Lessons from 90+ Deals: Questex CEO, Paul Miller on Cultural Fit, Value Creation & Post-Close Audits

23:22What's your take on this? They'll often give you the reasons why. Yeah, we had a really bad issue here, an event, something happened, whatever it might be. And then you've got to start to make some pretty deep decisions on, this looks like it's a serious long-term problem, which could cause long-term decline. No value creation opportunity here. We're going to be managing, as I used to call them, falling knives. Avoid those as much as you can because you end up with a lot of blood on the floor. Now, you're not looking for perfection. Not every customer is happy. There are always things tactically that can go wrong.

23:56We're saying something pretty material. Material and widespread. Six or seven customers are saying the same things independently about this particular company. Can't wait to cancel. Yeah. At that point, you're saying, hey, we got to get some answers for this. If the answers are extremely defensive or if the answers are a little bit dancey, you're starting to say this might not be one for us. Okay. You bring this up to the management team and your options are either do nothing, walk away from the deal. What do you usually end up doing? Walk away. Oh, so you wouldn't want to renegotiate the price.

24:30Recent history, I think we've renegotiated and got a deal done at all. What drives you to walk away from a deal? What are the reasons? Some of them we've touched on. The customer diligence comes back really bad. In a way, I think that's kind of obvious. Yeah, is that you've done your customer diligence. There's a lot of negative. It's going to be too much work. Yeah, you're just feeling a lot of churn going to happen. Yeah. Often it comes down to the seller is what we would call, this is my take, unrealistic in expectations. This is almost sort of pre-LOI. Here's our price, here's the offer, here's the structure.

25:02and they come back and say, actually, you're eight turns of multiple away from where I need to be. And we're like, we're out. And we're really fast. We're really... One of the things that I have learned over the years is quick no's, quick yeses are way better than maybe if you could do this and this, we could get this and this. And you just end up wasting a lot of time. So really fast. This is what we think the business is worth. This is the LOI. If you're accepting that, now let's get on with the due diligence. In due diligence, the things that would cause you to walk away are some discoveries of stuff that culturally you're like, wow, there's four lawsuits from employees against them.

25:40Or these customers are telling us that this is really a falling knife situation. Or the executive team isn't aligned. You end up meeting the exec team and you're seeing they're sort of rolling their eyes when one of them is speaking. All of these are issues where you're thinking, that kind of causes way too much time to fix things rather than, hey, let's spend our time on how we create value. So people, you could come in and find out this is not what you thought it was and people are not performing the way they should. When you see a sim or a sip, whichever phrase you want to use, when you see the memorandum, if it's on the market, you're seeing the target company at its very best.

26:21And that's fine. We all know it. Normally there's a hockey stick. Like, yeah, the next 10 years are going to be the most explosive growth of any company in the world. So you discount that pretty quickly. And then you say, look, this looks like an attractive business, but an offering. Offer's accepted. Then you get into the real work, or at least what I call phase one of the real work. Phase one would then go through to, yep, we're confirming the offer. We're going to buy the company. Phase two of the real work is now we've got to make it work. And we bought the company and now we've got to make sure it's all going to happen.

26:51Walking away from LOI, there's no penalty other than what you spend for doing diligence. Correct. It's so hard to walk away from a deal. It is. You better be pretty good when you're putting an LOI in. Like your personal time. Yeah. The fact that you championed the deal. All of the above, yeah. And the opportunity cost, by the way, that you put into that, that you could have been doing on another deal. You've got to be pretty clear if you're putting in an LOI, that this is something that you would take through to completion unless you discover something really catastrophic or something that you don't think is fixable.

27:23So you want to be pretty sure if you're at the LOI phase that you're ready to take this forward. Help me click into the mindset here because again, there's the, let's just call it deal fever. But I feel like your early analysis should be the opposite. It should be building the business case, which is like figure out all the reasons why you shouldn't do the deal and then be able to justify it that beyond that, there's still compelling reasons to do the deal. At that point you bought in, but then it gets tough to still do the, whatever the smoke through the clouds. It does. You got to remain very disciplined.

27:53We are private equity health. So there's a real discipline around M &A. So you're going to have a pretty mature criteria. What does that criteria look like? Mine's still early stage. Mine's a gut feel criteria. Okay. So teach me what a mature criteria looks like. The gold standard is the value creation piece. One plus one can equal more than two. Okay. So there's a strategic thesis. There's a strategic thesis. And that comes down to a lot of detail at the end of the day. What's the customer set look like? Is the crossover in the customer set? Do we know them? Or is it a new customer set? Is this an adjacency to markets that we're currently in?

28:28Or is it a bolt-on to markets that we're currently in? Is it a brand new market that we're not in? That's got its own sort of issues in terms of research. But let's say that it's an adjacency to the current market we're in. Let's say we're in hotel real estate investment. And we're looking at student housing real estate investment. Adjacency. Student housing hotels, pretty similar, except one's full of students for four months a year. The other is renting out rooms by the day. But in essence, you're still investing in real estate. So what we'd want to know is do any of our current customers that are in hotel real estate investment, JLL, CBRE, do they also have a practice for student housing?

29:06And the short answer is they do. So then we'll talk to them. Hey, CBRE, you're a big customer of ours. What's your take on student housing? Oh, huge strategic initiative for us. We're putting a lot of effort into it for the following reasons. Student housing is going to take off because there's a shortage. Whatever, whatever. This is very hypothetical. Then we'll say, okay, who do you talk to? Who do you use? Who do your student housing group use? Can we talk to your student housing group? And they'll say, oh, we go to this event. We deal with these particular companies. These are the leaders.

29:33So you're already starting to sort of eliminate or at least dampen some of the potential risks. We've got a top customer who's got another division who's focused on this particular area. And they've told us that this particular company that we're targeting is one they consider trustworthy that they want to do business with or do business with. So you're starting to get into that kind of phase of, hey, we're confirming now from third parties that we trust that there's something here. Once then you get in front of the company, then you're starting to confirm, okay, we've got some comfort that there is commercial rationale here.

30:08The leader of our business would have constructed a paper, as we call it, a hypothesis. Hey, this is this company. This is what they do. This is what we found out about them. This is what we would do with them. So you're building out a combined P &L upfront. It's what a combined P &L would look like, what they currently look like. Here's what we would do. Here's where we think there are revenue synergies. And here's where we think there might be cost synergies. Sometimes there's both. Sometimes one is more important. We think we should bid for this business. Then there's a very disciplined meeting with my private equity folks.

30:40Hey, what do you think of this? Have you thought of that? Have you gone back to them and asked them this question? Have you visited them? Have you had a fireside chat? Get comfortable with them? Why are they selling? All those types of questions. So you've had these early conversations. You get an NDA sign and saying, Hey, we're going to officially get down to business. Send us some stuff. NDA sign. I want to send us initial request list. A timeframe from getting that initial request list out to actually producing everything that you just told me. Weeks. Weeks. A couple weeks. Yeah. Okay. A couple weeks.

31:10We got a package. We've got a package. We're ready to have a meeting. A business case on doing this deal. And then we're presenting it to the board in your case? Present it to the board. It's an interesting meeting. Paul looks like another winner. Let's just have an approval. They've never seen a non-winner, by the way, by default. But they'll start asking some really deep questions. Okay. So you get cross-examined. Why are they selling? Why are they selling right now? Did you ask that question? You're like, actually, no, I want to go back and ask them that question. You normally won't walk out of that meeting with a offers in, etc., etc.

31:39etc. Normally, there's some further questions to ask to get confirmation on. Get those questions answered, come back for the second board level meeting. Assuming everybody's lined up, you then agree on the other one. How about the structure of the deal itself? I guess in my case, I don't want to keep all the cash I can. And then everything else is expensive. You raise equity, it's expensive. You raise debt, it's expensive. Do you try to push as much as you can for the seller to take either financing or rollover equity? Again, that's a depend situation. Sometimes for the smaller acquisitions, it's a cash deal, cash on hand for us.

32:13Give them a swipe cash and then have a retention for the executives. Correct. And that's the cleanest way of doing any kind of deal. Everybody is happy. If you structure the deal where you say to them, here's some cash up front, but we need to see performance over the next three years of X, Y, and Z, that can be great for the buyer because you're getting some risk mitigation there. We're only going to give you a certain price if you hit these numbers that you have given us. puts them a little bit on the line. What I found is in practice when you do those is that it creates a lot of internal strife along the way.

32:47We could have hit these deals, but you took my CO away from me and therefore I couldn't hit them. Therefore, you're stopping me hitting the number. Therefore, I can't get the earn out that I was proud. Book a man, call lawyers and it's not good. Yeah, at their worst, that's where they go. So we try to avoid those, but in some cases, they're necessary because you want a little bit of proof that the hypothesis is correct. Let's go back to the house. How do you set up your company for a successful acquisition? Again, I was learning over the years of doing these. We have a few things in place. We have a playbook integration plan.

33:19Every aspect of our business from tech to finance to operations to go to market is involved in the playbook and what we're looking for and how we do things with the checklist. At its best, in my experience, after six months, we would then audit, how are we doing? And then we'd audit the seller company and say, how do you think we're doing? And there was a sort of a red, amber, green kind of rating along a whole swath of issues. After another six months, we do it again. And then after 18 months, we do it for a final time, which is basically the, has this worked? And at UBM, what happened was depending on how good your report card looked like after 18 months is that you were more than likely supported for further capital, for further investment.

34:05We've taken the best learning from that at QuestX. So we've got a very strong integration playbook across the board. We're actually quite centralized in a lot of our operations. So a lot of the scale of our business is taking in those central operations, embedding them very quickly, and then go to market, marketing sales, content. We've let that sit in the market, at least for the short term. Sometimes we'll embed, sometimes we'll just leave it there. It's a separate unit. So for me, the key is know what you're doing up front, have your checklist at regular intervals to make sure that you're on track, and then audit, did we do what we said we were going to do?

34:45Both from the seller and the buyer side, not just from my side. I like that in the feedback loop. What about when you had a bunch of people that never did M &A before? Good way to learn. That's the only way you can do it. If that's a gating factor, you're not doing a lot of M &A. Because you're sort of saying only the people that have done it before can do it in the future. That does a few things. A, M &A is very dynamic. There's no one size fits all. B, you want more people involved in this than fewer people. So I want my sales leaders in the market coming back to me saying, Hey, I got a new competitor.

35:17They're really good and they're really hurting us. That to me then is an M &A target for me potentially. At the very least, it's a strategic discussion of why are they hurting us. Nothing better than learning by doing. That's how I learned. We got bored. I had no idea what it was like to get bored. I remember getting acquired early in my career and being in a room full of people from the acquired company and one of them saying to me, Hey, you need to be quiet and remember who bought whom. I still remember the phrase. And I sat there thinking, wow, that's how this is going to play. I'm a second-class citizen because you bought us.

35:52That didn't last very long. Not a place I wanted to be. But that was their attitude. I didn't choose to work for you. Yeah, exactly. Exactly. And interestingly, they were working for a public company. It wasn't their business. Wow. But they were very much on the, we bought you and therefore we're cleverer than you. Yeah. Whereas my take on it is that when you buy a company, you're trying to learn from them as much as they are trying to learn from you. I want to talk more about that. How do you increase the success rate of your acquisitions? How does a buyer-led approach ensure scalability and long-term success?

36:23A lot of it comes from, A, I'd say the pre-work. Have you thought this through? And have you thought it through from a perspective? And I know a lot of people say this, but we really try to implement it, that this is your money. If you're buying a company for$10 million or$20 million, and you've got$30 million in the bank, let's just say that's the number. Do you want to spend$20 million on this one company? Two-thirds of your potential spend. And if the answer is yes, and here's why, and it's really powerful, you're already more than halfway there. This person is saying, even with my own money, I would make this bet.

36:58And often you'll find people say, if you're putting it that way, I have these concerns. Okay, fine. Let's hammer those away. In my mind, a lot of this is the pre-work. A lot of it is time. A lot of it is getting to know the target, as we talked about right at the beginning here. Have you done your homework? Do you know them? Have you got some insights into them? The more you can get comfortable with that, the better the outcome is going to be. Then if you have the check-ins on how you do it, when you do it, is the audit in place? Did they do what they said they were going to do? What have you learned?

37:31Pour that into the data bank. Next time you do it, hey, do you remember last time we did one here at this size that we really missed the tech due diligence? It turns out they had a huge technical debt and we spent a year trying to catch up to get them up to speed. Let's ask this target what their technical debt looks like. You sort of learn and it's iterative and it's iterative and it's iterative and you get better at it. The ones I feel where you don't get very good at are the ones that become quite emotional. I like this. It's the best thing I've ever seen. We got to have it. Got to have it.

38:00And you start ignoring some of the signals on the edge because you're so in love with this particular acquisition that you kind of lose a bit of discipline. It's boring and mundane, but discipline really matters. Have your checklist. Check the checklist. Check it again. Learn from what you've done before. Add that to your checklist next time. You're just improving your chance of success all the way along. Do the pre-work and don't let the emotions keep you from skipping steps. It's hard. It's hard. But yeah, keep the emotions in check. It is hard. I got this issue where I find a company and I like it and it's profitable and it looks good.

38:34Finances make sense. We guys should do this deal. Little things creep up. That's right. And it's like one by one. This creeps up. This creeps up and it's so hard to say. It's hard to say no, particularly if something checks off a lot of boxes on being exciting. It could transform you. It can add a... If you're growing at 12 % and this is growing at 24%, you're seeing accretive growth. It's hard to look away from that and say, hold on a minute, but what's their organization look like? What's the skill set look like? What's the customer set look like? What does the tech stack look like? And these are boring.

39:10Yeah, I said, wow, it's growing 24%. That's the exciting piece. And M &A can get exciting. It gets very unexciting six months in if you've missed all of that stuff and you're finding yourself in a absolute nightmare integration scenario where all of our time is being spent trying to figure out what on earth. So it was exciting six months ago. It ain't very exciting now. Yeah. It also puts people off the next one. Okay, so that's how to increase the success rate is do the pre-work. Do the pre-work and do the detailed pre-work, not just the surface level pre-work. How about buyer-led approach to ensure scalability, long-term success?

39:45You got to have an executive team that is scouring the landscape and knows that this is one element of your value creation strategy. Organic growth is great. Launches of products are great. But M &A is a leg of the stall that you've got to be focused on. So always be buying, always be looking, always be filling the funnel with prospects. You have everybody, the whole executive team is hunting. They do, yeah. Including HR. Interesting. They may be at a conference. They may say, Hey, I just heard this person speak. She's got a fantastic culture. We've got a lot we could learn from this particular company.

40:19Then I'll sometimes reach out to the CEO and say, Hey, I've just heard about your award-winning HR presentation. Can I buy you coffee? I'd love to learn a bit more. That could then lead into an M &A discussion. Might just lead into a better HR discussion. And if I can, I try to push it down even further. Sales leadership, marketing leadership. who you're seeing, who you're partnering with, who's helping you get your product to market faster. And they can sometimes lead it into M &A. So on the buy side, always be looking, always be having the decision is, can we build this or should we be buying this to move faster?

40:51What's this like color code rating system that you guys use for... The red, amber, green? Yeah. That was on the audits at UBM that I've stolen best practices from. And UBM was a billion dollar plus company. And they were an audit to be feared in some ways as the CEO that you were like, oh boy, I've made a mistake here because there's a whole swath of red that we said X. It's all come through rated red. We miss this in due diligence. We miss this in integration. We miss this on day one. This is the M &A team that's getting rated. Yeah. We got a scorecard on the M &A team. Yeah. Ooh. But hey, why not?

41:27It's money. It's investment. If you're choosing to invest in M &A versus invest in your own organic growth, why not have the same scorecard? It's always just you get the deal done and maybe there's some success factors that get pretty vague and foggy after the deal's done. But to score the process itself, that's actually pretty interesting. Personally, that's a necessity. If not, you end up moving to the next one and the next one and the next one. You're not learning from, hey, what did we get wrong last time? It's never perfect. It's not something to be afraid of, but it is definitely something that I think makes you better next time.

41:59When you say data-driven in M &A, what does that mean? All of these things, actually. you're looking to get as much of that gut feel that you mentioned earlier out of the actual decision. Gut feel is still part of it. No matter what anybody says, there's still a little bit of my instinct tells me something smells wrong here, even though all of the data is telling me it looks good. So there's still a gut feel element. And I think it'll be there forever. But increasingly, there's more and more data. And it's not just the financials. That's the easy part of data. It's employee engagement. It's what I mentioned earlier about, are you seeing people leave the company at a rate that's above industry average?

42:37Why? What's wrong there? Is it a benefits issue? Is it a 401k match issue? Is it a, actually, this is a terrible place to work issue? Data, data, data, data, data, all the way along, including data around culture. And if people don't have it, then I think you've got a question mark in your mind. If you're not measuring culture, then how do I know that what you're telling me is actually right. Yeah, that's a good point. So really get as many data points as possible to track it and be more systematic about how you approach deals. And if somebody tells you, I don't have the data, then I have a huge question mark around what's the company.

43:11Ah, so that's part of your evaluation process. Yeah. We live in a world where data is oil. Data is all over the place. The real clever piece is how you're using it. You predict your business, etc. But that's for another conversation. But if you don't have the data in the first place, I'd have a lot of questions about what, are you running a company on gut feel? When you did the scoring for the M &A team, what happens if they get a bunch of red marks? We had to present to the board what we got wrong, why we got it wrong, what we're doing about it. Confession. Yeah. Pallonoscopy, as somebody referred to it, at one point in time.

43:46Yeah, it was, I say chore. Chore's the wrong word. Definitely a process that was, it was a pretty forthright, honest, everything's on the table here. And it wasn't personal. So if you had a swath of red and you were the leader of the business that actually made that acquisition, what did we get wrong? Why did we get it wrong? Did you get over excited? And what could you have asked? And what would you ask next time? And it was all done for the purpose of let's get better at making acquisitions. Let's just get better. Now, if you did three acquisitions and it was a swath of red, often what would happen is that it'd be like, hey, we're actually going to place our money and our bets with another leader.

44:25because you just haven't learned from making the same mistakes over and over again. It was a way to access capital. But there was no punishment unless you continue to make the same mistakes, which I don't think anybody did. Success rate on acquisitions actually grew pretty significantly. So we were hitting... Some accountability. Yeah, seven, eight out of 10 were doing what they said they were going to do. What's the hardest deal you've done? Some strange deals. Anything with an international flavor, particularly in an area of the world where you don't really understand fully all of the customs, no matter what books you've read.

44:58So the hardest one I did was actually in China, in Shanghai, China. And we did all of the above that I've been talking about throughout this podcast, all of the checks, all of the data. I had met the CEO a dozen times as a professor at a local university. It was a good business. And we bought the business. Integration was hard. There was a lot of flying, a lot of schlepping to Shanghai at this point in time. And we did as good a job as could be expected of a US-based or North American-based team to acquire this business. What we missed was some of the cultural elements of what the actual owner was expecting to do with the business.

45:36And I won't go into it all because it will get a little bit too personal. But it's a different culture for however capitalist or not China is. It's a different culture. and I wish I'd had somebody on the ground who could have given us a little bit more insight into what we were actually going to be looking at post-acquisition. That's interesting. I'd say it worked and it wasn't a complete failure. It worked, but the work we had to put in to make it work, it was intense. Yeah, that goes back to the whole cultural piece. Would you say that's the most important factor to make a deal successful as a cultural integration?

46:12I would. Cultural integration, people in general. Everybody says it. Everybody says this. It says it, but it's hard to, it's easier said than done. It is. And it can be a bit of a throwaway line in some cases. Yeah. Oh yeah. It's all about the people. But I met one executive. He says, oh, I go on site and I walk around the office and I can sense the culture from that. And that gives me a sense if I should do the deal or not. That's extreme. If you get the opportunity to do it, I'd say do it every single time. You do get a feel. You do. Okay. So I got to go on site, walk the office. Yeah. Everybody's remote now though.

46:43Our company's pretty remote. We have a few people. Which, by the way, gives you a lot of insight into how then do you communicate? Tell me how you communicate to your employees. I said some of your Zoom calls. That's unlikely. But you can ask, how many Zoom calls are you doing? How many town halls are you doing? Can you share with me some of your communication? Give me a month in the life of this company, how you communicate to your staff. Yeah, the employee handbook. You think that's actually a good template from somewhere? Yeah, it's part of it, but it doesn't give you the in-between-the-lines stuff, which is the most important culture.

47:12That's what's tough. That's the thing I'm struggling with. It's the most important and it's the hardest. Because you have such a slim window. You don't have access to enough people to really read culture. You have access to a handful of executives. What do you find online? What kind of surprises have you seen? Like cultural surprises that shocked you or threw you off or stuff to be aware about? Yeah, there's a few. There was one earlier in my career. I'm going back almost 20 years where the actual work we did on cultural fit was probably as intense as any work I've done before. We spent time in their office, had a lot of dinners with the executive team.

47:49We got to know them, bought the company. And it turns out that the CEO was a bit of an ogre that we hadn't seen or even picked up from his direct reports. But when he got in the building, he was literally throwing his weight around and barking at his team and our team to the point where our team just didn't want to work with him. They wanted to find workarounds. It frankly was a shock and you don't get shocked often. But that one was like, wow, he put on a good act all the way through the whole diligence. But once in the seat was pretty tough to work with. So you get that kind of shock. Next time you really go deep on that and you start to figure out, hold on a minute, what's it like to work with this guy?

48:28You start asking a few different questions. It's so true in the culture stuff because leadership is a huge part of it. And if you got the right leadership, a lot of these, yeah, there's a lot of tactical details of integration. But the right leadership are going to get through that. They're going to problem solve. They're going to make decisions. That's it, right? Leadership teams are key. Leadership teams are... Yeah, leadership's aligned. They know how to lead. They drive by example. Problem solve, make decisions. That's what's ultimately going to get things to be successful, get people aligned.

48:55This is where the AI to help you assess culture, maybe. I don't know. I'm a huge fan of the promise of AI and where and how it can help and what gets put into a data lake. But we're a little ways away from the real promise of M &A and AI. Okay, so the international deal I'm working on. And there's a little bit of why is this got to be the first deal I work on? And that's one. Start at the hard end. Right. And then the devil's on the other side. And the devil's like, you're probably gonna do a bunch of international deals. So why not just cut the wrist and get it going? So what to look out for?

49:25Yeah. The good thing is European country. We're speaking a common language. I think it's a good thing. The culture read is like me taking a flight and having a beer with the executive. Maybe I'll get the walk around the office. You should do if it's offered. Things like employee engagement surveys, if they've done any. meeting the executive team, making sure you do a dinner with the executive team. I had an old boss who used to call the CEO up on a Sunday at 3 o 'clock just to see, do they answer the phone? Do they not answer the phone if they do? Or do they answer their email or not answer their email?

49:57Get a sense of work-life balance. Again, the glass doors, the LinkedIn, the referrals, all of that kind of stuff that sits in a bit of an intangible below the iceberg, which is there. It's not hard. It's just a quick search. All relevant. You ever done a backdoor reference? So maybe they say, here's three or four key executives. You ever like back channel reference? I have not. You think I should? Internationally, if you can, I don't think it would hurt. Or if you know somebody that works with that company, a client or a business, it doesn't hurt to say, hey, what do you think of X? And they'll tell you.

50:33Often they'll tell you, a great person. What you see is what you get. Run away. Be careful there. This is the fourth person to ask me and I don't feel comfortable giving any kind of reference. Yeah. I haven't done the formal background, but informally, yes. Informally, yes. What's best advice to make this international deal successful? You got to do the hard miles, number one. You got to get on the flights and you got to get out there and you've got to do the dinners and the meetings. How many flights or in-person meetings before I get an LOI signed? Depends how big the deal is. Small deal. First deal.

51:09Small deal. First deal. First deal, though. I don't want to screw up the first deal. I want to be in three different scenario meetings with the CEO and if possible, the executive team as well. Before LOI. If you can. Okay. If you can. Yeah. Ask for a fireside chat. Fireside chat. Just a fireside chat. No formal management presentation. Just, hey, you and me and your team, just ask you a few questions. Sometimes they'll have a banker present depending on where they are. They probably eliminate it. They may pull in one or two other people on the team. That's about it. Yeah. But that's okay. then you get to see three people.

51:39You get to see the CEO and a couple of others. You get to see, are they aligned? Are they finishing each other's sentences? Or is the CEO all over the two other executives in the room saying, I don't know if you don't mind, let me tell you what the real story is. And the exec sitting there going, I was telling the real story. Now you're going to tell your version of the real story. You start to pick up the little signals of actually, this is a CEO who doesn't surround himself or herself with people that are competent at their jobs because he or she is finishing their sentences or talking over the top of them.

52:10And for me, all of this is, it's all data. That's a key thing. That's a key thing to know is like how dependent the business is on. How strong is the management team? Yeah. If it's the CEO barking out all of the directions, then you don't have a very strong seller number twos. If the CEO leaves, then you're left high and dry. But you're only going to get that really from, if you can, I'll always do this pre-LOI, But if you can, try to meet with the teams and certainly can meet with the CEO. And then you can always ask the CEO, hey, I'm going to be over in a couple of weeks. Would it be possible for you to have the CFO and the head of product?

52:45There's going to be some back and forth. He or she can always say, no, thanks. That's their call. Sign an LOI and then we can have that conversation. Fine. There's nothing wrong with that. But if you can, get on the plane, sit down with them at least two or three times, the CEO, and then say, you know, I'm comfortable with this person. I like this business and I'm ready to put an offer in place. And then after the offer is accepted, you got to go back again. And that's where you've really got to see the manager team in action. How do they deal with each other? You find some wacky things in those meetings.

53:17I've seen CEOs talking and the COO just rolling their eyes, looking at this going, there's an issue. I don't know if it's a big one or not yet, but I'm going to dig in. Yeah, that's not good. In general, just making sure this first deal is successful. Well, same advice. Just spend the time with the people and really... Spend the time with the people. And if you can, corroborate your feelings with what's going on out there. So for instance, you're meeting the CEO, but their chief financial officer is talking at an event in New York City. Go and see him talk. Go and see him and say, this guy, yeah, they talk the same.

53:52This is something that makes me feel comfortable. So if you can, just corroborate the CEO to CEO with, I've got enough information around the outside here that can really help me get this deal done. This is helpful. You've got feel though as well. I know. A little bit of your gut. This is helpful. Yeah, good. Thanks. Not too much. Thanks for not getting rid of all of it. You're letting me keep a little bit of it. Yeah, you do. You do. It's why you're doing it in the first place. It seems good. It feels good. Yeah, just got to make it more programmatic. Right on. Data-driven. Data-driven. What's the craziest thing you've seen in M &A?

54:23There was a weird one in COVID because we're in the live event business. all live events were cancelled in COVID. Various ways of dealing with that, which I won't bore you with. But one particular company that we'd been looking at for a while actually went into bankruptcy, Chapter 7, and ended up selling, quote, the assets of the company in a paddle auction run by a court in Atlanta. And this was in COVID. So my team and I, and another team that we were bidding against, actually had an online Zoom auction. For a company. For a company. Craziest thing I've ever been involved in. We actually ended up being the highest bidder.

55:02Wow. I won't bore you with all of the detail there. You won a company out of a Zoom auction. In a bankruptcy auction on Zoom, run out of the Georgia courts out of Atlanta. Now that was a company that we had on our radar for a while pre-COVID. We were very pleased to get it, But I will say that you don't buy anything out of bankruptcy court that doesn't have courts and issues. You have some work to do afterwards. Yeah, but you know, you walk into that knowing I'm not paying X multiple. But it was a crazy experience. It truly was a crazy experience where you're sitting in your home office, raising your paddle at X thousand dollars per time till the other side says we're out and you've won the auction.

55:45Wow, that's so funny. Yeah, don't do that is my advice. I was thinking about starting a whole business, an online business. You might get a home run every now and again, but there's a reason you're in bankruptcy court, okay? So that's the key learning. But no, that was the craziest one for me personally. Paul, this has been a great conversation. Thanks for taking the time helping me become a better M &A scientist. Thank you, thank you, and good luck. Hello, M &A scientists. You're listening this far. I love you, appreciate you. Thank you so much for just giving all the attention. I'd love to hear from you.

56:13I always appreciate feedback, criticism, so I get better at this. reach out to me on LinkedIn. Until next time, here's to the deal.

56:33Thank 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.

57:18Again, that's mascience.com. Here's to the deal.

57:32Views and opinions expressed on M &A 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.