Mastering Carve-Out Transactions with Keith Crawford

23:47And they haven't outsourced it or sold it. There are a handful. I'd say a little more than a handful. And we know we visit them when we go into their jurisdiction or the geography. We're there with them and we're trying to tell them that your service would be better. It would reduce your costs and your service enhancement would be better if you actually decided to carve that business out and sell it to us. And I would say there's a lot of interest in those discussions. But even though carve outs are hard for buyers, they're just as hard for sellers as well, because they need to augment and change their business.

24:18and that's not an easy thing to do. They sometimes adhere to the status quo before they actually say, this is a good idea because this is a non-core capability or business that we provide. It's a bit of a back and forth and a dialogue that we've had with banks over the years. Can you explain like custody business to me? We consider to be kind of an institutional. We're an institutional bank player. We're a bank, we're a charter bank, but you can't go on the street and find an ATM and take money out of State Street. So we don't essentially touch retail. We don't touch retail players. You can't open a bank account with State Street unless you're an institution or a sovereign wealth fund.

24:56So we move money behind the scenes. So when a sovereign wealth fund wants to manage their fund and execute trades, we facilitate the trades for them. We facilitate the reporting. We facilitate the investment and the evaluation, which is the administration, the accounting as well. And we custody the assets through our global network that we have around the world. So if they're trading Japanese equities and they're in Germany, we can handle it with the infrastructure that we have built. You move the big bucks. We touch a lot of money, as does Bank of New York every day. So this is a business that you really focus on.

25:29And when you look at it as a strategy for your carve-out that you identified is that there's these other banks that it's essentially their side business. And then that's where you have this thesis that you've been operating on this for a while. You sound like you've done a number of these deals. The biggest kind of impetus for the firms to actually consider carving out their businesses were very technology reliant. As you could imagine, moving that much money and custodying assets and performing administration and accounting on portfolios and accounts. We actually require a lot of regulatory requirements that happen in terms of jurisdictionally.

26:07As we all know, the regulatory environment, it doesn't sit still. It's constantly moving. It's constantly changing. And if you have new regulatory requirements for your underlying portfolios, your clients, or whatever it might be, that requires a change to your technology. You have to upgrade your technology or augment the technology so that it can actually provide the service at the standards in which the regulators require. That's a big sell point for us to say, yeah, you may be doing okay right now, but you constantly have to upgrade this non-core part of your system to meet the regulatory requirements.

26:39And you don't really have the critical maps. Were you part of shaping the strategy or is this something that was already existent when you joined State Street? Well, I think it was there. It was implied. I wouldn't say I was an architect of it, but with the key executives in the custody security services business that we operate, we constantly work together and coordinate with each other in terms of what's the angle? How do we help other firms? How do we help other customers? A lot of it comes from word of mouth as well. Like certain clients find out that we're providing certain capabilities to somebody that they know and we get a referral in.

27:12But I'd say we're fairly versed in terms of what the opportunities are on a global level. And we try to focus on areas that we think we can execute on at a high level and a high scale. What I'm trying to get to is like step one is having a clearly defined strategy. What I'm getting is you're not knocking on doors saying, hey, got anything to carve out. It doesn't work that way. Or does it? We do. We do. We knock on doors. But can you knock on doors and just ask, hey, you guys got anything for sale? Are you looking to carve out? Well, we know their business ahead of time, right? We're not just saying if it's any for sale.

27:42You have it. And that's what I'm getting at. You have the strategy that you've shaped, which is essentially why us. We've already got expertise in this. We're able to make the regulatory overhead a lot more efficient, just overall efficiency in operating the business and the benefits for them, I guess, selling the business as well. That's absolutely right. We understand what they're performing in-house. And because they're, in most instances, not all, but in most instances, they're large universal banks. Universal banks have a ton of divisions, ton of services, ton of products, capabilities. We just believe that we can do it more efficient and scalable for them.

28:18And that's something that we can take off their hands. It's not really front-facing. They're not touching the institutional clients. And if it's a service that they can outsource and have a steady rate and a high level of service, that's something that they're interested in. Do you think that's a must have to have an angle that you approach these firms versus just knocking on doors saying, hey, I'm looking for businesses you want to carve out? We have to be very concise. Otherwise, I just don't think we'll get there. And even when we are concise, it does take time. As I said earlier, carving out a business is not an easy thing for a seller to do.

28:50It's a lot of work. Even selling a business in your portfolio is a lot of work, even if it's on its own and it's segregated. So buying is actually, buying is less comprehensive than selling. Because selling, you have to know every single little thing. It is an extensive process. Especially to get them to want to do this without running a process. Or it's sort of on you proactively engaging them to want to do this deal. That's right. Okay, so step one, strategy. get the angle down. What's step two? Yeah. So step two would be in terms of what's the initial price range, valuation range. You got to get them interested.

29:30What can we do? How can we help you? So you have the strategy. It could be worth this. Do we got to talk to like identify the right banks and like the right people to talk to? Yeah. But through our conversations with the, with my conversations with the business leaders and the network that we have globally. In most instances, even when I said this in a prior discussion, but when I was the CFO at the Asset Management Group, which is now called State Street Investment Management, it used to be SSGA. Anywhere I went in the world in terms of meeting with my teams, I could call up a competing asset manager and say, hey, do you want to have meat?

30:11Do you want to have coffee? Do you want lunch? It was an easy thing. And I did it. I did it a lot. And the team does it a lot as well in terms of... We're in the top five in terms of assets under management globally. It's a big ticket. And those are doors. And you need to be outwardly looking. And I would say 85 % of the conversations probably don't continue. But then there's that 15 in there. And I wouldn't say the 15 are successful because we all know M &A is hard to do. But those are 15 that are in that area of sourcing of, okay, they're interesting. Is it the right time? Is this where we want to be?

30:44How high is it on our priority scale? If you want to talk about this with proactive deal sourcing, you've got to work your butt off. There's no shortcuts. But I would say, fortunately for us, we're narrow in terms of what we do. So asset management and investment services, we're now moving into wealth. Someone like, I'd say, JP Morgan, who's corporate advisory, there's a lot of businesses in there for them to figure out, okay, how am I going to make this grow? We're very, I wouldn't say narrow, but we're very concentrated in terms of where we play. So it's actually easier from that perspective.

31:17But we did enter the fintech world with the CRD transaction. That is the Wild West. That's not an easy market to get your arms around and understand who all the players are. Because as we all know, maybe they'll know, but in fintech, what I find is most of the firms that were created were all created for sort of one reason, and then they developed thereafter. So any fintech firm that you look at, They're not in categories. They're not homogeneous. They might do the same thing, but then they started or they developed into something different. So it's a really, I think it's a really fragmented space.

31:52And it's just one that you really got to spend a lot of time on to understand where the opportunities are. The benefits of having a clearly defined angle strategy. So that way, it's easier to see what targets fit. And it sounds like the big step is having the conversations. It helps to have a big company logo. It does. It definitely helps. to have a big company, a global company. That's a plus. Is there certain titles that you want to talk to to really make a deal actionable? Absolutely. Particularly in the custody space, what you want to do is you want to speak to the individual. They're in charge of the custody business or the security services business, but they're not in the business.

32:29So if you go to the head of the security services business, we always say it's like inviting the turkey to Christmas. You don't want to go and talk to the head of the business and say, hey, we want to buy you. Their first reaction is, I'm running this division or I'm running this part of the company. I'm being successful. If I get bought out, there's a chance I won't have my job, which in most instances is not the case because we acquire talent along with it. We're not all about just eliminating headcount. That's not the point. It's about scaling. And if you look through our organization, some of the people in the senior management level and the executive level were part of past acquisitions.

33:05So we bring in quality talent as well as part of it. But you can't initiate the conversation with that individual day one. So you have to go above the head of the security services business and put that idea, that thought in and why they should do it. So that's the target point. Okay. So let's say I'm taking this as free advice and coaching from you. I'm going to go do a carve out. And for me, it would make total sense to look at these large companies that have some kind of data room business. So I know like S &P Global, Thomson Reuters, they have these sort of legacy data rooms that are underperforming.

33:37where you're telling me, I don't want to go directly to the business unit leader. I don't think that's a good start. I did try this. Actually, it was like they didn't want to have the conversation. Yeah. So I would go above them. They feel like it's just so blurry in these large organizations. It is. It is. And like I said, all companies are different. That's where I tap into the investment banking knowledge. I have a very wide and extensive network of financial advisors, investment banks, large bracket banks, all the way down to the tier three banks. however you want to evaluate them. And I do find depending on what level that you're going on, large banks sometimes don't have the contacts that the next tier down has because the next tier down has to, they really have to go out there and beat the street for their transactions.

34:22Whereas the large ones, they're going to be on one side of the transaction or another if it's a sizable transaction. And so they don't have as much networking and contacts into these kind of carve-out type opportunities, which is why we utilize some of the mid-tier investment banks because they actually know the individuals almost personally in a lot of cases. You could engage. So it's good to have a network of bankers and you can say, hey, Bob at Greenhill or whoever, I'm interested in this company. I know that's got this business. Can you help me? And they might know something already. They might know who to talk to.

34:54And then when you bring them in, are they engaging with you as buy-side representation then? They aren't necessarily depending. So look, bankers are critical. They all need to be on transactions and they need to be on successful transactions. We're open. We're agnostic to the bankers out there. And my position throughout my career is if you bring a transaction exclusively to State Street and we execute on it, you will be on that transaction. And I've held firm on that. And that's been consistent. I haven't reached that in my career, but it's really just an introduction to get it at first. And the bankers are more than happy to do it.

35:29It's light work for them at that point in time. and it might be a referral back to them if we actually do go with the transaction. In some cases, they could help you make the deal actionable if they already... Yeah, absolutely. In a lot of cases, I would say they end up on the other side. In this example, you're still buyer led, you're still practically sourcing, you're still doing this, but they're still using this extended network with the bankers and playing nice and working with them. They can get the leverage and increase the opportunity of making the deal actionable. It's still a win for you.

35:56Yeah. Okay. So we get the combos, we get the opportunity where, hey, there's something potential here. I like your story. I like the why us and why this business case makes sense to do this carve out. Where do you go from there? It's a sign an NDA. They assimilate their information for the preliminary bid. They give us their the core financials of the business. In some instances, we require to go hire one of the big four or another accounting firm to actually do a quality of earnings analysis, which actually takes the carve out and the accountants go in there and And they go through every part of the business that they know of.

36:30And they try to build a perimeter carve-out P &L and balance sheet. And that's utilized for the preliminary information of which we put our preliminary bid on. You've got an NDA signed. Then you have a preliminary request list that you'll ask for information. But you'll also do this buy-side Q of E before putting an LOI. It'll be a sell-side Q of E. So if they really want to carve it out, we recommend to them that they do a Q of E. Oh, so you tell them to do it. Yeah. Okay. Which is pretty common practice if they're going to go bank. It is if they've decided they want to sell the business. If they don't want to sell the business or they're still on the fence about it, sometimes they won't and they'll give you preliminary information.

37:07That's interesting. So if they are pretty inclined, like they're motivated to do it, they'll do it. If not, they just give you preliminary information. What's your sense between the two if they do a QOV versus they don't? They do a QOV, it's within the ballpark of accuracy. If they don't, it could be wrong. It could be grossly wrong when you get in and you do due diligence and then you self-insure the deal you require and do quality of earnings on self-insurance that the underwriters require you to do that. You go in there and you find out there's mistakes or there's costs that they didn't include or there's revenue that's overstated.

37:42So that tends to happen. We'll do it quickly and swiftly, but our level of risk assessment is much higher for those types of transactions than a QAV. More likely to get surprises where you end up having to go back and renegotiate. That's been my experience. This is a great walkthrough on how to source deals. Let's talk about your approach around mapping out the dependencies, creating a unified process across your teams when you actually go and do diligence on this company. We've been a successful acquirer over the years and acquisitions for us. It's not a strategy. It's to enhance our strategy.

38:18We're pretty astute about that. We do think creatively in how we go through this, But when we do get into the M &A environment, we have a core team. It's built off the historical success of what we do and what we want to augment over time and how prior transactions have been successful or not successful. And we try to augment it. But like I said, we bring in a core team and we're pretty detailed up front in terms of the areas of focus and risk to start. Now, again, 20 % of that is whiteboard again. I was going to say, how do you deal with that? Yeah. So if we're looking at a transaction in another country, we've got to talk about country risk.

38:56Is there currency risk? Is there net interest income risk? Because the interest rates are either tremendously lower than where we are at the home office or they're higher. These are the types of things that we try to identify up that's driving that initial valuation model. And that's where we tend to focus the teams in terms of getting in there early on in the process to really confirm those points. So the material assumptions are where we focus initially in diligence. But when you go on, like my example, my tiny little carve out I'm doing, there's all these little things that keep popping up that drive me crazy.

39:32How do you keep the smooth cadence going? You've got to be agile. It's never going to stop. You're never going to encapsulate a transaction upfront and have it be consistent with no surprises all the way up to the signing. And even some instances, the closing, which you don't want. But you have to be ready. You have to be on. There's always last minute things that happen and there's always last minute surprises. And that's why the deal team needs to be present, available around the clock, because these do come up in very tight timeline frames in terms of where you're going to print or you're actually going to sign on the transaction and you find these things out.

40:07So you've got to have the team ready to triage right away and try to resolve that to get to that next phase. Is there any tactics or approaches to soothe that over? It's about knowledge and really being inquisitive and intuitive while you're going through it. It doesn't avoid all of it. But if you think that the agreements are there, we're settled, everything's working out, there is handoff things that are required. Even just wire transferring money is a big deal between the signing and the closing. If it's got to go to different accounts, different jurisdictions, that stuff does take time. You got to do preparation.

40:40You just can't take that and think it's going to happen within a matter of hours. You've got to spend the time to prep for it. So it's being thorough for everything that's required for signing conditions or even closing conditions. Get in early, be very inquisitive. I feel like some of these are just reps you do over time. You know what are the key things that you don't want to get surprised with. Yeah, and constant check-in. If you don't hear something, check in anyway. Is there like a cadence you found that works really well? I'm doing like a weekly right now. Is that the right amount? Should be more or less?

41:10It depends on the type of transaction that you're on and the complexity of the transaction. And so if it's complex, I'd say two times a week, the team should get together. In many cases, you're canceling the meeting. When we're trying to get to a signing, sometimes on transactions, we actually have a nightly meeting at the end of the day. Are we still on track? What's popped up? Are there any changes? And in many cases, there are. Oh, we've got some more information on this. We've got to deal with this. And then that's when you triage the team to get together. So yeah, I would say it's better to overschedule meetings and call them if there's not anything there.

41:44It's a good check-in and it forces people to be transparent because a lot of times when you're not connected or people aren't showing up, things can happen. And look, we're a global company, so you've got to be connected. We're not all sitting in the same floor, in the same room, or in the same office. A lot of times it's multi-offices and it's multi-jurisdictional. I'm sure people are happier with cancel meetings than surprise meetings that show up at the kill. Exactly. So I like that. That might be a good thing I'm going to take in is just increase the cadence and then play it by ear if we need them.

42:14And like you said, there's parts of the deal that you're just going to need to do a high frequency of check-ins. Going back to that example with the international bank, what are some of the things that we can talk through that went wrong and how may have changed your buyer letter approach? There's a lot of components that need to be finalized. One of the international banks, there was a component, as I mentioned, we couldn't cover. We needed to actually create a greenfield or they needed to transfer over that capability. In the security services business, when we go to a lot of these banks, they have their own asset management group.

42:46And their asset management group, they're doing the security services, the custody, the fund administration, the fund accounting for their own in-house asset manager. it's segregated for regulatory purposes. However, when they spin it out, you've got to create a commercial contract between our business and that asset manager. So that's one of the clients that's going to come along. And in many instances, the clients are up to 50 % of the revenue. They could be more, but up to 50%. And the critical aspect of that is, what are the terms going forward? So when we talked earlier about third-party contracts and making sure that they're not going to increase the fee 20 % to 50%.

43:25It's the same thing that we have to do on the captive. I think the captive asset manager, of course, they're realizing they're entering into an agreement with a third party now. And now they're thinking, okay, we're going to reduce our fees. And then you've got the top of the house within the bank that's saying, no, we want the highest price possible. So we're going to sell this contract going forward. And when you talk to asset managers, they are, they're fiduciaries. So a lot of times they will fight their own parent company in terms of where they think fees should provide. That's a very delicate situation that you have to deal with when you have a large captive client.

44:01How do you change your approach overall? We asked the seller early on in the process that we'd like to meet the asset management team. Who's ever deciding this going forward? We want them integrated. There have been instances in my past where transactions have terminated because they didn't want to bring the asset management team. They promised that the fees that we were going to get would be the fees and they ended up not being the fees because the asset manager rebelled. Oh, wow. So it goes back to that theme of just early and being inquisitive. Yeah. And I'll never forget. At one point, it was back in maybe 2000 and I'm dating myself, but 2005, I had a good friend.

44:40He was a banker. He's a good friend of mine still, but he was working on the transaction with us. And he called me. I was sitting at dinner before I was going back to my hotel. And he said, we have a problem. And I said, what's the problem? And he said, we just lost$25 million of EBITDA. And I said, why? And he said, the asset manager repriced, they came in the fees they want. It's a material change to$25 million of EBITDA at maybe 8 to 12 times. Wow. That kills the deal. Yeah. When you make these deals successful, it's all hinges around this integration. You gave me really good examples of stuff you absolutely want to avoid post-close.

45:15What's your planning process look like to create your 100-day integration plan? On the large transactions, we do seek third-party outside help. So we'll go to the consultants out there who have program management expertise and capability. And we bring them in actually earlier, like probably just prior to signing. We'll bring them in, we'll engage with them. And from between signing and closing, and we build in a fairly rigorous plan. And as we said before, that's when the meeting cadence gets set up. And that's where we work through a lot of the issues to ensure that synergies arrive on time, the closing.

45:51And you mentioned employees earlier before. The other thing that's key is day one. You want the employees to feel like they're part of our company, State Street. That's a lot of planning that has to happen with the HR folks and with the operations and IT folks because you want them to have segregated. It's required. They need to have their own email with State Street at the end of it, and they need to be in a secure space. So that's a lot of planning that has to happen when you're doing a carve-out because a lot of times, the seller doesn't want you in their facilities, so you got to find new facilities, but you don't want to move the employees too far away because that disrupts their work-life balance.

46:27So that's some of the critical stuff you really need to think about that some people don't think is that big of an issue, and it does become an issue. I think early on doing some of these deals, it makes sense to lean in on some consultants to help out. The other big thing, I always think of integration, biggest risk is the people. Things go bad. People walk away. Culture alignment is a big part of it. If you nail it, people will be staying motivated and happy. If not, they're terrified and they run away. How do you make that work? Like, how do you... Is there any success secrets there? There's a lot of thought that goes into that.

46:58I would say dating back all the way to CRD when we bought Charles River. They were a very successful business, software business. They were very proud in terms of what they did, but they were very creative. And that's not so much equivalent to what a banking structure is. So we took steps throughout that integration to make sure that we didn't destroy the culture there and the creativity. And it was unique. It was different. They kept their old email. We didn't immediately transfer them to State Street. We wanted them to feel like they were a division of State Street, but they still had that identity.

47:33And they still do to this day. So it's been one of these things where you've got to think about how you preserve the culture and you preserve the morale in terms of where the employees want to be so that they're continuing to be successful when we own it just as well as they were prior to owning it. So that and then also retention. You want retention of employees and that's critical. And that's a big part of the due diligence process as well. All the way to the integration is making sure that you're incentivizing and ensuring that those critical employees are going to be there, not just day one when you close the transaction, but beyond that.

48:07So in this example, you acknowledge the cultural differences and actually modified your integration plan with that North Star goal of having a high retention. That's correct. And we maintain their facility and their facilities outside of Boston. It's probably a little bit more integrated today, but that facility is still there. And when you go there, the brand name's there. It's still there. And we've maintained the culture and the success of the business. Pretty cool. How do you approach estimating carve-out costs? Again, it's bespoke to the actual transaction that you're looking at. And then I would say, going back to the non-binding letter of intent, however you want to call it, the bid, you have to have assumptions in there as to what you think the ongoing costs are.

48:52And that's third party operations, compensation and the like. I would say there are other extra costs that are outside of that zone. And those costs are your deal fees, your legal fees, your transition costs, starting stuff, creating stuff, travel. So you should have a general range based on past transactions. So you should be able to just take an estimate and start to map it out. For large publicly traded organizations, it's not a great thing. and it's becoming scrutinized more and more by investors and shareholders is they exclude deal fees or one-time fees out of transactions. You have that liberty, but it's a double-edged sword.

49:34You got to be careful. It's not something you can use all the time. But in reality, when shareholders and investors are looking at your growth rate and your return, and they know that those deal costs or those deal fees aren't going to happen in the next two to five years, because they only happen when you close the transaction. Those should legitimately be taken out of the runway. So those costs can fit in that bucket, but you got to be careful and you got to adhere to what the requirements are under the accounting rules. But those are the areas that you focus on. It's really hard and you got to know what the migration is.

50:05How do you get clients on board? What's it take to repaper clients? And the other critical aspect is when we go in, one of the first things that I think our legal team looks at are the contracts. do they have a change of control provision? So if it's a share deal, in a lot of cases, you don't need to go and get consent from each client, which is great. Reduces your legal costs, your tracking costs. So it does vary by transaction and you should be able to estimate it based on your past deals. But again, it's got to be a range. I want to break this down because this is an interesting one that is pretty critical.

50:40So if it's a share deal, you're taking over entity, purchasing the shares. In most instances, There are jurisdictions and requirements where you still need to get it. But I would say for the most part, yes. And then your agreements stay intact because there technically isn't... There isn't a change of control in the sense that you are... You're going to have to have them sign a new contract, basically. Yeah. And some of them, you don't have to sign a new contract. And that's another thing that's critical. We didn't talk about as well as understanding the client composition. Because if it's very concentrated, then what you want to do is...

51:11It's the 80-20 rule. You want to focus on the large clients that are providing most of your revenue. And then you have the small tail of clients. But what we find in our industry, and probably happens in most others, is clients don't usually walk. They wait around to see. And then you need to look at the repricing ability of the clients in the contracts as well. Because a lot of them, they don't have the ability to reprice. Fortunately for some of our businesses, to move off of the platform that we're acquiring, it's disruptive for the client. That's a retention component as well. You want it all to go smoothly.

51:46That's where we're at. And you just need to make sure that you're thinking about the retention, what the legal requirements are, and the work that needs to be done. I did a transaction just recently where we tried to sell a business within our company. And we got all the way to the end and the clients didn't want it. It was a small business, but the client didn't want to do the conversion of the contracts. They had to go get positive consent from every single client. And we do that all the time. So I was surprised by, yeah, we're not interested. We don't want to do that transition. That's why I was curious about this stuff, because I feel like it happens post-LOI, then you find out all these contracts have changed control provision, and then it becomes a lot messier to work through.

52:24And to me, I chalk that up to them not having a formalized expert deal team because everything went sequentially. And that's not having somebody on the integration side or on the legal side that says, how are we going to get these clients on board? They didn't think about that until the end. And we were just assuming that they understood that all the way through. Can we recap? What are the major deal breakers that would cause you to walk away from a carve-out during the process? Uncertainty on the perimeter is the first one. The second one, I would say employees in scope. You absolutely need to know who's going to be there day one.

53:03So you can perform the services that are required day one. You can't slip up or be deficient on that. How do you differentiate that between when you say uncertainty on perimeter? So uncertainty on perimeter in terms of services. So I'm not thinking individuals. So this could go to, I'm getting a feed from this area. I'm getting a feed from that area. It doesn't involve an employee, but it's critical information that's needed to perform the services. So this is the broader business versus the actual operational employees in scope. That's correct. What you're buying at the end of the day. Yes. If you can't define what you're buying.

53:37And you can't perform the service because you forgot about it. And we didn't transition it over or build an interface to ensure that was showing up. That sounds like the hardest part of doing these car routes. It is. And that's why our team needs to be augmented with the right people who really know their stuff and really know how the process works. Where does the future look like? Are you going to see more car routes in the future? Less? We're always looking inward out. And we've been focused on growing the business and actually trying to do this the right way. And we help out even on the organic side, internally with the investment side, when things aren't happening from an M &A perspective, or we're terribly swamped in the pipeline.

54:17But it is a concerted effort. We wear different hats and we try to think creatively. Look, an acquisition is hard to do. I said it earlier, it's not part of our strategy. It's to help our strategy. And if they think we can get there quicker, it's something that we're interested in. But we're not out there just to acquire for the sake of acquiring. We're a fairly global, established, quality provider to our clients globally. And we're focused on keeping shareholders happy, but also making sure that we're building a long-term approach. Optimistic. Hard to do, but still optimistic that more to come.

54:50I got to ask, what's the craziest thing you've seen in M &A? When I talked earlier about having that asset manager who's a captive, who's going to become a major client, you need to commercialize the arrangement with them. We were down to the wire on a certain transaction outside of the US. The head of the asset manager caught pneumonia. And I didn't know this until my deal counterpart called me and said, we need to have a meeting. And I showed up with the head of Europe and myself and said, OK, it was a meeting. We show up to a different building and we walk into the building. And when we walk in, there's this big video screen.

55:26And he said, sit down. So we sat down and then the screen lit up and a gentleman with an IV in his arm and a hospital smock walks in and sits down in a chair and proceeds to tell us that he's not going to agree to the price that we agreed on in the underlying valuation. He's in the hospital telling us. us. And then to top it off, this was probably 15 years ago, there was a delay in this. Remember when we said delays, there was a delay. So we would speak and he would start speaking before we would finish. And it just went back and forth. It was crazy. Nevertheless, we got the message and then the triage through the night, all night negotiations to try to figure it out because the parent company saying we want to get the deal done.

56:11Yet this gentleman's in the hospital. We We were down to the wire. We ultimately got there, but that was a pretty crazy story. Sitting at dinner the next day with my colleague saying, that was strange. Nick Gauchet from the ER. Keith, this has been a great conversation. I appreciate you taking the time from doing deals. Thanks for having me. Helping me become a better M &A scientist. For those of you that have been tuning in live, hey, love to hear from you. Love the feedback. If you reach out to me on LinkedIn, like topic ideas. I appreciate you joining us. Here's to the deal.

56:53Thank 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.

57:38Again, that's mascience.com. Here's to the deal. Thank you.