds try to sell them down because that's what they do, capital recycling.

35:03Rodrigo Dominguez Sotomayor:You start seeing a lot of those coming in. And for the same reasons in the U.S., the practice is actually trending towards having non-recourse M &A transactions where the sellers, they want to clean exit. They'll give you the reps and warranties that you need on your purchase agreement, but they're expecting you to be insured just as the U.S. So that's becoming the norm for M &A deals in LATAM. The only requirement that we're seeing is that the transaction has to be governed by New York law. That's one of the requirements that we see a lot of these insurers to actually impose in order for them to insure the deal.

35:35Rodrigo Dominguez Sotomayor:Although the market is now developing to a point where they are starting to get comfortable with local law M &A deals. We've gotten a couple of Mexican law deals insured recently, which is good because it demonstrates that the insurers are getting more comfortable with the local law risk. And also a few of deals under Brazilian law getting insured. So. Widespread now. It is. And as I said, when we were on the sell side, it makes a lot of difference. If you have an offer for X millions and it's an insured deal, then that's probably better than another offer for the same amount of money where you have to stand behind the reps on warranties and give indemnity to the.

36:17Rodrigo Dominguez Sotomayor:And have a holdback. Yeah, or the holdback and all that. I'll tell you, Rodrigo, I was not a believer in the beginning, but after I've seen payouts on that policy, then it's actually a pretty good thing to have. It is. As long as you don't get a total loss situation, but that's... And there are also situations where it makes a lot of sense. So when you're making a partial acquisition, for instance, and you're buying about 50, 60 % interest in a company, and then the seller is going to be your partner in that business. You don't want to sue your partner because there was a breach of reps and warranties.

36:49Rodrigo Dominguez Sotomayor:Maybe the relationship at that point is going to be sour anyway, is that suing your partner probably erodes more value than anything else. So having insurance just gives you the ability to recover or have reached reps and warranties from the insurance company instead of having to go and sue your partner. That happens a lot. Also, now when we are on the sales side with families, they like the idea of having no recourse against them. They will push for the buyers also to have transaction insurance. And by doing so, you are facilitating the negotiation process because now, because there's no recourse against the seller, now they feel more comfortable giving you the set of reps and warranties that you need as an investor coming in.

37:34Rodrigo Dominguez Sotomayor:Yeah. It translates into them having to do a deeper sell-side diligence exercise and also for the buyer to actually having to spend more money doing diligence because insurers, they want to see a robust diligence report before they can insure a deal. but at the end of the day it just facilitates the whole negotiation process and prompts a more candid discussion of I need these reps and warranties I need all this information the incentive for you to be open and transparent is that the more information you give me the easier for me to get insurance and make this a non-recourse deal of course insurance will not cover anything that is known and existing liabilities and all that But it is getting to a point where people start appreciating the value of having non-recourse deals.

38:23Rodrigo Dominguez Sotomayor:And that's facilitating the negotiation process. I like that perspective that if it's an ongoing partnership that could help alleviate some friction. I never thought about that. Yep. We should start a company and sell reps and warranty insurance for marriages. Yeah. How about that? Because maybe it could be like the same thing. You know, you get a point, you just sue, you know, we'll give you some recourse here. The auction process you talked through, was there any difference between running a sell-side auction process in Latin America between there and the U.S.? Obviously, we talked about some regulatory checkpoints.

38:55We talked about the employment considerations. Anything else like process-wise?

38:59Rodrigo Dominguez Sotomayor:It's pretty much the same. But the product is or the whole construct of running auctions is relatively newer for Latin American corporates. But they understand that you have to maximize value. Also, there's a very clear and common understanding that by running an auction, you are opening the universe of potential buyers significantly. So if you have a bank running that process, that target may be marketed or presented to more potential bidders than if you just want to go out and look for a one-to-one bilateral potential buyer. Particularly LATAM corporates are understanding the value of those auction processes more and more.

39:42Rodrigo Dominguez Sotomayor:And now I think that's probably the norm for processes in LATAM. So this year or last year, I would say that maybe 80 % of my deals were auctions and 20 % were bilateral. And those bilateral were like companies that had a pre-existing relationship. They knew each other and they somehow were maybe a supplier or a distributor or they knew. each other because of their normal dealings that's how those deals came to be that's interesting I would expect the other way around there'd be a lot more proprietary deal a lot of auctions yeah are closing parties different than US and Latin America they're the same but more tequila more tequila more tequila and very good food I was going to say Latinos are by nature like people that like to celebrate they like celebration a lot not only that they have signing parties or signing dinners and milestones.

40:37Rodrigo Dominguez Sotomayor:Something happens and the client will call you. Celebrate more milestones throughout the process. It's a day. Even an excuse to celebrate. Even signing an LOI, you could go celebrate that? Probably not that much. So I'm in Houston most of the time and Houston and Mexico City are very well connected and I have a lot of clients in Mexico City and they will call me like, hey, can you come over? We're going to get together with the management team and we want to talk about this opportunity and can you be at this restaurant by seven? And it will be like 10 a.m. in the morning. And then I said, okay, sure.

41:07Rodrigo Dominguez Sotomayor:And then I'll go to the airport, get on a plane, fly down to Mexico City, and I'll just have dinner with these guys. And it would be something that we can perfectly discuss on the phone. There's a value from their perspective for me to be there in person. And it's a one and a half hour flight or two hours. So it's not that much, that big of a deal for me. And I'll just get on the plane and go there. In Latin America, there's still a lot of value in being face-to-face with clients and connecting in person. And it's the same not only in Mexico, but our Colombian clients, Peruvian, in Chile is the same.

41:36Rodrigo Dominguez Sotomayor:Brazil is even more. So yeah, for those reasons, I personally still spend a lot of face-to-face time with clients throughout the region. Can we talk about Argentina? It's coming back online. So Argentina, it's a great country, great jurisdictions. When I started my practice, I was doing deals in Argentina. So they defaulted in 2001. And then the economy started to pick up after that crisis. M &A activity and capital markets activity started to pick up again. And then it wasn't that vibrant. Argentina was still in the M &A map. And then in 2014, I think it was 2014, they defaulted again on sovereign debt.

42:16So for many years, you couldn't really do much in Argentina until very recently,

42:22Rodrigo Dominguez Sotomayor:where the new president was elected. A week after he started his administration, he and the party that also won the majority of Congress, they passed this legislation that changed everything. I think that was needed in terms of the systemic change that the economy and the politics in Argentina actually needed. Because you had a wonderful country with all these natural resources, very smart people, strategically positioned in Latin America to be a superpower that for many years was subject to these very populist policies that didn't work out. And the effect of that was to essentially eliminate Argentina from the map for a few years until this happened.

43:04Rodrigo Dominguez Sotomayor:And now with this new administration and these legislative changes, our clients are looking back on Argentina and they're calling us. Okay, so what are the opportunities? What can we do now in Argentina? There's a chronic underinvestment in infrastructure for the last 20 years. They have to catch up. And naturally, they don't have the money, the resources to do it themselves. So they're going to have to open those economies to private investment. It's just a matter, again, of having the right legal framework. Remember when we started the conversation that when you're coming in, you have to understand what treaty protections you have and what's the legal framework that will be regulating your investment.

43:39Rodrigo Dominguez Sotomayor:Once that happens, and I think it's actually getting towards that point, once we have all these legislative changes in Argentina, that's going to create a lot of opportunities for our clients and for investors. And I'm optimistic about what's going to happen in Argentina. Love to see it. Anything that could progress the economy, benefits all the people. Would be great. FinTech. We haven't talked a lot about tech. Oh, yeah. You've worked on tech deals too. Yeah. I love those deals. Yeah. Tell me why they're great deals. You're with the founders. These kids are just amazing. Very smart people. What I like about it, it's like we talked a lot about very asset-heavy transactions.

44:15You talk about examples and properties included, and there's more of that real footprint. I feel like these tech companies tend to be people. It's just people at the end of the day.

44:24Rodrigo Dominguez Sotomayor:Latin America is actually becoming a hotbed for startups. You have a very young demographic. The population in Latin America is probably one of the youngest in average around the world. So the rest of the world is aging. But Latin America, the median age is 32.9 years old. You have a very young set of population. And then you have a constant increase of the middle class. So more people are actually growing into the middle class as compared to any other part of the world. You have an emerging middle class. combined with a very young population that are eager for faster and better services, for more functional infrastructure, and that are very comfortable using cell phones and accessing services, working on tablets and cell phones, because that's how they grew up with those devices.

45:12Rodrigo Dominguez Sotomayor:So the adoption of new technologies in Latin America is actually happening at a very fast pace. And then think about fintech, financial services. This is a stat that actually blew my mind. and I was looking at it. It was a couple of years ago when I read it, but I think more than half of the transactions happening in LATAM every day are cash-based transactions. Imagine that. So in the US, you can go for weeks without going to the ATM and having cash in your, I mean, you pay everything with your phone or a credit card. In Latin America, at least the last time I checked, I don't know where the stat is today, but half of those transactions every day were happening in cash, people paying cash.

45:53So imagine if you're a fintech company, if you're a founder, all the opportunities that you have when you have a young demographic, a growing middle class, an underserviced population from a banking perspective, and people feel very comfortable doing transactions on their phones.

46:07Rodrigo Dominguez Sotomayor:That has created all these startups and all these very interesting companies that are reaching unicorn status, raising a lot of money from VC funds. And we're actually doing a lot of those deals, not only on the fundraising side, but the M &A. market consolidation and also companies realizing that in order for them to be successful, they have to secure that they have access to these technologies. So we're doing a lot of that work. Huge potential. A huge potential. And I like those deals because I think that's the future. We're also doing a few AI transactions and you'll be surprised of the things that are happening, not only in Latam, but the rest of the world.

46:47Rodrigo Dominguez Sotomayor:It's just the pace of how AI is evolving and the potential of it is just, it's amazing. I agree. It just blows your mind. I agree. Like you can't get away from it. You can't get away from it. You go and talk to these founders and they're like in their mid-20s, early 30s and super smart guys. Being around them and hearing them, actually being that sounding board when they come to you with ideas and they want to do this and then you just guide them. I have a lot of clients that actually are represented in the fundraising stage and not yet on the M &A side, but all of them, they are eventually thinking about exiting via M &A or an IPO.

47:23But in the process, after they raise the money in the day-to-day business, they call me and they ask for questions.

47:29Rodrigo Dominguez Sotomayor:It's a very interesting perspective of that, all the potential growth and opportunities in the technology sector. I like those deals. I like how you keep up with it. It's a lot. I feel like I get overwhelmed by so many. everybody you talk to it's like I'm using this app and this app and this app I'm like I use AI a lot for everything I'm a big believer in the technology and it's going to transform the world and I play with it all the time it's very powerful and what's coming in it's going to change the world but anyways that's for another discussion I'll save that for a whole other AI rant can we talk a little bit about the National Venture Capital Association oh yeah because I think you had a take on this where we've obviously published a lot of standardization for fundraising, documentation, which is a good thing.

48:15Helpful.

48:15Rodrigo Dominguez Sotomayor:Particularly for these companies that have limited resources and they can spend a lot of money with lawyers and being creative. Early stage. And then it helps you learn. Your take as a lawyer, is it less back and forth that now there's a little of a standardization? So you just go with those forms. And when you're actually on the investor side, that's the expectation is that you're going to use those forms. And it just saves you a lot of time. How is that panning out when it comes to M &A? Why can't we do that in M &A? Why isn't that standardized? I got to tell you that because those forms, you'll see those forms being adopted by Delaware corporations most of the time.

48:49Rodrigo Dominguez Sotomayor:But they also, in Latin America, it's very common for those cold costs to be set up in Cayman for a number of tax reasons. What we're seeing is those NVCA forms being adapted to work with Cayman companies. There are a lot of similarities between Delaware corporate law and Cayman corporate law. So it wasn't intentional. It was more of a coincidence. But you see those MVCA forms actually migrating to be implemented for a lot of Cayman companies, particularly for LATAM deals. Because those documents are essentially drafted and created following a U.S. style type of documents, it is very common for U.S.

49:26Rodrigo Dominguez Sotomayor:counsel to be involved in those M &A transactions because just the way those documents are structured and drafted, it makes it very natural for the M &A to be also governed by Delaware law. I will say that the vast majority of the deals we do are the LOWR now. It's funny because historically in Latin America, you don't see merger agreements that often. The reason being that you don't have a pulverized cap table with option holders and prefer share shareholders and common share holders as you probably will be more common for a US company or for a Cayman company in that context to have that type of cap table where it makes sense to have a merger agreement.

50:03Rodrigo Dominguez Sotomayor:You have to get everyone's consent to get the deal through. So in LATAM, the most common type of acquisition document is just a traditional purchase agreement, a stock purchase agreement, where you have a limited number of sellers. But when you have a pulverized cap table, like in these technology companies for startups, then it makes sense to use a merger agreement. And that combined with the fact that you have the NBCA forms, which are U.S. style documents, makes it very natural for those deals to be run by U.S. lawyers in a U.S. kind of way. And that's why we get involved in a lot of those deals as a firm.

50:41So it's helping to set some structure when you have those forms earlier, but you're still having to bespoke a lot of this stuff for M &A just to do nature of everything, the business, where it's operating out of, et cetera, et cetera.

50:56Rodrigo Dominguez Sotomayor:Exactly. So those forms are, I know them, but you have the articles, the preference, or the preferred shares, And then you have the voting agreement, investor rights agreement, and the right of first refusal and co-sale agreement. All those documents, which are standard forms, when you are on the fundraising side, try to stick to those documents as much as you can. Why? Because it will make the deal faster, cheaper for everyone. And if you're an investor, you don't want the company reinventing the wheel. You don't want to depart too much for those documents. because of those documents, now we can execute deals pretty easily and faster and cheaper.

51:35Rodrigo Dominguez Sotomayor:When you're going to buy one of those companies, then you have to review all of that. And then it is very natural for our US trained lawyers to actually work through all the dynamics of those documents, because those documents were designed to apply to Delaware Corporation. So it's, yeah, I would say like any other M &A deal, you have to address the specifics and you have to run the whole M &A process. But from a corporate law perspective, it just facilitates things a lot. I'm happy to hear that. I'm happy to get my legal bill reduced and then it helps you out. That's the main purpose of it. Work on the more strategic stuff that's important.

52:13Can we sum up what we talked about? I want to sum it up in a form of advice for a company that's contemplating doing an acquisition in Latin America, which we basically started from. And the big thing I took away from this conversation that obviously you got to pay attention to regulatory environment you're getting to involved with what the mechanics of the deal is going to entail with labor regulations, all those components. But there's a big part of a culture that you really need to respect and embrace. That's like the beauty of doing cross-border deals. That's what makes it fun. And when I think about doing this deal, there's a long tail of integrating the business.

52:53And ultimately, we always talk buyer-led M &A. It's taking this integration-first approach to your deal is ultimately what this book and framework I published was about. When you think about what we talked about and that big emphasis on culture and you going to go meet the union leader and breaking bread and building that relationship and really getting the final buy-in to close the deal. How should somebody think about that when it comes to more of this holistic view? Because once you close a deal, there's a lot more parts because now it's the community. It's still the regulators. It's maybe more union folks lurking around.

53:30But how do you think about that? Not only just getting the execution of the deal, but ultimately making this deal successful.

53:37Rodrigo Dominguez Sotomayor:The post-closing integration is probably one of the toughest parts. When you do a deal, you deploy all this massive amount of capital. all. And then all of a sudden you have a new company in your portfolio with 450 employees and you have to make it work. And if you are a PE fund, then you have five or seven years to actually turn that asset around and make a profit. It's an art, I think, the post-closing integration process. I mean, you touch on all the important points. You have to understand the culture. You have to really follow through your strategy and objectives that you said when you were actually planning the acquisition.

54:10Rodrigo Dominguez Sotomayor:But it goes back to my point of being patient. There's so many things that can go wrong in a company. And then when you are a thousand miles away from that asset in the U.S. and you have people in Chile, it makes it more complicated. In my experience, the most successful dealmakers, the secret is in planning and understanding what the objectives are, having a clear view of the annuances and pitfalls before you actually close that deal. That goes to this strategy planning from the outset of the transaction. And then just following through. Understanding that it's not going to be perfect. You don't know what you don't know.

54:53Rodrigo Dominguez Sotomayor:And there is Latin America. It's a region that has its own complexities and issues. But again, good preparation, solid strategy, understanding the country and understanding the asset from the outset of the transaction is going to give you a lot of visibility planning ahead and implementing your objectives, your goals when you close that deal. You know, I think as an M &A lawyer, most of the times our deal ends on the closing. So we don't get to see how that post-closing integration process actually plays out unless there's an issue. When I talk to clients in a few months or a couple of years after we close the deal and I ask them, how was it?

55:30Rodrigo Dominguez Sotomayor:The common denominator for those that were successful was just sticking to the strategy and the plans and also being fully aware of what you're getting into. Understanding the country, understanding the asset. Can I add, plan to spend some time in the country that you're hiring in and hire a good lawyer? Hire a good lawyer and spend time and understand the culture, for sure. Rodrigo, what's the craziest thing you've seen in M &A? Oh, I had a chance to represent a government in an M &A transaction. The craziest was when we were in a room about to sign that deal. And then the undersecretary of the agency that I was working on, he asked everyone to leave the room.

56:09Rodrigo Dominguez Sotomayor:I was about to leave and said, no, no, you have to stay here with me. And it was me, her, the lawyer for the other side, and the project manager that was running that deal for the counterparty. And then she laid out the whole strategic value for that government to actually to get this deal done. And there were all these different considerations that never crossed my mind. And it was a very frank moment where the undersecretary and this executive were the level set and were looking eye to eye on what the objectives were. And at that point, they realized that those objectives were compatible and they did the deal.

56:45Rodrigo Dominguez Sotomayor:And then she stood up. She left. They shook hands. She gave me instructions. The guy gave instructions to his lawyer. We drafted the document. and 10 hours later we were signing. Wow. Kind of those situations where let's cut it out. Let's be frank about it. This is what we need as a government. These are my priorities. Can you deliver? Otherwise, we don't have to do this deal. We don't care. Not money. This is, we need this and this and this. For me, that was eye-opening. I understood that there were powers way above negotiation. Yeah, like lawyers being smart about one clause or another that go beyond that.

57:20Rodrigo Dominguez Sotomayor:And it was a crazy situation I never thought that I would be part of. And I was sitting in there like watching these two guys. That's pretty cool. It was pretty cool. That's a good experience. It was a very good experience. Yeah. Things get handled the way it probably should be, but... Yep. Rodrigo, this has been great. I appreciate you taking time, having a conversation with me. Thank you. Thank you for having me here. It's a great conversation. Yeah. I got a lot of value. If you listen this far, my fellow M &A scientists, love to hear from you. Give me feedback and tell me if this was worth the billable hour or not.

57:52No, this was like all on a contribution to the M &A Science community. So I thank you dearly for that. If you do need some good deals in Latin America, reach out to Rodrigo. Mention M &A Science. He'll give you 10 % off.

58:06Rodrigo Dominguez Sotomayor:We'll make it work. We'll have an M &A Science discount for 10 % off, especially if you're an M &A Science member. Also, I'm on LinkedIn. I dropped my privacy guard. So it's welcome folks to in. But put a little note. Tell me you listen to the podcast. So I'll know because I get a lot of spam on there. and I would love to hear some feedback. If there's any criticism, topics haven't been covered, I'm open to that as well. Until next time, here's to the deal.

58:41Thank you for taking the time to explore the world of M &A with our podcast. We love hearing feedback. Tag us on a LinkedIn post, add a review on Apple Podcasts. We'd love to hear from you. If you need help standing up an M &A function or optimizing one that you already have, we're here to help. And if we can't help you, we probably know someone that can. You can reach out to me by email, kison, K-I-S-O-N, at mascience.com. Or you can text me directly at 312-857-3711. If you just want to keep learning at your own pace, Visit mascience.com for a lot more content and resources. That's where you can also subscribe to our newsletter.

59:26Again, that's mascience.com. Here's to the deal.

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