Mastering M&A Success with Transparent Leadership and Strategic Agility

24:04As I said, the first couple of deals were primarily tuck-ins, which was more around making the existing core with Strendon. But from then on, it has actually been the same strategy. Identify a company with a great set of products that have a great set of customers. Great set of products means what? It's a wonderful product in a good market. Great set of customers means what? customers who recognize its value and therefore stay with you. Do they renew the product? Do they continue to stay with you? What is the average lifetime of a customer? Are you seeing churn? So those are some of the things.

24:36And then in the end, the financial metrics make sense. It's all backed by people and culture of the company you acquire. Now we've seen all this buzz around AI. And I feel like every company has, even the recent sentence I got by a company is AI into it. I feel like everybody's pivoting, AI's core. Or how do you view that? Because these are big companies that are turning into the dime and they're doing acquisitions related to AI. They're actively spending a ton of money in R &D to revamp products with AI functionality. How do you think through this? The buzz around AI is amazing right now. And I think it is there for making people talk more about what they are doing with AI and also do more.

25:14As I mentioned, the very first company we acquired in 2017 was an AI company, AI machine learning company. We have always believed, I've always believed, that the world was going to move to AI. And it has been moving to AI in different aspects along the way. Of course, as we know, 18 months ago, we had this whole generative AI for text come about with ChatGPT. And I think it exposed the power of that aspect of AI, generative AI to the whole world in a very easy to use way. That got really the excitement going in that space. We have over the last several years, and especially in the last 18 months or so, also made tremendous investments in AI.

25:53Our last acquisition, actually, MarkLogic is a data platform. It's a database product that supports unstructured data. And MarkLogic itself had acquired a company called Semaphore, which does semantic analysis on text. So between those two, the MarkLogic products combined with our data connectivity and our intelligent decisioning products, we have created this new offering called the Progress Data Platform. And the Progress Data Platform is all about responsible AI in a mission-critical, secure, reliable business environment so that you don't get hallucinations, so that you don't get random answers.

26:29So they are repeatable. Then the answers are provided along with the context, along with where does the information come from which this answer is derived, which is really important for business to be able to make sure that it is based on something that is reliable. For example, if you ask a question to it saying, what kind of a product should I offer my customer? They'll give you a suggestion or two, and then they'll say, oh, by the way, this is why I'm suggesting this. And it has a link to things like, for example, what products are used for, what products solve what problems. This customer has these problems that have been identified.

27:01Therefore, so what is the logic behind, what is the connection behind the question that was asked and the answer that was given, just like humans do? We don't provide generative AI answers. It does use generative AI to provide the answer. But it is much more of a responsible, secure, reliable, hallucination-free AI. We've done a whole host of investments in AI. We have a product that is used by cybersecurity experts to monitor activity in the network. We have now added AI capabilities to it so that it helps the cybersecurity experts identify what could actually be a threat as opposed to weird activity, but not really a threat.

27:39And so this threat detection that is driven by AI. and it reduces the amount of time that it takes a cybersecurity expert to hone down on the problem by 52%. Think about it. It doubles their productivity. It takes half the time. You can do twice the work. We have a generative AI capability with our content management product so that it can create and target content based on audiences automatically. So AI is big. It's big for us too. You're going to be excited. There's so many products I feel like our team needs to learn about and then I'll come back and bug you for a discount. That sounds good.

28:11stuff. I'd love for you to become a user. We'll do a good deal. Awesome. We'll trade customer stories. It'll be fun. Yogesh, teach me how to execute M &A deals. And you can't tell me hire the best head of corp dev and best head of integration. That's the non-acceptable answer. No, that is not the answer. I think you do need great people in leadership. So don't get me wrong, but that's not the answer. That's not the only part of the answer. You do need great people who can lead the acquisition process and you need a great M &A leader for that. But in addition to that, in the end, the success of a deal comes from execution post acquisition.

28:44It is the integration. It is the delivering of outcomes over the next 6, 12, 18, 24, whatever number of months and whatever number of years you want to put the horizon out. But it is a long-term thing. And so what it requires is a whole host of what I would call initial analysis, expectation setting, goal setting, and then therefore driven by that due diligence effort to make sure that we validate our assumptions along with a creation of an integration plan and an execution plan. And all of that has to happen before the deal closes. I don't want to be without a plan until after the deal closes.

29:20I need to be able to be comfortable that we have a plan and that everybody whose job is to execute on parts of those plans have signed off on it. Somebody who runs M &A will actually help do the deal. Like they will lead the process, all that stuff, but it'll end up under a GM. The GM has to sign off on revenue targets, on efficiency targets, on cost stuff. It'll end up with IT workload. IT has to sign off on systems integration, speed at which is going to happen, etc. It ends up with work for people team, our HR people team. The people team has to sign off on, can we bring these people on board?

29:55Can we train them on our stuff? Is there a cultural fit? How will we make sure that wherever there's a disconnectedness in some part of the culture that we can bring them along? How big will that hurdle be? Can we overcome that? How much time will that take? Across the board, how will we interact with customers? How will we deliver the next product, release finance? Will we be able to produce our results so that our auditors can be happy and our investors can be happy and do it in a timely manner, the same rigor that we do with our own business? And how quickly can we do that? I think all of these questions have to be answered with plans.

30:27And I think that's the hard part. A lot of planning. It is a lot of planning. But at the same time, the more you do it, the better you get. Let me ask you this, though. The LOI. I mean, like, the LOI is your proposal and then your close is your wedding day. Yep. Yep. That's exactly correct. Planning in between. Yep. At LOI, how much consideration have you put in on how you're going to integrate this company? At LOI, what you have done is a very high-level analysis. at least what we do, is an analysis that says, is this a fit across the dimensions that we want it to be? Do we have a product market fit that is adjacent to what we do?

31:06Is their go-to-market effort similar enough to ours that we can actually bring it together and run it well? Is their product really as good based on whatever checks we can informally do or based on the data we initially get? LOI, you get very little. Before the LOI, you get very little data. Does this products have a good reputation out there. But nowadays, by the way, online resources are amazing. You go to G2 Crowd and you can read about any product and you can see what the customers are saying, the users are saying. So you do that homework that says, is this a good product? Is this a market that we want to be in?

31:37Is this a business that we believe is of the right size and scale that we can actually absorb? One of the things I actually think are some of the biggest mistakes that people make is that they will buy companies that are too large and they go, oh, you know what, we need to get from A to B. Instead of taking three steps to get there, I'll make a leap. And sometimes that leap is so big that the risk is much, much greater. People integration becomes harder. Customer integration becomes harder. Product integration becomes harder. This is an interesting one because that's what they say. You're taking lower risk.

32:11And what you described is doing the series of smaller acquisitions as opposed to a large one. How would you measure that? Would you look at revenues of each respected companies or do you look at headcount? I think it's a combination of both of those. Headcount. So headcount is actually really key in terms of when you operate. If I buy a company and I think that after the acquisition is complete and after we have the work as to who stays and who is not going to have a job, et cetera, figure that out, I want there to be five of the existing people versus one of the acquired. Why is that? When you have that kind of a ratio, the culture of the five will survive.

32:45And we love our culture. We are really proud of our culture. We win awards for how good we are as an employer. The Boston Globe consistently ranks us among the best places to work in Massachusetts. We get similar accolades in Bulgaria. We have a large presence there from Forbes in Bulgaria. We get similar accolades in India. We have a large presence in India. We run a company that basically has amazingly positive employee relationships. Our employee net promoter score is better than most enterprise software companies out there. In fact, it is among the best. our employee turnover is half that of the industry average because people love to work here.

33:22I want to sustain that culture. And by the way, it's good for business. If my turnover is low, I'm not spending money hiring. I'm not spending money training. And I've got business continuity. I don't have people leaving and I have to figure out who's going to do that job. So it is that, to me, the culture matters. So one is to five is a good ratio. One is to five, one is to six. One to five, one to six. So what you acquire is one fifth or one sixth your size in terms of headcount. And then revenue is proportional, but not exactly. Sometimes you get a little bit more revenue and then the headcount.

33:51And that's on the ratio. Maybe a company that is 30 % of my size. That's okay. That's good. It sounds like there's a correlation of risk too. If you're doing a bigger deal, there's more risk attached to it. You mentioned the culture piece, which is interesting. Because I'm wondering if there's a view of, I want to look for a strong suited culture that I know is going to mesh well versus, I'm going to have some HR people reach out and have counter arguments to this, but versus I'm going to change this company's culture to be more like ours, or I have confidence that I can change this company's culture to be more assimilated with ours.

34:22There's a little bit of both. I don't think you'd ever find two companies that have identical culture. It is often that you find a company that has what I would call 80 % culture overlap. And that's a random number. It could be 70, it could be 90. I'm not measuring, there are no metrics. But you kind of look at it and go culturally, are we similar? By the way, progress, lived values. What are the lived values? Not what people put up on science, But what are truly the lived values? And our lived values that you can ask progressors, people within the company about. We work together. We collaborate.

34:50We respect each other. We respect differences. We don't care what people's backgrounds are, what they look like. We respect everybody in the company and respect each other. We own our outcomes. We own the goals that we set for ourselves and deliver on those. That's a really important thing to us. We uphold trust. I mentioned earlier, trust is the foundation of everything we do. And we continually innovate. We continually improve ourselves. We innovate on the product side, but we also innovate on how we do things internally. The question is, you're looking for companies that you go, are there a transparent culture?

35:25So if the transparency is missing at the top, that is easy to fix. Replace the top, I'm going to be the top, hopefully. And in which case, I can enforce transparency and I can be transparent. The question really, is it transparent on the way up? Do people feel afraid to share information with management? Can you break that? Sometimes you can, sometimes you can't. So you have to figure out where there might be potential differences in culture and where they are, whether they can be overcome. So, yes, we do that analysis. It's interesting that you're only going to get so much of a perspective before LOI around that.

35:56No, no, no. You will not get any perspective on LOI. So you make the LOI and this is the work you do between LOI and closing the deal. At that point, I got this commitment. It's we just need to figure out how to overcome this versus. Not really. Not really. Would you look at it as a factor of, okay, there's a threshold. We're going to walk away from this deal. So we walk away from deals on a variety of fronts. We walk away from deals after doing LOIs on the following set of things. We find out that the business was not as it was portrayed. And that as it was portrayed is an important thing. And that could be financial metrics.

36:28That could be product characteristics. That could be customer profiles. And that could be people and culture. Any of those four, because it has all four have to work. Before you do the LOI, you get one management meeting. And you basically ask them those questions. What is your people culture? And they spend five or 10 minutes. And then you go, okay, that sounds good enough, reasonable. And we'll find out more. And if it turns out that's horrible, you walk away. Again, I have a very different view about M &A. It is absolutely critical for the buyer to not fall in love with an asset. If I've heard that term, usually reflected with the sellers.

37:02Don't fall in love. You just got to, you know, right price, sell it. But for the buyer, that's a good perspective. Because you want to stay objective through the process. It isn't that you shouldn't want the asset. You absolutely need to want the asset. Otherwise, you shouldn't put an LOI in front of people. And you have to be honest that you are doing this LOI with the right intent to buy. Your alibi view of an LOI is here's a deal thesis or a general business case on why we should do this deal. Correct. But as we go through and validate through the diligence period, then I can come back and say, okay, based on actual validation, there are some references here on why things aren't the way it's going to align well.

37:37and we're not going to hit the anticipated value because of that cultural misalignment or financials are different and whatnot. And then in that scenario, there are two things that can happen. One is it's so bad that you walk away. Another is you basically say, you know what, we will do this, but the valuation is different. And that also happens. But in general, most of the time, I try not to do the valuation change unless there's some obvious reason that basically says, you know, it's a different size business. So much of that overcoming these surprises, challenges is the relationship you have with the counterparty, specifically the CEO.

38:09Can you teach me that? I think it's something I'm already, we're a small company, but I'm building a pipeline now. I've transitioned from working in the business, working on the business, and having these early conversations when we're ready, we're ready. When you do that first conversation, you don't trust each other that much. Maybe a little bit like, I like the person. I can tell they're good personality. We got an idea of how our companies could come together, but there's still a lot to figure out. What's your approach to building their trust, But then also, I think, I don't know if you have some advice on like that clarity on why these companies are really going to come together.

38:42I believe that trust starts with transparency. And I'm very upfront about that in my very first conversation with the other party. And I'll be honest. I'll say, look, we may or may not do business, but I will always tell you the way I see things. And I want you to do the same. And if you ask me a question, I'll give you an honest answer. And if I ask you a question, I expect an honest answer as well. And if that trust is broken, Kisan, I have a really hard time moving forward at that point. When you set the ground rules between the two parties that are, and both agree that, yes, we will be honest and open and transparent with each other.

39:18That then creates the foundation on which you continue to have conversations. And as you have conversations, you're, of course, validating, even though you're not validating in the sense that you're questioning every question or every answer. But internally, you're validating whether or not the other party is being honest along the way. And I think, again, if you don't fall in love with the asset, you can basically along the way say, you know what? The other party is truly not telling us the full truth, the whole truth. They are actually trying to hide something. Now, you know, I had to ask three ways before I found this answer.

39:47And if that is the case, then you go, do I really want to go through with this? Aren't there other assets? You tell the person that? It's like part of the transparency of, hey, I'm going to be transparent. I don't feel you've been transparent. We're dealing with these issues. We see these issues. Yes. That's why I don't think we should move forward. Because when you don't move forward, you have to say why. I like it. Pretty gangster. I like it. By the way, and there is no animosity. There is no, hey, sorry, you know what? I no longer believe what I've heard. And so therefore I can't move forward.

40:13There's no animosity in that. It is what it is. It's a very matter of fact. It's straightforward. Yeah, exactly. As a matter of fact. Do you ever convince someone you sell their company? Yes. Teach me how to do that. It's kind of an interesting thing. I don't want to say convince. Convince is too strong a word. I think you, there has to be a germ. Yeah, you influence. Influence. There has to be a germ of a thought on the other side, at least, that they would consider moving on. So I think what you do is you don't start with the question. If somebody asks you, do you want to sell your business?

40:40Nobody will start with yes. Well, they'll give you like the billion dollar valuation. Or they'll give you some of them. So the question, what you start with is the following. You try to understand what their goals and aspirations are. So we do a lot of calls. I do a lot of CEO to CEO calls. We were nurturing this opportunity, so to speak. They know that they don't intend to sell in the next near term year or two. I know that they don't intend to sell in the next year or two. That's okay. I just want to get to know you. I want you to know me. And I want to learn what you think your aspirations are for the business.

41:10And they come back and they say, what we think next year we're going to grow and do this. And we're going to come out with this new product. And we're going to do this. That's wonderful. We touch base again in six months. How is it going? Or nine months. How is it going? Are you making good progress on that front? Are you seeing stuff? And at some point, you get a feel that the person is getting tired. And if they are getting tired, that's when you start the conversation. that says, look, we've been talking for the last few years that we, obviously the reason I'm talking to you is I think that you have a good business, but you are not really getting to exactly where you want to go.

41:40And so would it make sense for us to get there together? And that's how you approach it. And I think sometimes you can influence somebody, other times you can't. What is the reservations you see from them? Is it, I got to keep the control? I love the control. Is it, I'm growing, like for me, it would be growing 60 % year over year and I have a vast majority of the equity, I feel like I'm doing pretty damn good. So what are those typical objections you get? How do you overcome them? Objections range from exactly the kind that you said, look, we are doing well. We're growing well. We're doing well.

42:11We're hitting targets. I'm happy. I'm enjoying what I do. In which case I say, great, we will wait. I cannot at that point change your mind. If you truly are happy with what you're doing. We stay in touch and see if things change down the road. If things change. And things can change, by the way. Nothing to do with business. They can change on personal levels. I know a CEO who went through something on the personal owner. Like he was practically, he owned like 90 plus percent of the business. He went through a personal life event, which basically led him to rethink his priorities and go, you know what?

42:40I've spent 20 years building this business or more than 20. Maybe I should think of doing something else and pay attention to some other priorities. And because we had that relationship in the conversation, we then started the conversation of, okay, maybe we ought to do something together. I like it. So the timing is part of it. And that's why these deals don't get done overnight. Building those relationships and waiting for the right time. And you have a big pipeline for small outcomes. Your pipeline might be 100 companies and then you basically get one at a time slowly over time. Do you get a lot of like valuation gaps that you got to overcome?

43:10There's always a valuation gap. Think about it, right? There's always a valuation gap. Oh yeah, because you give me an offer and I'm going to ask for double. No, it's not just that. It's your baby. If you're running it, you think of it. There is a little bit of subjectivity in everybody. How does the dance go? If you approach me, I would expect you to make the offer first. If I'm actually outright approaching you, yes, I will make the offer. If you say, okay, so Yogesh, what do you think you'd be willing to pay? I'll say what I'd be willing to pay. You wouldn't fish? Not really, because that's, Kisan, the way I look at it is I'm disciplined about what I'm going to pay.

43:39If you say, no, Yogesh, that's not enough. I'll say, okay, I'm very happy that you said no, because a quick no is better than a long drawn out maybe. And you know what, Kisan, I wish you every success in getting more. You're very pragmatic about how you value company. Yes, we are. We're extremely disciplined. We're extremely pragmatic. I look for like the best deal possible at all times. You are looking for a best deal possible, but the reality is that what you really are looking for is a good deal. It is. That's why I'd want to fish and lean and somehow get a clue, even if I've got to take the guy for drinks.

44:07No, I mean... You got a number in mind. I want to know what that is so I can offer you half of it. If the person has a number in mind, that's a different story. Then they usually say, I do have a number in mind. In which case, okay, tell me what your number is. Yes. Hey, do you have a number in mind? Yeah. Okay. But usually, but I'm also... But most people would know the goal. I think the fundamental rule of negotiation is you don't want to get the first offer. I know. And so my view is I'll give you the first number. But as a buyer, you get pressure more to do that. Yeah. And I'll give you the first number.

44:32And I will also say, if you get meaningfully more than this today, go out and go for it. Good luck. If you don't and you still want to sell, I'm still here. So that's point number one. Point number two, if we wait six months, nine months, 12 months, and your performance is better and you're a different business than you are today, obviously the number will be different. So don't compare tomorrow's number to today's number. So tomorrow, if you don't decide to sell today and nine months later, you come back and say, hey, Yogesh, I grew 40 % in nine months. I'm growing 60 % a year. Obviously, the number will be different because now you're a different scale.

45:03Yeah. I'll give you a different number. Fair enough. Hey, let's get to the meat of this. The crux of this is really the execution integration. And I feel like so much of that hangs around the communication. Obviously, you got a lot of people to communicate with, customers and the ecosystem. But the employees are the heart of this. What's your approach to handling the communication with employees? I feel like the cultural sort of alignment and changes happen there. What does that look like from sign to close and then after close? Yeah, so there are three phases. So pre-sign, you get very limited access to anybody.

45:35You get access to, let's say, between four and eight people in the company. Nothing much happens there. They know who we are. We know who they are. There's enough meetings. They get to know us. We get to know them. It is the when between sign and close is really the key phase of getting the employees to understand what is going on. So sign is usually when the employees first find out. The management team knows, but the employees don't know. We acquire a company like MacLogic. We acquire a company like Chef. We acquire a company like Kemp. We acquire a company like Ipswich. It is only upon signing and the public announcement that happens along with that, that you go, we're being sold.

46:13Our communications team does enormous amounts of work beforehand with our people team, our HR team. And our people team and communications team, they work very closely together and they will have communications ready for day one for the employees. So we start communicating to them why. Attempt to do a call or some kind of a meeting to basically say, hey, I want to let you know this is why we're doing this. We send out electronic communications. This is why we're doing this. Then in addition to that, hey, this is the timeline. approximately. This is the process. We will talk to each of you over the coming X number of days.

46:49We want to understand what you think of this. We want to share with you. We'll answer your questions. Oh, by the way, here's a bunch of resources around our benefits policies. Here's a bunch of resources around our other things. If we don't keep everybody, when will we tell the people who we're not going to keep, etc. So we explain the timeline, we explain the process, And we do that early on and we repeat it and we are consistent and we execute on what we say to them. So if we tell them, for example, there are situations where we did an acquisition and we said to them, within the first 48 hours of closing, we will tell every one of you one of the following three things.

47:26One, you're part of us going forward as anybody else. Welcome to the family. Group two, sorry, I don't have a permanent job for you, but I do need you for some period of time. that period will be X months. And if you stay that X months, we will do something extra on top of your regular severance. Group C, sorry, I don't really have a role for you at all. Here's your severance. Here's how we'll help you. Thank you for your service. We are very transparent. We're very upfront. We're as quick as we can. In some cases, we're able to do that within the first few days. In some cases, it takes us 30 days from close.

48:01But as quickly as possible, we communicate that. And the reason for that is uncertainty is the worst thing for morale. Not knowing what is going to happen is worse than finding out exactly what is happening. But then you can plan. We want to eliminate the uncertainty. We want to be respectful. We want to make sure we treat people right. Historically, we have done more for severance than the company that used to do for its own people before we acquired them. And part of it is because we're bigger. Part of it is that we're bigger. Part of it is our policies are more generous than some smaller companies usually are.

48:33But that's okay. Job or no job or something in between. What were the other things that you mentioned or you were going to mention about? About the communication? This is like the main one though. People just want to know if they have a job or not. People want to know about a job. To me, I think that's the main thing. The other thing then becomes, what is our intent for products? What is our intent to invest in the business or not? Because that's the other question that immediately comes up. Are you going to invest in this business? And those I feel like are following on to the why. Yes. So all of this I got, you answer the why.

49:02And it's really probably the similar where you communicate to the board of why we're doing the deal. That's exactly correct. And then you got, hey, this is the timeline and what the process is going to look like. And then you're getting ahead of the question. Always the biggest FUD question is the job security. So you address that and give the rundown of the scenarios and what's going to happen. And then it's getting ahead to some of the other following questions that will likely pop up around products and investments in the business. And the benefits is early, by the way. So when you talk about job, job has two or three components.

49:30Do I have a job? What will happen to my comp? because some companies have a tendency to potentially change comp at the time of acquisition. We are, again, whatever our policy is, we share upfront. Hey, we will not reduce your comp, whatever it is. Because there are people who basically are worried, okay, maybe they'll keep me a job, but they'll cut my salary by 20 % and now I'll be stuck paying a mortgage that I can't afford. You want to tell them that, hey, you know what? I'm not going to cut your salary. This is our policy. These are the benefits that we provide. This is our 401k benefit. This is our employee stock purchase plan benefit.

50:03This is how we reward people through bonuses. And this is how... So it's like all upgrades and they're like excited about it. Usually it is an upgrade. Invariably, it turns out it's an upgrade because it's a small company. They're not public. We are public. So the public stock helps. Any stock grant is a public stock. So as it vests, it becomes instant cash. So I think all those things help. We are a global company. So they recognize that their product will have a broader footprint. The work they do can have a larger impact around the globe. There are all kinds of other benefits that they get out being a publicly traded global company.

50:32This is great. I wrote this down. This is Yogesh's CEO deal announcement playbook. I feel like you got all the elements right there to nail your deal announcement, internally especially. And similar communication about why we did the deal, etc., has to happen to our own employees. Because when we do an acquisition, we have thousands of employees who don't know about the deal. There's a very small group of people that's doing due diligence and figuring things out. when we announce the communication internally with the rest of the organization is equally important. Yeah, that's a really good point.

51:02Okay, I know we're running close on time here, Yogesh. What are the biggest challenges? Either way, challenges, biggest lessons learned. Help me so I don't screw up a deal when I come to one. There's always something unexpected that pops, Kisan. Don't ever expect the deal to go exactly the way you've planned it. You will find out something that you did not discover during no matter how much due diligence you did. And not only that, sometimes you know that something exists, but you don't understand its complexity fully. And that usually happens if you don't have a business like that. So I'll give you an example.

51:33We acquired MarkLogic. MarkLogic had a business serving and has a business, we now do because of MarkLogic, serving the federal government. And not just federal government, but federal government that requires security clearances. So that has its own special way of doing things. So even I don't know those customer names, let alone what are they doing with my product. So how do you create the governance structure inside the organization? How do you run it so that you meet the security and clearance requirements of the customers going forward, while at the same time, you have your internal governance rule about how do we run and make sure that we are running ourselves and so on.

52:06So that was in a level of complexity that we were not as aware of as to what it would actually need. We knew there was a government business. We knew it was a federally cleared business so that it required clearances, but we didn't understand to the full extent. And so that created complexity and it created a bit of a, if I may call it, changing our plan during integration. How you overcome challenges is the willingness to be ready to adapt. I'll give you a very big challenge that we ran into. We acquired Chef. And the challenge at Chef was, and we didn't realize this, is that the people in the organization had never been told that the company was not doing great.

52:45So the company's prior valuation was at a unicorn. So people were like, okay, I'm going to have a billion dollar exit. So my options are going to be worth this much and I'm going to be this big rich. The business went sideways. It was still a very good business, but it was not growing anymore. When you're a single digit growth company and you're 75 million in revenue, you're not going to get a billion dollar valuation. So when you acquired it for much less, there was a group of employees that were really frustrated and were really unhappy with prior management. But the way they showed it is by leaving.

53:18So we had a whole lot more people leave than we had planned. Now that's a real risk. That is completely... Yeah, that's probably your biggest risk. That was our biggest risk. And so what ended up... We were very thoughtful about it. We had a team in India that we had basically said, if needed, we will bring this team to bear. So we brought in a team that was working on other products, about 25, 30 people, and we completely shifted them into working on Chef. And then we built around them and we grew the business around them. And we were able to... We served our customers. The business has grown since then.

53:48It's been a good outcome, but it required tremendous agility and people to really pivot, if I may call it, how we're going to execute. It's like you have to have that skill as an acquirer to be agile and really proactive. You're not letting problems. You have to monitor and you have to deal with problems as they arise and be willing to do that. And there's no finger pointing. There's no nothing. It is what it is. You have to deal with the situation. That really, to me, is the most important thing about succeeding. Making sure that nobody forgets what outcomes and goals we are targeting. And if surprises show up, which they will, overcoming them in the most collaborative, efficient, and rapid way possible.

54:30That's like a culture you have to have as a company. Yep, it goes back to the culture. What's the craziest thing you've seen in M &A? The craziest thing I've seen in M &A is the expectation that if you lash together two sinking rocks, they will float. I'll tell you what I mean. So Symantec was a$14 billion market cap company. They acquired Veritas, which is a$14 billion market cap company. Both were struggling. Both were really struggling. I've seen this. Now I know what you're talking about. Yeah. And then they decided, you know what? If we acquire this company together, we will be dramatically successful.

55:00So they went from being 14 plus 14 to net outcome of the combined company market cap was 14. So it was a value destruction at a scale that I don't think I've seen in a single deal. Wow. That 100 % of the acquired value went away. 100%. It was shocking. This is more than a decade ago now. It's probably 14, 15 years ago. That sounds worse than an old time winner. It probably does. I don't know. Yeah, you're right. That was the dot-com time. But this is enterprise software. I look for examples in enterprise software. I think there are lots of ways deals can go wrong. I think discipline is so key.

55:37Execution is so key. And then agility afterwards is essential. This has been a great conversation, Yogesh. I want to thank you for taking the time today, helping me become a better M &A scientist. It's a pleasure, Kisan. It's delightful to speak with you. And I wish you every success in your business. Thank you.

55:58Welcome to this mini interview on M &A Science. Today, I'm catching up with Jack Glazebrook, who's been a leader in the data space for over 14 years, currently overseeing America's corporate sales and strategic alliances at S &P Global Market Intelligence. They will explore insights on the evolving landscape of M &A data, tech solutions that drive efficiency, and S &P Global's latest advancements in private market data, textual analytics, and more, all on the S &P Capital IQ Pro platform. Jack, how are you doing? I'm good, thanks. Thanks for having me. This is great. I know many of your listeners are clients.

56:33There's a lot going on in the markets right now. So we're excited to be talking today and also So talking about the evolution of not only tech, but also data and how it's impacting M &A professionals. You've been part of S &P Global through a period of major growth in tech evolution. S &P Global recently completed a notable$44 billion merger with IHS Market. What are some of the most impactful shifts you've seen in how M &A professionals use technology? I would be omiss if I didn't lead off with AI. AI is obviously a big theme. I know that you covered a lot on the podcast. we see AI as an efficiency play both internally in how we collect data, aggregate data, link data, but also how we support M &A professionals get to the information that they need quickly and efficiently.

57:18And ultimately, it's a time saver for us. So we see this as a critical part of our evolution, investing heavily in it. And the merger with IHF market has only accelerated that. Another area that I'll point out is alternative data. So alternative data, traditionally, especially for M &A professionals, it was all about financials, company level information. We've seen a huge trend of M &A professionals wanting to also access research, textual analytics, sentiment. And so a lot of our focus has been in aligning with that market demand. We're making a lot of investments in workflow tools that allow you to glean additional insight across textual analytics, research and documentation.

57:57Lastly, work for efficiency. This is a huge theme, not only for M &A professionals, but also for us. We're building Capital IQ Pro to be a workhorse platform, something that can be leveraged to build really complex models, aggregate large volumes of data. We're doing that by obviously investing not only in the technology capabilities of the platform, but also making sure that every data set that we bring in is interlinked so that you can build broader views of a private company or a public company. And that's been a huge push for us. AI power, expanding the data set, improving workflows, which means you're covering more use cases.

58:32Absolutely. Yeah. Capital IQ Pro was built for investment bankers. It was actually a platform. The original founders had their own investment bank and they spin off this platform. It became CapIQ. S &P acquired CapIQ. And we've just built on that deal-making focus. And now Capital IQ is used by over 300 ,000 users, both on the corporate side, as well as in the financial market. So M &A is at the core of what we do, deal-making, and it's a really exciting time to continue to evolve with Capital IQ Pro. It's been a while since I last checked out and used CapIQ. What's new? What's the most exciting right now in the world of M &A data?

59:09The biggest areas of need that we've heard for many years has been around accessing actionable and accurate private company data. There are a lot of providers out there, really great products for M &A professionals that are out there, But being able to actually source, link, and deliver meaningful, actual private company data, that has been a big trend. And that's something that Capital IQ Pro is showing up in a big way. We're excited to now be known not just for our market-leading public company information, but also our market-leading private company information. That involves delivering 54 million private companies globally with a lot of supportive analytics around supply chain.

59:47Again, research, textual analytics, aftermarket research. Another area, again, we touched on this earlier, workflow, workflow efficiency. So really investing in AI functionality for our productivity features. So if you're screening research, documents, aftermarket research, again, key for M &A professionals, this is a big area of focus for us. We want you to be able to comb large volumes of documents and filings and transcripts and get the analytics that you need. Lastly, we recently acquired Visible Alpha. Visible Alpha is a really exciting addition. This came after the merger with IHS Market.

1:00:20For those that don't know, Visible Alpha sources and delivers deep granular consensus and broker estimates from sell-side contributors and allows M &A professionals to conduct really targeted assessments of a company's business model. We're excited to integrate that and build on the success that they've had. And we're really happy that they're a part of the market intelligence family. Yeah, that's some really fascinating capability to add to what you already mentioned is adding the AI functionality and even further expanding the data set altogether. For M &A practitioners, accurate and actionable data is critical.

1:00:52Could you walk us through a couple of the most high-impact use cases where S &P's data supports decision-making and complex deals? The investment banker is core to the origin story of Capital IQ. That's around deal-making, obviously. Some of the biggest use cases, and they are ever becoming more complex for the M &A professional, is around public and private company valuation. So we want to make sure that we are aligning with their needs, whether that's building bespoke models. We have over 550 pre-built models. That takes a lot of time away from the RGS work of building your own models. So that's one area.

1:01:26And we continue to build on that. The other area is screening targets. Essentially, Capital IQ Pro allows you to establish really granular custom searches to be able to identify target or search or screen sectors and to be able to expedite all of the processes surrounding the pre and post M &A deal activity. And that's a big one for us, screening targets, allowing you to come through a very large global database effectively. And the last one is monitoring and assessing sentiment and competitive intelligence. This is something that we continue to build upon. AI is allowing us to do this. But again, there's thousands of documents out there, whether they're public filings, earnings calls, transcripts related to a conference.

1:02:08And we want to be able to glean summaries and sentiments from all of these documents so that you can derive value. And textual analytics, a big theme, sentiment, scores, all key to the growth of Capital IQ Pro. This sounds like a whole new product, Jack, from what you already told me. 54 million private companies track, 550 pre-built models, and then doing the sentiment analysis. That's pretty impressive. Yeah, it's been great. We're really excited. This is an exciting space. We are a data provider at the heart of what we do, but technology is really opening things up for us. And if we're just hyper-focused on making our users and their workflows more efficient in how they conduct their day-to-day, that's a huge part of focus for us.

1:02:53So that extends to technology now. That extends to acquisitions and integrating new data sets. We're constantly investing, constantly evolving. If you haven't been on Capital IQ Pro lately, check it out. See how it can save you time during your day as you're crunching numbers, working on deals. For M &A pros who want to learn more, visit spglobal.com slash pro insights. Explore how these advanced tools and data solutions are driving efficiencies in M &A. Again, that's spglobal.com slash pro insights. Thanks, Jack. Thanks for having me. Hey, thanks for taking the time. It was fun chatting with you.

1:03:29Fellow M &A scientists, if you've listened through to this interview and gotten this far, I appreciate you and always welcome the feedback and especially the criticism. I prefer the criticism so I can learn and get better at doing this. And if you have recommendations of awesome guests, always welcome that. Till next time, here's to the deal.

1:03:59Thank 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.

1:04:44Again, that's mascience.com. Here's to the deal.

1:04:58Views 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 education.