How to Build a Deal Model That Beats PE on Price

20:12Jeremy Segal:And selling in more efficient ways and not necessarily needing high expensive salespeople for lower value deals. You can leverage inside sales. And so really just changing that approach, you allowed for all these different optimizations. And as a result, we got it to our operating margin profile really quickly. Anything else unique on the deal that you saw that maybe others missed that allowed you to feed out all these PE firms on price? Looking back on it, it was a great deal for progress. Chef was one of those internet technology darling type companies that had grand expectations of an IPO that didn't play out.

20:50Jeremy Segal:And when you think about a workforce that thinks they're going to go public, and then all of a sudden they're getting bought by a 40-year-old software company, it has an effect. It has an effect on the target company. As our profile has changed over these last few years with all the acquisitions we've done, we've become so much more relevant, so much more interesting. And as a billion-dollar software company, we're a unique company at this point. It's a very different story that we tell now than we did when we were a$400 million business. We did that acquisition. Making sure that you think about dynamics like that when you're looking at an acquisition.

21:22Jeremy Segal:This company, the employee base, very different mindset. You've come to progress and we have people who have been employed here for 20, 25, 30 years. Very loyal people. And we have customers that have been here for 20, 25, 30 years. Very loyal customers. And then you take this faster moving startup type oriented company. there are going to be challenges with that. What were the big challenges when doing that deal? One of the challenges that we encountered was attrition. And the attrition happened because of the fact that there was a certain percentage of that workforce that had expectations of an IPO, had expectations about making a lot of money working with Chef.

22:00Jeremy Segal:That didn't pan out with the deal that we did. It was still a good value deal for the investors. But coming in and knowing that you were thinking you were going to make millions and millions of dollars, and here you are not making any money, that can create some tension. A lot of the people in their workforce probably preferred to work for earlier stage companies, more start-up centric companies. And progress is a well-established public company on the NASDAQ, billion dollar company. We're not a startup anymore. I'm going to look at a deal. I am looking at a deal that it's a similar situation.

22:30Company raised a bunch of money and they're underwater. The value is nowhere near capital that they raised. And it's going to be the same thing. Employees are going to bear the news that your options are worthless. It's not going to get any good.

22:41Jeremy Segal:You can leverage that with retention stock and retention equity and retention bonuses, which are things that we incorporate into our deals too. If there's people I want to keep. For people that you want to keep. Absolutely. How would you look at that? Would you want to say, oh, we're really trying to keep everybody intact. Let's come up with something broadly. Yeah, we usually have different categories. We have key employees. Then we have that subset below that core employees that we also want to make sure we take care of. And then there's the rest of the employee base. you still want to take care of at some level, but the ones that are key and core are the ones that you want to make sure get the higher allocations of that retention pool, for sure.

23:16Jeremy Segal:Part of it falls on the target company and the way that they message the deal. For some reason, the people at Chef didn't necessarily understand that they weren't going to make money on the deal. They didn't understand the value of their options or their equity. It's important for the selling company leadership to be able to explain, here's where we are as a company. Yes, we were valued at this. Maybe that was in 2021 when things were irrational. But things are very different now. Look at the public markets. Look at how software public companies have declined from a value standpoint over the last year.

23:49Jeremy Segal:Private companies need to have some of that perspective. They're not insulated from it. Think about the rank and file. They might just not understand. They might think that they're going to make a lot of money with 100 ,000 options or whatever they have. But when the deal gets done at a value that's significantly below where the last money was raised, all of a sudden that's not worth anything. But they don't understand that. So it's really important from a communication standpoint, from a messaging standpoint. And it starts with the leadership of the company that you're buying. And then it's important for us as the buying company to explain why these people are still important and what we're going to do for them.

24:23This company I'm looking at, what should I do? should I tell their leadership like, hey, I hope these employees aren't blindsided when we'd make a deal. Is there anything I can do as a buyer?

24:32Jeremy Segal:Well, I think one of the things you want to do, maybe you incorporate key employees into the deal. And if you identify that core set of three to five people that have a decent stake in the business, you say, I can't do the deal without these people. They're going to be motivated to make sure those people get locked in and excited about doing the deal with you and being a part of a bigger platform that you guys are. I like that. I'm going to come back to that too. That's a good example. Yeah. This ShareFile was one. I was bugging you after you did that deal. I was like, that's a pretty cool carve out you did.

25:02Jeremy Segal:That was a great acquisition for us. It was a Cloud Software Group. He gave me a sense of the size of Cloud Software Group. I mean, Cloud Software Group is huge. And Cloud Software Group sells million-dollar enterprise software deals. And here you have this asset ShareFile that the average deal size was$3 ,000. They had 86 ,000 customers. Now, we have progress. we have hundreds of thousands of customers too. We know how to nurture. We know how to work with small customers who are paying a couple thousand dollars,$10 ,000. It was not really in the Cloud Software Group DNA. One of the things, and going back to relationship building and trust, we had developed a great relationship with the CEO of Cloud Software Group and his head of corporate development when they were still at Broadcom.

25:45Jeremy Segal:When they moved to Cloud Software Group, we continued that dialogue, making sure that we in front and making sure that they knew that for certain things in their portfolio that maybe aren't core to them could be core to progress. When they were making those decisions, one of the first assets they decided to divest was ShareFile. We got the call to take a look at that asset. They're going to show it to you. Yes. I mean, through the bankers, they hired the bankers, but they knew. And the nice thing is, we knew a lot about the business because we had already had dialogue with them. So we were familiar with the business, which as we've talked about in the past, speed, certainty to close are key differentiators.

26:18Jeremy Segal:If I have a good familiarity with a business, I can move faster. So this business was in your pipeline. So we were familiar with the business. We were familiar with the asset. And it was non-core to cloud software group. But at$250 million in revenue, it was a very sizable part of progress. So it gets a lot of attention and progress. It gets a lot of love. And the employee base really appreciated that. And it was something that I think really differentiated us and made us such a good buyer for this asset. It's been fantastic. It's been a great addition. Was it like a real carve-out? Yeah. Was it more of a divestiture?

26:52Jeremy Segal:Yeah, it was carved out of Cloud Software Group. They had certain dependencies from a back office standpoint. So we had a TSA in place, which we were able to get off very quickly. The majority of the customers were unique to ShareFile. So that made it simpler. There wasn't an untangling a lot of customers that were Cloud Software Group and ShareFile customers. So that made things easier. How do you think through synergies in this deal? You know, it's the same. It's looking at the different ways that we could optimize the business better. They had not fully optimized the business. So there was still room to do optimization there.

27:23Jeremy Segal:And we took advantage of that. Like we always do in acquisitions that we do. Isn't the carve-out scenario just so different? It tends to be a lot more murky. You're really building this for four months. There's like even more unknowns. Well, it's an asset deal. It obviously requires you to really understand the business, understand what all the assets are that you want to buy and making sure you identify everything. So there's certainly more pressure on you to conduct that diligence and be as thorough as possible so you don't miss anything as opposed to a stock merger where you're buying the company as a whole.

27:52Jeremy Segal:That definitely requires more work. But we at Progress have such a great M &A playbook when it comes to diligence. We have a lot of conviction. We have a lot of confidence that the work that we're doing to diligence the company is going to identify everything that we need. What are the key things you want to look for if you're doing a car about? Like I said, it's still like an odd type of deal. You're trying to understand how intertwined is the technology? Is the technology coming all to you? Or are there parts of the technology that the parent company is going to still be dependent on? In this case, there was none of that.

28:26Jeremy Segal:So that made that part clean. There's the untangling of customers. And then there's the figuring out from a back office standpoint, what do we need to do to be able to support this? How can we do it more efficiently? than the parent company had done. And those are the things that we think about. So it's really making sure how clean or messy is this untangling going to be. And if it's going to be messy, it's probably going to make it more difficult to get through the process here at Progress. So we want to see a clean divestiture, as clean as possible. We've talked about this. We looked at that divestiture several years ago, and we were very explicit from the beginning that we needed to own the IP.

29:05Jeremy Segal:Towards the end of the process, when we were told they needed the IP too, and they would license it to us, that became a deal breaker. That came up too late in the process, and then you lose trust. And this goes back to the whole concept of trust and the importance of trust and relationship building. If you have issues or if they're going to be things that are going to make the deal challenging, let us know upfront and we can figure out if we can address But when we find out late in the process, it just changes the dynamics. We get pissed off and then they don't want to, they're harder to make amends.

29:37Like what else is there?

29:38Jeremy Segal:What else haven't you told me? Oh, I know. I know. Your spiny senses get raised. I agree. You get one lie, there's probably a million more behind this one. It's an interesting one. The Carb-Out, I think it was your biggest deals. That was our biggest deal. Yeah. Certainly from a top line standpoint, from a purchase price standpoint. Yeah. it took us to almost a billion dollars on the top line. Helped us achieve our first goal, getting to a billion dollars. Buyers lose competitive deals to private equity because they're modeling the same numbers. Jeremy won by building a model around what he could execute that they couldn't.

30:13He knew his platform well enough to see value nobody else could price. That's the whole game. Most corporate teams haven't built the discipline to play it. The buyer-led M &A certification teaches you how to build that kind of model before you price a deal. Build from over 400 of these interviews, 10 to 12 hours. Go to mascience.com and look for the buyer-led M &A certification. There's a link in the show notes.

30:39Jeremy Segal:I'm thinking about like sourcing these kind of carve-out opportunities. Was that deal competitive, by the way? Oh, yeah. Yeah, that was a competitive one too. So the way that it works at Parkes as a value buyer, we build the relationships. We're proactive on the front end, building the relationships, getting to know these target companies. But it's rare that a target company is necessarily going to just be like, all right, I'm going to sell the progress without checking the market and seeing what kind of value can they really get. So the key for us is making sure that we're an ideal potential buyer, making sure we're as knowledgeable as possible, making sure that they understand the value proposition that we bring to the table as much as possible.

31:16Jeremy Segal:Those are all things that we focus on early in that process. Because you're right, we're not going to necessarily be preempting deals. So they're going to be competitive. And this one was competitive too. I think it's because of the industry. Most of these are PE owners, investors involved, and that's their playbook is to get a bank, run a process to maximize value. Yeah. I don't blame anyone to go do a market check. You're not buying like a founder. We're very comfortable as a patient buyer to say, hey, go test the market. If you can get five times, seven times, 10 times revenue multiple, all the power to you.

31:49And I'll be happy for you. But if you can't, we're still a great alternative.

31:54Jeremy Segal:We're a great platform. We're an execution machine when it comes to our M &A playbooks from diligencing all the way through integration. So bankers know that we're going to be laser focused. We're not going to be asking for everything under the sun and diligence. Sellers know us from a certainty to close standpoint. Once we're committed to a deal and LOI stage, unless we learn something that's a surprise, we're going to get a deal done. We're well capitalized. We have an incredible economic model. We're 40 % operating margins, 30 % free cash flow margins. And it's a powerful model. It puts me in a good position to be able to go do deals and continue to grow this business through M &A.

32:32Profitability, a thing you look for? Or is it at least a path to profitability?

32:36Jeremy Segal:We're comfortable looking at things that are sort of... I like to refer to it on the cusp of profitability to say 20%, 25 % profitable. If you're bleeding lots and lots of money, it makes it a lot harder for us to get that to the kind of operating margin levels that we need to get to. if you're already at 50, 60 % operating margin, you're already fully optimized. There's not much room for us to create value. We're looking for companies that are, they can be losing a little bit of money to making 15, 20 % from an operating margin standpoint where there's still room for optimization. Strong businesses.

33:09Jeremy Segal:Yeah, absolutely. Even though the businesses that we look at aren't necessarily fast growers, we look at things like net retention and gross retention. And those have to be really strong because those are good indicators of customer loyalty. Maybe you're not growing 15-20%, but the customers that use you, love you, love your technology, are loyal. And that is the progress model. We're not going out there and chasing a lot of net new business. We are nurturing our install base. We're upselling and cross-selling to our install base. And we're continuing to innovate so that we can remain relevant and an awesome solution provider for our 200 ,000 plus customers.

33:47Jeremy Segal:Mark Logic. That was one of your favorite deals you ever did. Mark Logic. Yeah, it was an interesting one. Was it competitive? It was competitive as well. Yeah. Most of these deals that we're looking at that we get done are competitive. If you had to sell, would you get a banker involved? We've talked about that. I'm a big believer in a banker brings some maturity to a process. And particularly if you're an earlier stage company and you're a new entrepreneur who's never done this before, the process can be really hard. So in those kinds of situations, absolutely. Hire a banker to... You can avoid the situation I described earlier.

34:20Jeremy Segal:Well, yeah. Avoid where you get the surprises later. Or you can encounter that situation where the seller decides at the last minute that they're worth twice what you agreed to in the LOI. That's always a bad discussion. So you want to try to avoid that. So bringing that banker, bringing that maturity and that experience helps. MarkLogic was another great acquisition for us. From MarkLogic, we've been able to create our progress data platform, which is this great platform that does more than just aggregate data, but does data analytics and data intelligence. And we've incorporated Agentex search into this platform.

34:54Jeremy Segal:And it's a great differentiator for progress today. That came from the MarkLogic acquisition. Were there challenges to that acquisition? There are challenges with every deal we do. That one was a little more unique because there were things that happened that were surprising to us. One of which was maybe we took for granted too much that when you're between that announcing a deal and closing a deal, you're going to have access to the team of the acquired company. Start to have dialogue with them, figure out who are the keepers, who are the ones that we're not going to need, who are the ones that are redundant.

35:27Jeremy Segal:We didn't have that access during that period. And that was a surprise. We've always had access to that. How have we addressed that? in our LOIs. We make it very explicit that we'll need that access. And if you're not going to give us that access, tell us that now. But in this case, it was unique because it was the target companies last month of their fiscal year. And there was a lot of pressure to hit some of the numbers that we had talked about during the diligence process. And they didn't really want to have distractions. On the flip side, not everyone in the company is selling deals. There was a lot of people that we could have seen.

36:00Jeremy Segal:The private equity firm claimed that was their model, that they don't give access to people in that period. But we've never really seen that in all our years of doing deals. So it was a surprise to us. And so we created this thing called orange flags that we flagged during the diligence process. Things that rise to the level of, let's go talk to our CEO and CFO and discuss, do we want to continue going here based on these orange flags? What's an orange flag? We've been asking for this basic information for the last two, three weeks and they haven't given it to us. Why haven't they given it to us?

36:35Jeremy Segal:What are they hiding? When that happens, it raises that flag. It starts as an orange flag. We then discuss it with our CEO and CFO. Do we want to continue and continue trying to get this information or do we just want to walk away? Again, because we're a disciplined buyer, we're comfortable walking away. And when you say, hey, if I can't get this information, I'm not going to be able to do this deal. It usually lights a fire on the bankers, on the sellers. And I understand as part of the strategy, bankers are going to hold off on giving certain information while they let other people get in and do their work so that there isn't one company that's way ahead of this other company.

37:11Jeremy Segal:So I understand there's all that kind of stuff happening in the background, but getting access to certain key information is key. And if we don't get it, we're going to walk away. Are there other flags? Is there an orange flag? I'm familiar with red flags, green flags, and yellow flags. Oh, no. There are plenty of red flags. I mean, red flags Red flags are like the deal breakers. Yeah, red flags are deal breakers. Orange flags are if you have enough orange flags that could become a red flag and then that's a deal breaker. Or this warrants me having a conversation earlier in this diligence process with my CEO and CFO to see if it's even worth continuing with this process.

37:46In this example, this is like basic diligence access we're talking about and you put it as an orange flag. Is there an escalation process that you do? Is it just making that point to the banker? Like either we get this information or we're going to...

38:00Jeremy Segal:That's the escalation point. You say, hey, I had a conversation with my CEO and CFO. And they're like, if we don't have access to this information, we can't proceed with the deal. You can decide. Do you want to share it with us? What's that conversation look like when you go back to your team to decide if... And have you done that? Were you just like, we're going to walk? Oh, yeah. We've had those conversations internally. And again, because we're a disciplined buyer, we're comfortable saying, all right, the best thing for us to do is to walk. You don't fall in love with deals. That's key about our corp dev team.

38:27Jeremy Segal:And something that I've learned in this type of environment for 25 plus years, you can't fall in love with a deal because you never know what's going to happen. So you always have to have sort of that balanced perspective. There is like not falling in love with the deal, but then also having a motivated seller. That's the thing I'm learning more recently because I chase things. And when you find out the seller is really not motivated. And that's an orange flag. And we learned that on a deal because we had a deal that had two owners. They pretty much owned the entire business. It was a bootstrap company.

38:58Jeremy Segal:When one was on board, wanted to sell, and one was not on board, and you could tell they were never on board, but they capitulated with the process. We should have raised that as an orange flag earlier in the process. Instead, what happened was we expended all the resources. We did all our diligence. We negotiated a definitive agreement. We basically got to the finish line. And then one of the seller who had always shown a little bit of reticence basically came back and said, I hired an independent valuation company. They think my value is significantly greater than what you're going to pay. So I can't sell for that.

39:33Jeremy Segal:I'll sell for this, which was a discount to what the valuation company said, but a significant premium to what we had agreed to. And that's walk away. So you walk away from that deal. So it's painful, but learning that lesson has an orange flag. If you don't see the seller being fully bought in to doing a deal, that's a flag. There's no recourse. If you threw money for QV and all this stuff at that point, there's no way to get that money back? You get none of that money back. That all becomes OpEx. Be on the seller. Painful. Ouch. Yeah. I would not be happy about that. Yeah. We talked about you guys don't retrade, which is good.

40:09Jeremy Segal:Remember, we are not going to retrade unless we learn something significant. Yeah. It's like obviously a misrepresentation. Sorry. That's completely different than what had been told to us. This is like a QV comes back and says, hey, you sort of represented these numbers for this fiscal year when it should have been this fiscal year or something like that. Or some of these ad backs you put in aren't really justifiable or things like that. Whatever. Material. Yeah. If it's material enough, that's different than just coming up with a laundry list and saying, hey, well, now I've got you. GRR is 85 instead of 90%.

40:43So we're going to deduct a couple turns for that. Yeah.

40:47Jeremy Segal:And again, like things like that. And we're going to do our own ARR analysis and determine what we think GRR and NRR really are. Someone tells us their calculation is 87 and we come up with 88 or 86 based on the work that our independent advisors do. We're not going to change the price for something like that. But if it comes back and we're at 75 % and you were telling me it was 85, 90%, that's a big delta. Can you teach me how to do deals with market cyclications? Is that a word? Market cyclications? Yeah, it's interesting. The market cycles. Because you've probably seen some of this happen already.

41:23Jeremy Segal:Oh, I've seen a lot. And we rode a big wave, and it was good times. It's interesting, and you're seeing it play out right now, what's happening with software. AI can claim that software is dead, but AI also realizes that they're highly dependent on software to inform their LLMs and to basically make the AI have some semblance of value. So software is not dead. That said, the markets have responded to some of these quotes about AI can replace this, AI can displace that. And you've seen this massive drop in market value in software companies. Now, that's on the public side. You're not seeing that on the private side.

42:04Jeremy Segal:The challenge is when you as Progress are a billion-dollar company growing 10 % to 15 % top line, including in organic, with 40 % operating margins and 30 % free cash flow, and you're looking at this private company that's$50 million and maybe has 5%, 10 % operating margin and wants to sell for 5%, 10 times, the math doesn't add up. And so you need the private markets to catch up to where the public markets are. And I don't think that's happened yet. Now, there's going to be more pressure. There's going to be more pressure because private equity needs to show liquidity. Venture capital is going to be focused on investing in AI and is going to want to find liquidity for some of its four codes that are in the software ecosystem.

42:49Jeremy Segal:And they could create great buying opportunities for progress. But we're not going to relinquish that financial discipline that we've had all along unless they're willing to capitulate and recognize that this is the new world order from a value standpoint, they're going to be in a challenged position. So we're saying there's no immediate direct correlation between public company valuation and private. Right. If that was the case, then we'd be able to buy all these private companies for two, two and a half times. We're trading them and we're not. And it seems like there's the value still up there because of private equity ecosystem still hasn't.

43:25I sense that too.

43:26Jeremy Segal:It might be a little bit dialed down, but not dramatically. It hasn't capitulated, particularly with private equity companies that are profitable, where they can wait and see how this software... Is that what it is? There's still optimism where they're like, oh, we're still optimistic that valuations will rebound at some point in our five-year term that we're going to... That's got to be part of it. If they don't have that DPI pressure, then they can hold on to it longer for the private equity firms that have DPI pressure. This isn't as bad as our 2021 bets that we made. It's interesting. Like when we look at HitchBook and see what the 2020, 2021 valuations are, we completely disregard that because we know those were irrational times and companies aren't going to get that kind of value.

44:06Have we found a rationalization of why it was so irrational back in 2021?

44:11Jeremy Segal:Was it just we believe the world was going to end and this is our last chance to buy a deal? I don't know. I just didn't. That thing surprised me so much because the market went down and then all of a sudden everyone went deal crazy. The value. Well, the values were crazy. Money was free. Interest rates was at zero. Private equity could just go do deals. And that's when it was a little more challenging for us too, because they could be a lot more aggressive from a value standpoint because the debt that they needed to do these deals was so cheap. Now that debt is more expensive. So they can't be as competitive from a value standpoint.

44:44Jeremy Segal:So it puts us in a better position. But when money is free, it's easier to pay higher valuations. Is there like a coin term for the 2021 era? The software rush? Oh, no. So, okay, you had that period and you obviously seen a lot. Even now we had a correction with the public and there's still, I think a big part of it is just so much dry powder out there. There's a lot of dry powder out there. So that needs to get deployed without a doubt. What I'm trying to do is get a good outlook of running my own business. I got between deal room and M &A science and I look at deal room and I'm like, was this the new normal, which is it used to be like eight to 10 X and a good healthy business with all positive rule of 40 and et cetera, et cetera.

45:23Now it's probably at six to eight. And again, is that the new normal? Do you settle for six or do you think more optimistically that things will change? I'm just wondering, like when you do deals, how do you think through that part of this? Because if the valuations fluctuate in terms of what's considered normal and what's market, then what do you base it? And obviously your view is because you're public that it's on the current view. And it seems like there's a sentiment with the private sector that they're thinking, well, it's not. We don't have a gauge.

45:51Jeremy Segal:We have lots of data on how the public market trades. We know that if you're a rule of 10 or a rule of 20 company, you're probably trading more in this range. If you're a rule of 40 to 50 company, you're trading in this range and so on and so forth. We know that. But again, it goes back to the private companies and they're not necessarily willing to accept those kinds of trading multiples that public companies are. We look at a lot of companies that are rule of 10, rule of 15, rule of 20 that are going to hold out for a five times multiple. I don't know where or when they'll ever get that. And if they're profitable, maybe they can hold out and continue to execute and maybe grow into that value.

46:29Jeremy Segal:But it's going to take time. It's going to take time. As more and more pressure comes into the system, lenders taking over deals because they're so over leveraged, good assets starting to trade at much more favorable valuations. Others will realize that it's time to pitch. I can understand right now, no one's ready to be that first company that says they sold at this super low level as opposed to waiting. But we're not going to get back to irrational days. Are you seeing new deals in this current market that you didn't previously see? That's a great question. And the answer to that is yes. So we're seeing a better...

47:03Jeremy Segal:Well, a couple things. We're seeing some companies that are significantly worse that are willing to trade at anything that we don't want to touch. Companies that are declining. Companies that have net retention rates in the 70s. Gross margins in the 50s. a lot of those kinds of data points that stand out as companies that we need to stay away from. Crash and burn. And then we're seeing higher quality assets for sure. The challenge for us is the kind of multiples that we paid two, three years ago when we were trading at 11, 12 times EBITDA. It's harder for us to pay those same kind of multiples now.

47:37Jeremy Segal:You run into that kind of challenge. But yes, the caliber of some of these assets that we're seeing are good quality assets. That gets me excited because if you're able to buy good quality assets at the kind of multiples that you were paying over the last few years for companies that maybe weren't as good in quality, even though they all still were solid companies, there's an opportunity to get some really new technology and potentially even accelerate that growth on the top line as well. And different types of deals coming out. I want to wrap things up. You obviously know I'm trying to break my way into getting the first deals going.

48:09What do you think is like advice? Just first time acquisition, thinking through, We talked a lot about sort of synergies and getting the deal model structure right.

48:18Jeremy Segal:What can I do to not screw that up besides call you and panic? Yeah, the key thing is to continue to have conviction, to continue to validate what your original strategic thesis was through the process. When we're doing our diligence, we're constantly asking the same three or four key questions. And I try to get all of my deal team, diligence team folks to be, when they're doing diligence, be thinking about how does what they're learning inform those questions. Does it give us more conviction or does it give us less conviction? And if it gives us less conviction, why? And can we address that? Or is it something that escalates to the level of walkway?

48:55Jeremy Segal:For me, that's always key. And then building the relationships, building the trust, and getting to know the CEO of the company, and having more casual interaction and not just, I need your employee census and your financial projections for the next three years. but just getting to know them and getting to know what made their company tick. What would they like to see with their company in the hands of a bigger company? And really show that you care about that. If you show that you care about that, that will go a long way. So constantly validate your assumptions through the deal process. And make sure you still have that same conviction.

49:33Jeremy Segal:Build that relationship. Yes. And build those relationships and really be thinking about like, how is this company going to operate within my company? What am I going to do to make it better? All right, I'll let M &A. Jim, what's the craziest thing you've seen in M &A? There's so much crazy stuff out there. I keep getting new stories. Having a founder of a company, literally the day before you're going to sign a definitive agreement, try to retrade on price is pretty crazy. The day before? It's pretty crazy. It happened to me when I was at LogMean 2. Twice? We weren't quite at the finish line there, but we were close.

50:07Jeremy Segal:And six months later, he was like, can we still have that deal? And it's six months ago. Like, no, no, that ship sailed. There's a saying I heard. Is this true? If you get a good price, you should probably sell. Well, it's like buying a house. That first offer is probably going to be the best offer. That's true. This has been great. Thanks for taking the time. Always fun. Always fun to hang out with you, Kisan. I appreciate it, Jeremy. Fellow M &A scientists, thank you so much. If you stalked through this far at the podcast, you are an M &A scientist. Reach out to me on LinkedIn. Connect with me.

50:37And I'll commend you. Just make sure you mention podcasts. I get so much spam on LinkedIn, but mention that you actually listen to the podcast. Love to hear from you. Welcome the feedback. You got topics I haven't covered yet. Love to get those suggestions. Criticism. You think there's better ways to format this or do I can do my job better. I'll take that criticism. Want to keep learning and improving. Till next time. Here's to the deal. Jeremy walked into competitive situations against private equity and won. Not by bidding higher, but by building a better model. Plenty of corp dev teams don't lose their deals because they lack resources.

51:10They lose because they're pricing a company the same way private equity is pricing it. On the numbers in the SIM, without asking what they could specifically execute that nobody else can. By the time they figure that out, the deal is already gone. That's the whole discipline behind buyer-led M &A. You build a model first, you understand what you can actually deliver, and the price follows from that. The Biolet M &A certification gives you the framework to do it so you're not learning it deal by deal. Go to mascience.com and look for it. Link in the show notes.

51:47Thank 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, Kisan, 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.

52:39Again, that's mascience.com. Here's to the deal.

52:52views and opinions expressed on mna science reflect only those individuals and do not reflect the views of any company or entity mentioned or affiliated with any individual this podcast is purely educational and is not intended to serve as a basis for any investment or financial decisions here.