Lessons from the Trenches: Mastering Tech M&A, Integration, and Carve-Out Strategies Part 2

24:32So now I look at the partner because it's partner is on the board. I call that venture fund. I was like, hey guys, I'm at Monga representing this company. What's up with this company? And the guy's like, do you want to buy it? I said, yeah, we want to buy it. So he's like, okay, so go and see the CEO. I said, As a matter of fact, I was there last week and they told us to get lost. Do you mind taking the flight again? It's like, yeah. He's like, you're going to fly into Barcelona. We're going to take that train to Madrid together. He made it happen. He's like, it's not your company. It's my company.

25:03So the guy was like fighting back. You know what? You've just shown to these guys that you actually are not a good fit for the company. So the VCs told us, come up with a IP transfer plan. And how are you going to run this company without this team? As in like a couple people. And that's it. So this would be the most kind of hostile. It's a private company. It's not like a hostile takeover of a public company, but it's like, and we're like, oops, okay, we got to put a plan together. And then you have to be very careful. Hopefully they're not sabotaging things. We had to sign very strict non-solicit.

25:35And then you're in a different country. So then you got to figure out like how North America is easy, right? You know, the US laws and Canadian laws, but like Europe, if they do something, what's going to happen? So you got to go through all those scenarios. But perfect example, investor said, go, I'm with you. I said, okay, please fly here. We'll go together. And unannounced, we walked in. He said, do not tell them you're coming. I'll come with you. I was like, are you telling me you offered them? And he said, they should have informed me about this meeting. He said, did you socialize a number with them?

26:09I said, yes. He says, what was their response? I said, they told us to get lost. Okay. He said, can you put that in an email for me? I said, email, we'll give you a non-binding offer. How about that? He's like, let's go. I gave him the non-binding offer, subject to, right? DD and so on. He said, all right, this is good enough for me to kind of move forward. I think a key piece was the cap table. Getting access to it gave you a full picture of who's running the show, who you need to influence, and almost like which order of people you should influence. And then our biggest risk assessment there was, how do we manage the key customers?

26:46because the key customers were in Europe. How do we make sure that these key customers don't go anywhere? The beauty is there weren't that many companies in this space. And for people to switch to a new technology was very hard. How do I get access to that cap table? Do I just ask one of the investors for it? No, you can't. I basically reached out to that VC because he was on the board. So I just said, hey, you're an investor in this company. We were thinking of acquiring it. So you've been in for nine years. Any investor, mainly a key investor that's a board member would be the one that would have access.

27:17In a lot of the cases, there could be shareholder agreements where they say that if an exit doesn't happen, it's X number of years, they have the ability to influence that outcome. So definitely, they do have some kind of an influence. And we took care of all the employees, by the way, and it was a severance and all that kind of stuff. Good outcome? Good outcome. Fully integrated. I don't know, this deal might turn out that way. Can you want to help me with it? Absolutely. Anytime. Anytime. Have you ever done a carve out from the buy side? Carve out from the buy side? Especially when something like proactive, when you have to shape the business case and champion it to get the board to approve it.

27:55Technically, no, I have not. I have unsuccessfully socialized that with big conglomerates multiple times. So it's all about unlocking value in that situation. That's what a carve out is all about. You are a corporate. you have a real business. Actually, there's a good example. You're in a trucking business. You basically are managing a very complicated fleet of vehicles, but you also have a proprietary software that you have built to basically run that operation. Can other people use that platform? But then in order for you to do that, you need to have a sales force to sell that scheduling software and lead management software.

28:39But if you're willing to do that, that's like pure unlocking of value in that company. Not a fleet example, but I have approached a couple big conglomerates back in the day saying that, have you thought of spinning this out unsuccessfully? And the reason has been they're so intertwined for them to say, okay, great, you can take this business out. But now where are you going to move the people? You almost like need some kind of urgency or motion already there to latch onto versus trying to champion it from scratch. I think the regulatory thing is always the trigger. Regulators will say, hey, you two guys are becoming fun.

29:19You need to sell this business. So then actually there's a full-blown exercise where you actually do have the consultants and they basically say, hey, this is what you need to run it as a standalone company. You can't use 25 % of Amit, who is the group CFO because Amazon is not moving with you. So now you need to hire a full person on this side. You can't model a 25 % of my time on that side. So someone has to build a brand new model with that. Then the next piece is technology infrastructure. Hopefully you are not intertwined. ERP systems, for example. If you're going to take over 100 people, now you got to have your own ERP system.

29:59You can't be part of this ERP system. You almost have to create a company from scratch. And I have seen carve-outs and spin-outs that have gone public as well. In Canada, actually, you need to show three years of historical financials in a prospectus. So what happens if you're carving out or spinning out? You literally have to recreate these kind of three historical years of financials as if they were running as a standalone company. It's almost look for indicators, consulting firms. I just think of one that would have conflicts that come up, conflicts of interest because they're doing audits or whatever on related to company.

30:37So finding those where there's going to be likeliness of a carve out, knowing that part of your business case is going to be building the missing pieces when you detach that company and all these fun TSAs and stuff. Yes. And you have to model those and also have buffers for things that you haven't thought of. You know, your costing of something around technology might be completely off because you won't have the scale to get the same price on this side. You almost have to create a standalone organization. How do I network in to find these deals? I got a list right now about 30 large companies that play in either fintech, legal tech, or some kind of enterprise collaboration.

31:16The large companies, these are 5 billion plus market cap that been around for 30 plus years. and in there is like, hey, strategy shifts or things like that. There could be some potential. And some of them just done massive merger of equals. And it's like, well, how do I start socializing this? And what's my approach? If they were organized enough and if they were disciplined enough, they should go through some kind of an annual or every two years or three years exercise where it's what's poor and what's not poor. Yeah. Or what are some of the orphan products that are worth just spinning out? thing.

31:50In that situation, they basically would buy a bankers. Oh, the CEO did go talk to that? CFOs, CFOs. How about CorpDev? You could talk to CorpDev guys, yeah. CFO CorpDev would be the two inbounds. It all depends because CorpDev sometimes, the reason I didn't say CorpDev right away was CorpDev is so focused on bringing stuff in. They're not focused on spinning things out. I feel like they're not the first to know about it, that's for sure. Exactly. They might have acquired a bunch of stuff. Now, as outcome of that exercise, they might say, hey, we may not need this. So I've also seen where there's been a merger, but we also know eight months out, there's going to be spin outs.

32:30And at that point, you should be ready with a check and with very efficient due diligence process and should be willing to pick up the assets for cheap because that's where you actually get stuff for cheap. I agree. The cheap part, because it's just a lot more work to do and the more risk to take. Not as many people willing to do that. What's my pitch to the corp dev or the CFO? That you're walking in with a fully financed deal. So a lot of times people have ideas, they want to buy it, and there's like subjective financing. Well, I'm still in discovery. This is my cold pitch. When I did hospitality banking, it was, do you have any hotels for sale?

33:04Question mark. No salutation, no signature. That was it. I used to email that out and have the highest conversion. Do you have any companies for sale? I don't think it would work here. What would it be? I think the way you do that is, I have access to capital. I'm looking to acquire companies with these metrics, this financial profile, and would love to chat with you if there is assets that fit that profile. Recurring revenue, gross margins, that easily able to carve out the customers and kind of go from there. And then say, this is not subject to financing, but of course, customary due diligence and so on.

33:39Being really upfront. Hey, I'm looking to buy businesses. Maybe compare some industry notes with you. And also in some cases, you can also work with the bankers and say, do you know someone here because I'm interested in this business? Because I don't think they're doing anything with that business. And it would be like, yeah, let me make that call and find out. I'm going to start paying a premium if I start tapping a banker to help put a deal together. The buy side banker should be acting on your behalf. So the buy side banker is already out there. Yeah. Engage with them, which isn't a big hit.

34:11You're going to pay some fees. You got to pay some fees. Yeah, exactly. The buy side bankers will always act on your behalf. Absolutely. I shouldn't be trying to increase the price. Yeah, exactly. Fair enough. So that's helpful in terms of getting that conversation going on a carve out. And if they got some ideas, you can really help finesse and build those and take those opportunities out. Also, negotiations, I feel like carve outs is going to be its own thing. For the most part, they probably just want cash out. But some of these other deals, when it goes back to dealing with the founder, You mentioned rolling over equity.

34:45Is it the same play of a little bit of finding out what they want, what they're trying to do? Yes. And what I'm trying to get at is for me, I'm always, I want to preserve cash. I can obviously reinvest in good areas within the company. If I can get 100 % owner financing, if I can get a big chunk on earn out or roll over equity or the combination of those three, I'd be pretty happy. How do you get to that, the optimal structure? Sure. Step one is, what does the core team want to do? Is the team motivated to move into a new company? I mean, we're talking about carve outs now, right? So you want to make sure...

35:19Let's play both because we'll do carve outs. And then let's go back to the traditional example, because I feel like that's more what I'm looking at now. But yeah, so carve out, you're a good question. Do they actually have a team that wants to move with the business? Exactly. Are they comfortable coming into a new environment? For example, a year ago, I actually visited a company in one of the cities here and I walked in like there is no way there's a cultural fit these guys are different the client I'm working with the personalities and the culture is not going to gel so I don't want to misrepresent what we're doing and all that so then I come back and say do you want are you comfortable running them as standalone as no it's really predicated on them working with this division so it's like I don't think that's going to happen so I told the company, listen, I think what you should be doing is you should be trying to raise capital and become an independent company rather than trying to become part of another conglomerate.

36:14That was my advice to the sell side banker. It's like, oh, I really appreciate it. Oh, by the way, do you know anyone who would be interested? I said, okay, happy to make those intros. So that was one scenario. And the second one you're saying is having these, how do you make sure that this team is comfortable in a company that you bring them into? Well, I'm just thinking like optimal structure. We're going through the negotiation and putting out the financial terms together because you always put this offer and let's say 10 million for a simple number. Hey, I'm going to give you 10 million for the business.

36:43That sounds great. But I want you to take one third as a financing term. I want you to put one third as an earn out and one third rollover equity. They will need to individually evaluate all these options in a combination and hopefully the sum of parts should be attractive. That's where this is the exercise. guys. It's easier if there are external investors. Forget your example, your bootstrap. You, there's no external investor. I'm a pain and ass seller. If I'm an external investor and this is my ninth year in this company and someone's offering me a hybrid deal. You want cash. I want as much cash as possible because I want to close my fund.

37:20Yeah. Front ended with as much cash as possible. I don't have the administrative bandwidth with to manage the options. If you're an investor, I'd rather give you cash and close the fund rather saying, here's the cash, by the way, but also there are options in this new company. We don't know when it's going to go public. If there's an investor piece, they would try to get as much upfront cash as possible. Let's say if it's a bootstrap, I would say I will need to sell them the vision of my company? And what is their path to liquidity once they get ownership in your company? I totally buy 60 % to 70 % growth rate and say, hey, I love Amit.

38:03And he was on that podcast and he said, you have the best product. This is great. That means a lot to me. But the problem is if I'm rolling in 50 % of my equity into deal room, when do I see the liquidity from the equity that I've actually rolled in into your company. So you will need to then share your plan with them. And usually the way it works is, and I've been through those scenarios where the guys have said, and there are pros and cons of that. Let's do an all cash deal. Okay, do the all cash, you get cash upfront. Or people say, let's do all stock deal because I'm going to go public in 18 months.

38:39And then you get the upside from there. But you can also have the downside. Not every stock is going to go up or down. When you're offering people stock in your company, you better be prepared to show them what is their next liquidity event based on the shares they have in your company. Because if you're saying, I'm never going to sell, it's like, whoa, then I might as well get all my money up front. Do you scenario that out and saying, hey, in three years, we're likely to have this liquidity event at this valuation? Yes, you definitely. You can sell the dream. You can sell the dream. You cannot sell it as an official offer.

39:12We're not signing off any forward-looking statements. Yeah, but you can say, hey, listen, hypothetically, this could be the value of the company. Even then, if I'm a seller, this should be like the gravy for me. I would like to kind of probably monetize as much as I can now. But at the same time, if the company is planning to go public in 12 to 18 months, and I'm acquiring the company, at that time, actually, the entrepreneur or the shareholders, they may have a call internally and say, hey, guys, maybe we should take stock in this company, because the upside is going to be huge for us. If you have near-term visibility, for example, in a company, when it comes to liquidity, then you have the flexibility to make that call.

39:55I like digging into their perspective and understanding what's going to be their driver and really how can you influence them. The more near-term options for liquidity, the easier it is for you to pitch equity and the stock in the company. That absolutely makes sense. Is there a certain window? as you're looking through three years, seems to be the right area. If you can show that in two years, there's going to be a liquidity. You would recap the business and be able to take them off. Exactly. It's an IPO candidate, for example. Frankly, like if you can get everything you want as a private company, I would stay private.

40:29Yeah, that's a good point. There are a lot of regulatory costs. There are, of course, significant pros to be public, but there are also cons to go public. This game of capital allocation. I'm running the bootstrap business now and we get a lot of interest to invest in the company and it changes the whole dynamic, right? Having a board right now, it's like true freedom. I can run around my shirt off screaming and nobody cares. But when you do that, I get a lot of inbound interest from all different types. You got the venture capital, you got small funds, the bigger funds that are trying to build early pipeline.

41:01And then you have, well, now they got these, anybody thinks they can wake up and start a fund or a search fund. But then now you see strategics actually doing these kind of minority investments, whether it's their corporate venture fund or just directly off the balance sheet. When is the right time? Because part of it is, hey, I find this opportunity, but we're still growing. And now all of a sudden, it's a little bit of a conflict of selling off some of the equity, rolling over some equity. You start changing that whole balance to do it. I feel like that's why I'm so cheap on looking at these deals.

41:31Just because I know, hey, for really to get the long term, I don't want to change that picture right now, especially in that run to get to 20 million AR. I'm a little bit sensitive about all the dilution you do. You can clearly see the impact it makes. If there's no urgency for you to take out cash, because in some cases there is that catalyst. What's that when you need the boat or the... Yeah, exactly. Or you really want to get that private jet kind of a thing. I do want the private jet, but I want the company to pay for the private jet. Yeah, exactly. And then you can do that right now. You may not be able to do that once you even have a minority shareholder because they will have veto rights on expenses that are...

42:12All right, so I have to acknowledge there's a lot of freedom to give up in doing this. Yeah. In your situation, whatever that number that you want to go after, $20 million or$50 million, and we all know that the moment you go beyond some of those ranges, the valuation premiums go up significantly. You have to make that call. You're still young. You're having a good time. if there's no urgency to take out cash, the only thing you have to think about is, is there a product out there that's going to make your product obsolete? Or you may lose market share. If that's the case, then you need to think about it.

42:48If you are comfortable that this company is going to continue to grow at least for X number of years, then have a good time and kind of go from there. Looks to me, it's a sticky business. You just continue to kind of add stuff. I actually would definitely think about doing acquisitions in other geographies just for fun because you've covered every city in North America. You want to start going to Paris and Stockholm and Oslo and Copenhagen to do some M &A science podcasts. I'll carry the equipment with you. There's definitely confidence on the organic growth. The dream is to do M &A. The dream is to build a business to a billion revenue.

43:28And it's primarily an M &A platform. And you see a lot of them out there in the public market. I think joking aside, from my perspective, you've got a very stable, solid platform now, like-minded CEOs, entrepreneurs. Hopefully they're bootstrapped because what you want to do is have that founder-to-founder chat with them kind of a thing. Give them some liquidity and then bring them part of your fold and say, listen, guys, together, now we are going to the next milestone. That's our$20 million ARR. Then you do the next acquisition. Say, guys, together as a family, now we're going to$50 million ARR.

44:02Then you kind of do your math and say, listen, we're hitting a billion dollars in enterprise value. And you socialize that with a couple of guys. And okay, then it's time to exit. And then you decide whether this is a full sale or whether you just want to retire or whether you... A couple of these acquisitions you did where you groomed some of the younger folks to take over from you and continue with your legacy, but you've also cashed out. That's the way I see it. So I should be focused on building a platform for entrepreneurs to grow. Yeah. Hey, there's this space. Yeah. We're on a platform together that's allowing us to take best of and continue fostering growth.

44:39Exactly. And the ability to share the best practices you have on your side. Accelerating value creation. It's your playbook. You start to build your playbook and see what you can cross out. That's right. Even the European company that we're looking at, we could take what we learned here in marketing and it's going to work wonders. I don't really believe in marketing over there, which is amazing. I don't know how these companies survive and thrive. But okay, that's what I'm going to do. I'm going to focus on platforms for entrepreneurs. I mean, you've worked on both buy and sell side. And thinking of the approach to each side, but even the risks that you're looking into, what are your big learnings from how do you sort of differentiate your focuses between the buy side and sell side?

45:20So start with buy side because you live with it. Sell side is kind of very transactional. You're a sell side banker. frankly you're working with the shareholders of that company that you're trying to sell and maximize value that's what you have to deliver actually our fees are dependent on basically a percentage of the actual sale price and obviously you hire a banker because their job is to actually identify buyers who basically will pay the premium price for it strategics might value you more because there's a certain aspect, cross-selling and all that kind of stuff. So there my job really is to make sure that if I have an engaged buyer, I basically deliver everything they are looking for and maximize value for the shareholders of the selling asset.

46:13Simple as that. In some cases, the guys, we constantly need to make sure is the offer that's coming to the table is a credible offer? Is it a funded offer? People would say, I'll pay this. But it's like, okay, how are you going to fund it? Well, it's subject to financing. I got to check whether these guys can raise capital or not. So in most of the cases, I want a fully financed deal. There you're really on the sell side, you're providing process support. Simple as that. And your ability to anticipate any challenges. This is too good to be true. Or if this is a potential buyer, do a quick check who their banks are, who are their funders and then challenge them and say, listen, I know you are doing this and you're saying it's a fully financed, but can we talk to someone just to give us a little bit of comfort level that this will happen?

47:02In some cases, they might say it's subject to approval by X, Y, and Z internally. Then you say, okay, I want to understand the process. Yeah. You know what? I understand the process. I want to whiteboard that process. You get the offer. We agree to move forward in principle. When are you going to convene the board meeting? What is the resolution going to look like? Who's going to allocate money from the balance sheet? Like all that good stuff. Does that impact any of your covenants with your existing facilities? That can happen in a very large acquisition. Oh, it's a$5 billion acquisition, but subject to we're going to have a debt facility and we're going to have subsequent bond offerings and things like that.

47:42But there's a lot of risks associated with it. So that's a sell side thing. But the buy side is actually more around making sure that post-acquisition, it actually delivers what it's supposed to deliver. So financial metrics given because that's Excel and that's how you basically agreed that you're going to buy the company. But is it going to align with the product roadmap? How are we going to cross sell this? Have we talked to people who are actually going to own this business unit? it. If one of our pieces was that we are actually going to cross sell this in Germany because the German clients don't have that product, what is our action plan?

48:22So there's much more detail because we own it. That actually keeps the buy side people awake at night. Now, if it's a completely standalone, non-integrated acquisition, you're a travel company globally, and you're just buying another travel company that is the Expedia of Europe, and they're just going to continue to run standalone. This is more just market share and stuff like that. It's different. But if this is something happening in North America, and it's going to be integrated with us, then you better have a good sense of how you're going to actually do it. That's why those things become a little bit more closer to home from that perspective.

49:00And you have to make sure that you have a good team that can do the integration, not to forget people just take for granted like the IT systems. The IT systems are so important. Do we have the right IT systems? If you're going to integrate, which ERP is going to go where? And those could be huge costs. Security, for example. Do we have the right kind of security framework? Because that could impact our insurances. So BuySite, in my opinion, had a lot of emphasis on post-acquisition issues and points. It's all about diligence. When you're on the sell side, you're doing a lot of diligence and your buyer is filtering out bad actors, pressure testing them to make sure they've got certainty they're going to get the deal done and be the right buyer.

49:44When it's on the buy side, then it's very specific to your strategy. What's the value you're trying to drive from the company? And that will probably help you prioritize where you're going to focus on. and you're really getting a lot more people involved because you're covering all the different aspects of the company from the people side to the IT and finances, etc. in different weights depending on the deal itself. Does that sound right? That's absolutely right. Absolutely. You nailed it. Surprises. I'm just curious. This is like where we try to have a little fun with this. You're smiling because I know you know this.

50:19What kind of surprises have you encountered? Buy side, sell side, diligence, integration. There was a period of non-compete and people quitting exactly on the day their non-compete had expired, for example, and things like that. The only one I've seen is where the acquisition just didn't make sense because the market shifted. You acquired a company because you thought you actually were going to cross-sell something, but then that market just disappeared all of a sudden. without going to specifics. You acquired an internet company because you thought you could cross-sell them content. And that just didn't happen because people just went to content somewhere else.

50:58And your whole thesis was based on cross-selling that. Do you see that as a reason to kill the deal? Well, the thing is the deal had to be written off at the end of the day. Oh, so the deal was done, but then you had to write off the whole value. Yeah, exactly. It became too strategic, if you will. Yeah. I mean, that was like, hey, we need this because we can cross-sell this. Because our market here is saturated. We need to acquire another company so that we can cross-sell them our product. And now let's pay them as if we are its cost of customer acquisition. Yeah, that's a not good integration surprise.

51:29And nothing like massively crazy. Because I would say the M &A over time has become also very sophisticated and more disciplined now. There were days back in the day, AOL, Time Warner, type of acquisitions. The more you see now today is there is a very well thought through rationale for doing things. You may pay to acquire AI talent. People said like, why would you pay 1.6 billion if that was a number for YouTube? Now look at the amount of ad revenues YouTube is generating. It's incredible. People said there were so many reasons not to do that deal. copyright infringements and how you're going to monetize the content how you're going to manage all the bad content how you're going to moderate that content there were so many reasons but they did it and then here we are and those are examples of deals that made sense but then you also had AOL Time Warner the best content company in the world selling and monetizing the internet for users but it just didn't happen but the world of M &A in the last two decades maybe that's a great way to summarize some of our conversation.

52:40I'm super impressed with how sophisticated the pieces are. I think it's great to see how M &A is actually a core function of a lot of the organizations. It might not be a corporate development department, but there is someone who probably is responsible to monitor acquisitions, to monitor targets. Even at the private equity level now, They're investing in having a resource in their fund to just monitor, for example, potential targets for their portfolio companies. It's becoming more and more sophisticated when it comes to dealing with different players across the table. People have investment banking background.

53:20People have product background. People have sales background. People have senior management. And there are some founders in some cases who are now running M &A for larger companies because they kind of understand how their product roadmap works. So it's good to kind of see that's how you see all these very diverse complementary skill sets that are representing M &A. Back in the day, it was, hey, you're a finance guy. You basically understand how to work spreadsheets, but it's definitely multidimensional now. Yeah, I think you're right. Just overall, I've seen it doing this podcast. Yes, you and I.

53:53First thing I mentioned about your background. Yes. You're seeing the M &A change. It's not, go to Ivy League school and become an investment banker. And it needs it. It definitely needs it because everything we talk about is all around putting diverse set of skills together. The best buy side M &A I did was one of the companies, the internal team was myself working with the CTO and head of product. With the CTO, I said, put the product roadmap and show me where the gaps are and we'll do buy versus build. scenarios. And then we just executed on that. That's pretty cool. Here you are. All of them were non-finance people.

54:30I would consider myself as a finance person, given all the M &A I've done, but basically my core team was non-finance. So I like that because it really helps you focus on what's going to really drive value and solving. And the buy-in as well. After you acquire, it basically fits in their product roadmap. Those are the ones that are going to have to lead integration, but at least the key elements that's going to trade value. We talked a lot about different strategies, but have you seen this trending otherwise since you've been in the field? I think like the 80s, you know, the big takeover, it's all break the big sum of the pieces or pure cash flow and that's it.

55:05Like things are really changing. I think things are becoming more and more strategic. Things are becoming way more aligned with corporate strategy. Of course, there are one-offs all the time. There will be triggers. There is a breakup of a big conglomerate. This piece is for sale. Are you interested? But I find in majority of the M &A strategies we're seeing that Corp Dev teams are very aligned in terms of what is their short-term, medium-term, long-term strategy. This is our growth plan. This is our organic strategy. This is our inorganic piece. Let's see how we can execute it. I'm very impressed with the companies that are doing well or have a very good handle on their corp dev initiatives and a lot of those guys are for example on mna science that you talk to you can relate to a lot of that because they're very organized the paypals of the world and the booking example card for example they know what pieces they want and they're not shy to sometimes take that risk this is a great functionality would love to kind of offer that to our existing clients because otherwise they're going somewhere else They're making those bets.

56:15The second thing that I'm seeing is slowly people who have money on their balance sheet, they have strong balance sheets, they're willing to do minority stakes in the targets, potential targets. Pros and cons, obviously. Cons for the people who are taking the money is like, hopefully they don't become tied to this company now. Hopefully they can still have the flexibility to sell it to someone. But I'm finding more and more the banks are interested in investing in companies in fintechs or companies like Salesforce, companies like Microsoft, companies like Google. They have their own venture funds and they are taking positions in these companies.

56:55Companies like Thomson and Reuters, for example, have a venture capital arm. They basically are identifying opportunities that they might not be a target today because venture capital too early to buy. But hey, I can invest 10 million, 20 million, 30 million, not a big number for that big company. But I get to be part of the upside and hopefully they can benefit from this partnership. So M &A is like back in the day, the 80s and the 90s was very transactional. If you said M &A, it's like you and I wearing suits, boom, Hermes ties, boom, white shirt transaction. M &A now is like building relationships, multi-pronged approach, being part of, of course, you're still doing transactions, but also engaging with the innovation ecosystem.

57:41And eventually they may acquire the company. It's much more kind of less transactional now. Yeah, it's like you're looking at strategies from different angles, taking bets against them as well. Exactly. That's my big takeaway today. Don't be too opportunistic and much of a bargain hunter. You got to keep your strategy focused. And think like medium term, long term, having a shareholder value. But at the same time, if someone puts a deal in front of you, be ready to act on it. And that's where the stuff you and I talked about, the playbook comes handy. The muscle memory comes handy. The ability to pull together that team comes handy and go from there.

58:20But one important thing I got to ask you, what's the craziest thing you've seen in M &A? Another interesting story is where at the height of the dot-com bubble, and that's not my personal deal, so I will not take credit for that, but I've heard the story and it is a true story. Someone offered a price and we're talking about bubble valuations. The lawyers were sending the fax, the terminal fax, to a wrong fax machine. So when the seller or the target didn't respond for two hours, they thought that they had offended them and sent another fax with a premium of another 10-20 % to it. But it was just going to a wrong fax number.

59:03So in the end, they ended up paying 70 % more than what they were supposed to because they thought the other person was saying like, I'm offended by this offer. Anyways, that's another story where... That's crazy. That is the craziest story ever. And it comes from a very credible person. And he tells me that story all the time as a mentor. And he's like, Amit, it was just going to a wrong fax machine. You know, like how you are like, you do these agreements and you put this generic fax number, which could be your head office somewhere. But you're expecting the fax to come to the CEO's personal fax machine because it's confidential.

59:42And for some reason, this was not being sent to that number because an associate somewhere basically said, okay, this is going, this is the number. So in the morning, they said, hey, where is the offer? He said, oh, we have sent it and this is the number. And the guy's like, oh, yeah, there must be some problem with the fax machine. Why don't you send it to this fax machine? Signed it right away. Wow. This has been a fun conversation. Thank you so much for taking the time helping me become a better M &A scientist. You're doing an amazing job. I'm learning so much also from your podcast. And most importantly, I was able to get you a wonderful weather in Toronto for this trip.

1:00:20Made it happen. I cannot believe that was the case. But anyways, a lot of fun. Made it happen. You're the tipping point. I kept threatening to come to Toronto this year and you were the tipping point to actually make it happen. So thank you for doing that. Fellow M &A scientists, if you've made it through this interview, I appreciate you. Love to hear it from you. Reach out to me. Tell me what you thought of this interview. Any feedback. I welcome the criticism. I'm trying to get good at doing this. Until next time, here's to the deal.

1:00:59Thank 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.

1:01:44Again, that's mascience.com. Here's to the deal.

1:01:57views 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 education