Company Acquisition Quotes

Here is an all-too-brief summary of Buffett’s approach: He looks for what he calls “franchise” companies with strong consumer brands, easily understandable businesses, robust financial health, and near-monopolies in their markets, like H & R Block, Gillette, and the Washington Post Co. Buffett likes to snap up a stock when a scandal, big loss, or other bad news passes over it like a storm cloud—as when he bought Coca-Cola soon after its disastrous rollout of “New Coke” and the market crash of 1987. He also wants to see managers who set and meet realistic goals; build their businesses from within rather than through acquisition; allocate capital wisely; and do not pay themselves hundred-million-dollar jackpots of stock options. Buffett insists on steady and sustainable growth in earnings, so the company will be worth more in the future than it is today.

I threw myself into the chaise that was to convey me away and indulged in the most melancholy reflections. I, who had ever been surrounded by amiable companions, continually engaged in endeavouring to bestow mutual pleasure—I was now alone. In the university whither I was going I must form my own friends and be my own protector. My life had hitherto been remarkably secluded and domestic, and this had given me invincible repugnance to new countenances. I loved my brothers, Elizabeth, and Clerval; these were "old familiar faces," but I believed myself totally unfitted for the company of strangers. Such were my reflections as I commenced my journey; but as I proceeded, my spirits and hopes rose. I ardently desired the acquisition of knowledge. I had often, when at home, thought it hard to remain during my youth cooped up in one place and had longed to enter the world and take my station among other human beings. Now my desires were complied with, and it would, indeed, have been folly to repent.

thought then that decent, intelligent, and experienced managers would automatically make rational business decisions. But I learned over time that isn’t so. Instead, rationality frequently wilts when the institutional imperative comes into play. For example: (1) As if governed by Newton’s First Law of Motion, an institution will resist any change in its current direction; (2) Just as work expands to fill available time, corporate projects or acquisitions will materialize to soak up available funds; (3) Any business craving of the leader, however foolish, will be quickly supported by detailed rate-of-return and strategic studies prepared by his troops; and (4) The behavior of peer companies, whether they are expanding, acquiring, setting executive compensation or whatever, will be mindlessly imitated.

Companies should embrace data-driven decision-making because it enables them to make informed decisions based on concrete evidence rather than speculation, leading to more efficient operations, better strategies, and improved competitiveness in today's data-rich business environment.

So, you work with Marcy?” Wayne earned points for what appeared to be sincere interest. “Yes. She’s in public accounting and I’m in corporate, but we both work for the same company.” Wayne grinned. “Me, I’m in murders and executions.” “Wayne!” Marcy rolled her eyes. “He means—” “Mergers and acquisitions. I got it.

In that way Vinteuil's phrase, like some theme, say, in Tristan, which represents to us also a certain acquisition of sentiment, has espoused our mortal state, had endued a vesture of humanity that was affecting enough. Its destiny was linked, for the future, with that of the human soul, of which it was one of the special, the most distinctive ornaments. Perhaps it is not-being that is the true state, and all our dream of life is without existence; but, if so, we feel that it must be that these phrases of music, these conceptions which exist in relation to our dream, are nothing either. We shall perish, but we have for our hostages these divine captives who shall follow and share our fate. And death in their company is something less bitter, less inglorious, perhaps even less certain.

I often see teams that maniacally focus on their metrics around customer acquisition and retention. This usually works well for customer acquisition, but not so well for retention. Why? For many products, metrics often describe the customer acquisition goal in enough detail to provide sufficient management guidance. In contrast, the metrics for customer retention do not provide enough color to be a complete management tool. As a result, many young companies overemphasize retention metrics and do not spend enough time going deep enough on the actual user experience. This generally results in a frantic numbers chase that does not end in a great product.

Companies should consider merger and acquisition (M&A) opportunities carefully because these strategic moves can have a significant impact on their operations and financial health. Thorough evaluation helps mitigate risks, ensure alignment with business objectives, and maximize the potential benefits, ultimately leading to successful integration and growth.

yield to my simple demands. It’s what keeps the wheel greased and moving efficiently. We’re not a Fortune 500 company and one of the world’s most prestigious acquisition firms

The government regulates them, or chooses not to, approves or blocks their mergers and acquisitions, and sets their tax policies (often turning a blind eye to the billions parked in offshore tax havens). This is why tech companies, like the rest of corporate America, inundate Washington with lobbyists and quietly pour hundreds of millions of dollars in contributions into the political system. Now they’re gaining the wherewithal to fine-tune our political behavior—and with it the shape of American government—just by tweaking their algorithms.

He devoured morning shows, daytime shows, late-night talk shows, soaps, situation comedies, Lifetime Movies, hospital dramas, police series, vampire and zombie serials, the dramas of housewives from Atlanta, New Jersey, Beverly Hills and New York, the romances and quarrels of hotel-fortune princesses and self-styled shahs, the cavortings of individuals made famous by happy nudities, the fifteen minutes of fame accorded to young persons with large social media followings on account of their plastic-surgery acquisition of a third breast or their post-rib-removal figures that mimicked the impossible shape of the Mattel company’s Barbie doll, or even, more simply, their ability to catch giant carp in picturesque settings while wearing only the tiniest of string bikinis; as well as singing competitions, cooking competitions, competitions for business propositions, competitions for business apprenticeships, competitions between remote-controlled monster vehicles, fashion competitions, competitions for the affections of both bachelors and bachelorettes, baseball games, basketball games, football games, wrestling bouts, kickboxing bouts, extreme sports programming and, of course, beauty contests.

Leaders of large businesses sometimes make huge bets in expensive mergers and acquisitions, acting on the mistaken belief that they can manage the assets of another company better than its current owners do.

The only virtue is vice, and the acquisition of power justifies all things. 11 Falkirk and company had left disarray behind them. In an hour and a half, the Coltranes, father and daughter, restored order to their little world.

Companies should maintain accurate and timely financial records because it serves as the foundation for informed decision-making, ensures compliance with regulatory requirements, and enhances transparency, ultimately bolstering trust among stakeholders and facilitating long-term financial stability and growth. Without good records, businesses may risk financial mismanagement and uncertainty, hindering their ability to thrive in a competitive market.

The startup’s goal is to find a profitable customer acquisition strategy by spending small amounts of money in a lot of them, measuring results, and then narrowing down the best channels, while performing PDCA for continuous improvement.

Yeah, take it from me. He may try to sell himself to you along with the company. And then there is Roberto, the CEO of our acquisition target. He also seems to be a bit of a flirt. Those two are like moths around a light bulb with you. Any idea how you would react if they both came after you?

Using Hollerith’s tabulators, the 1890 census was completed in one year rather than eight. It was the first major use of electrical circuits to process information, and the company that Hollerith founded became in 1924, after a series of mergers and acquisitions, the International Business Machines Corporation, or IBM.

Partnering, however, provides a way for companies to secure needed capabilities fast and effectively while dropping their cost structure. It allows a company to leverage other companies’ expertise and economies of scale. Partnering includes closing gaps in capabilities through making small acquisitions when doing so is faster and cheaper, providing access to needed expertise that has already been mastered.

Be optimistic around the opportunity but tremendously concerned about the risks involved. This will allow you to see the opportunity as it is. Most tire-kickers spend the entire first meeting identifying why the business is a bad investment rather than identifying the opportunity as a whole. Where are the opportunities and where are the risks of this business? What would need to be true for you to grow this company to double its size? These are the questions you are asking yourself.

My reading has been lamentably desultory and immedthodical. Odd, out of the way, old English plays, and treatises, have supplied me with most of my notions, and ways of feeling. In everything that relates to science, I am a whole Encyclopaedia behind the rest of the world. I should have scarcely cut a figure among the franklins, or country gentlemen, in King John's days. I know less geography than a schoolboy of six weeks standing. To me a map of old Ortelius is as authentic as Arrowsmith. I do not know whereabout Africa merges into Asia, whether Ethiopia lie in one or other of those great divisions, nor can form the remotest, conjecture of the position of New South Wales, or Van Diemen's Land. Yet do I hold a correspondence with a very dear friend in the first named of these two Terrae Incognitae. I have no astronomy. I do not know where to look for the Bear or Charles' Wain, the place of any star, or the name of any of them at sight. I guess at Venus only by her brightness - and if the sun on some portentous morn were to make his first appearance in the west, I verily believe, that, while all the world were grasping in apprehension about me, I alone should stand unterrified, from sheer incuriosity and want of observation. Of history and chronology I possess some vague points, such as one cannot help picking up in the course of miscellaneous study, but I never deliberately sat down to a chronicle, even of my own country. I have most dim apprehensions of the four great monarchies, and sometimes the Assyrian, sometimes the Persian, floats as first in my fancy. I make the widest conjectures concerning Egypt, and her shepherd kings. My friend M., with great pains taking, got me to think I understood the first proposition in Euclid, but gave me over in despair at the second. I am entirely unacquainted with the modern languages, and, like a better man than myself, have 'small Latin and less Greek'. I am a stranger to the shapes and texture of the commonest trees, herbs, flowers - not from the circumstance of my being town-born - for I should have brought the same inobservant spirit into the world with me, had I first seen it, 'on Devon's leafy shores' - and am no less at a loss among purely town objects, tool, engines, mechanic processes. Not that I affect ignorance - but my head has not many mansions, nor spacious, and I have been obliged to fill it with such cabinet curiosities as it can hold without aching. I sometimes wonder how I have passed my probation with so little discredit in the world, as I have done, upon so meagre a stock. But the fact is, a man may do very well with a very little knowledge, and scarce be found out, in mixed company; everybody is so much more ready to produce his own, than to call for a display of your acquisitions. But in a tete-a-tete there is no shuffling. The truth will out. There is nothing which I dread so much, as the being left alone for a quarter of an hour with a sensible, well-informed man that does not know me.

The third acquisition was a big single-family house. I found an architect, a small local general contractor, and we created a design for four separate units. Then I went to the bank and got loans to do the renovation. I was twenty-three, with a BA in political science. I didn’t know anything about financing. But it never crossed my mind that I might be too young to start an investment business or that I couldn’t do it. I didn’t know any better, but was able to sell the banks on my ability to get it done. Our management company took over the property, did the renovation, and rented the units. The asset did very well.

The thing many people don’t realize about corporate lawyers is that they are nothing like what you see on TV shows. Sherry, Aldridge, and I will never step foot in a courtroom. We’ll never argue a case. We do deals; we’re not litigators. We prepare documents and review every piece of paperwork for a merger or an acquisition. Or to take a company public. On Suits, Harvey does both paperwork and crushes it in court. In reality, the lawyers at our firm who argue cases don’t have a clue what we do in these conference rooms. Most of them haven’t prepared a document in a decade. People think our form of corporate law is the less ambitious of the two, and while in many ways it’s less glamorous—no closing arguments, no media interviews—nothing compares to the power of the paper. At the end of the day, law comes down to what is written, and we do the writing. I love the order of deal making, the clarity of language—how there is little room for interpretation and none for error. I love the black-and-white terms. I love that in the final stages of closing a deal—particularly those of the magnitude Wachtell takes on—seemingly insurmountable obstacles arise. Apocalyptic scenarios, disagreements, and details that threaten to topple it all. It seems impossible we’ll ever get both parties on the same page, but somehow we do. Somehow, contracts get agreed upon and signed. Somehow, deals get done. And when it finally happens, it’s exhilarating. Better than any day in court. It’s written. Binding. Anyone can bend a judge’s or jury’s will with bravado, but to do it on paper—in black and white—that takes a particular kind of artistry. It’s truth in poetry. I

Beyond streamlining operations and introducing cost innovations, a second lever companies can pull to meet their target cost is partnering. In bringing a new product or service to market, many companies mistakenly try to carry out all the production and distribution activities themselves. Sometimes that’s because they see the product or service as a platform for developing new capabilities. Other times it is simply a matter of not considering other outside options. Partnering, however, provides a way for companies to secure needed capabilities fast and effectively while dropping their cost structure. It allows a company to leverage other companies’ expertise and economies of scale. Partnering includes closing gaps in capabilities through making small acquisitions when doing so is faster and cheaper, providing access to needed expertise that has already been mastered. A

The intellectual life may be kept clean and healthful if man will live the life of nature and not import into his mind difficulties which are none of his. No man need be perplexed in his speculations. Not less conspicuous is the preponderance of nature over will in all practical life. There is less intention in history than we ascribe to it. We impute deep-laid far-sighted plans to Cæsar and Napoleon; but the best of their power was in nature, not in them. Our life might be much easier and simpler than we make it; that the world might be a happier place than it is; that there is no need of struggle, convulsions, and despairs, of the wringing of the hands and the gnashing of the teeth; that we miscreate our own evil. A little consideration of what takes place around us every day would show us that a higher law than that of our will regulates events; that our painful labors are unnecessary and fruitless; that only in our easy, simple, spontaneous action are we strong, and by contenting ourselves with obedience we become divine. No man can learn what he has not preparation for learning, however near to his eyes is the object. Not in nature but in man is all the beauty and worth he sees. The world is very empty, and is indebted to this gilding, exalting soul for all its pride. He may see what he maketh. Our dreams are the sequel of our waking knowledge. The visions of the night bear some proportion to the visions of the day. Hideous dreams are exaggerations of the sins of the day. We see our evil affections embodied in bad physiognomies. The same reality pervades all teaching. The man may teach by doing, and not otherwise. If he can communicate himself he can teach, but not you words. He teaches who gives, and he learns who receives. There is no teaching until the pupil is brought into the same state or principle in which you are; a transfusion takes place; he is you and you are he; then is a teaching, and by no unfriendly chance or bad company can he never quite lose the benefit. The effect of every action is measured by the depth of the sentiment from which it proceeds. The great man knew not that he was great. It look a century or two for that fact to appear. What he did, he did because he must; it was the most natural thing in the world, and grew out of the circumstances of the moment. But now, every thing he did, even to the lifting of his finger or the eating of bread, looks large, all-related, and is called an institution. We are full of these superstitions of sense, the worship of magnitude. We call the poet inactive, because he is not a president, a merchant, or a porter. We adore an institution, and do not see that it is founded on a thought which we have. But real action is in silent moments. The epochs of our life are not in the visible facts of our choice of a calling, our marriage, our acquisition of an office, and the like, but in a silent thought by the wayside as we walk; in a thought which revises our entire manner of life and says,—‘Thus hast thou done, but it were better thus.

Perhaps we shall lose them, perhaps they will be obliterated, if we return to nothing in the dust. But so long as we are alive, we can no more bring ourselves to a state in which we shall not have known them than we can with regard to any material object, than we can, for example, doubt the luminosity of a lamp that has just been lighted, in view of the changed aspect of everything in the room, from which has vanished even the memory of the darkness. In that way Vinteuil's phrase, like some theme, say, in Tristan, which represents to us also a certain acquisition of sentiment, has espoused our mortal state, had endued a vesture of humanity that was affecting enough. Its destiny was linked, for the future, with that of the human soul, of which it was one of the special, the most distinctive ornaments. Perhaps it is not-being that is the true state, and all our dream of life is without existence; but, if so, we feel that it must be that these phrases of music, these conceptions which exist in relation to our dream, are nothing either. We shall perish, but we have for our hostages these divine captives who shall follow and share our fate. And death in their company is something less bitter, less inglorious, perhaps even less certain.

the present grandeur and prospective pre-eminence of that glorious American Republic, in which Europe enviously seeks its model and tremblingly foresees its doom. Selecting for an example of the social life of the United States that city in which progress advances at the fastest rate, I indulged in an animated description of the moral habits of New York. Mortified to see, by the faces of my listeners, that I did not make the favourable impression I had anticipated, I elevated my theme; dwelling on the excellence of democratic institutions, their promotion of tranquil happiness by the government of party, and the mode in which they diffused such happiness throughout the community by preferring, for the exercise of power and the acquisition of honours, the lowliest citizens in point of property, education, and character. Fortunately recollecting the peroration of a speech, on the purifying influences of American democracy and their destined spread over the world, made by a certain eloquent senator (for whose vote in the Senate a Railway Company, to which my two brothers belonged, had just paid 20,000 dollars), I wound up by repeating its glowing predictions of the magnificent future that smiled upon mankind—when the flag of freedom should float over an entire continent, and two hundred millions of intelligent citizens, accustomed from infancy to the daily use of revolvers, should apply to a cowering universe the doctrine of the Patriot Monroe.

Even when he was not thinking of the little phrase, it existed, latent, in his mind, in the same way as certain other conceptions without material equivalent, such as our notions of light, of sound, of perspective, of bodily desire, the rich possessions wherewith our inner temple is diversified and adorned. Perhaps we shall lose them, perhaps they will be obliterated, if we return to nothing in the dust. But so long as we are alive, we can no more bring ourselves to a state in which we shall not have known them than we can with regard to any material object, than we can, for example, doubt the luminosity of a lamp that has just been lighted, in view of the changed aspect of everything in the room, from which has vanished even the memory of the darkness. In that way Vinteuil’s phrase, like some theme, say, in Tristan, which represents to us also a certain acquisition of sentiment, has espoused our mortal state, had endued a vesture of humanity that was affecting enough. Its destiny was linked, for the future, with that of the human soul, of which it was one of the special, the most distinctive ornaments. Perhaps it is not-being that is the true state, and all our dream of life is without existence; but, if so, we feel that it must be that these phrases of music, these conceptions which exist in relation to our dream, are nothing either. We shall perish, but we have for our hostages these divine captives who shall follow and share our fate. And death in their company is something less bitter, less inglorious, perhaps even less certain.

The power of the big fish in general to regroup is hardly restricted to banking. When Standard Oil was broken up in 1911, the immediate effect was to replace a national monopoly with a number of regional monopolies controlled by many of the same Wall Street interests. Ultimately, the regional monopolies regrouped: In 1999 Exxon (formerly Standard Oil Company of New Jersey) and Mobil (formerly Standard Oil Company of New York) reconvened in one of the largest mergers in US history. In 1961 Kyso (formerly Standard Oil of Kentucky) was purchased by Chevron (formerly Standard Oil of California); and in the 1960s and 1970s Sohio (formerly Standard Oil of Ohio) was bought by British Petroleum (BP), which then, in 1998, merged with Amoco (formerly Standard Oil of Indiana). The tale of AT&T is similar. As the result of an antitrust settlement with the government, on January 1, 1984, AT&T spun off its local operations so as to create seven so-called Baby Bells. But the Baby Bells quickly began to merge and regroup. By 2006 four of the Baby Bells were reunited with their parent company AT&T, and two others (Bell Atlantic and NYNEX) merged to form Verizon. So the hope that you can make a banking breakup stick (even if it were to be achieved) flies in the face of some pretty daunting experience. Also, note carefully a major political fact: The time when traditional reformers had enough power to make tough banking regulation really work was the time when progressive politics still had the powerful institutional backing of strong labor unions. But as we have seen, that time is long ago and far away.

Blackbeard the pirate was actually Edward Teach sometimes known as Edward Thatch, who lived from 1680 until his death on November 22, 1718. Blackbeard was a notorious English pirate who sailed around the eastern coast of North America. Although little is known about his childhood he may have worked as an apprentice on an English ship, during the second phase in a series of wars between the French and the English from 1754 and ended in 1778 as part of the American Revolutionary War. The war had different names depending on where it was fought. In the American colonies the war was known as the French and Indian War. During the time it was fought during the reign of Anne, Queen of Great Britain, it was called Queen Anne's War and in Europe it was known as the War of the Spanish Succession. During the earlier period of hostilities between France and England, some English ships were granted permission to raid French colonies and French ships and were considered privateers. Captain Benjamin Hornigold, whose crew Teach joined around 1716 operated from the Bahamian island of New Providence. Captain Hornigold placed Teach in command of a sloop that he had captured and during this time he was given the name Blackbeard. Horngold and Blackbeard sailing out of New Providence engaged in numerous acts of piracy. Their numbers were boosted by the addition of other captured ships. Blackbeard captured a French slave ship known as La Concorde and renamed her Queen Anne's Revenge. He renamed it “Queen Anne's Revenge” referring to Anne, Queen of England and Scotland returning to the throne of Great Britain. He equipped his new acquisition with 40 guns, and a crew of over 300 men. Becoming a world renowned pirate, most people feared him. In a failed attempt to run a blockade in place and refusing the governors pardon, he ran “Queen Anne's Revenge” aground on a sandbar near Beaufort, North Carolina and settled in North Carolina where he then accepted a royal pardon. The wreck of “Queen Anne's Revenge” was found in 1996 by private salvagers, Intersal Inc., a salvage company based in Palm Bay, Florida Not knowing when enough, he returned to plundering at sea. Alexander Spotswood, the Governor of Virginia formed a garrison of soldiers and sailors to protect the colony and if possible capture Blackbeard. On November 22, 1718 following a ferocious battle, Blackbeard and several of his crew were killed by a small force of sailors led by Lieutenant Robert Maynard. After his death, Blackbeard became a martyr and an inspiration for a number of fictitious books.

The Ten Ways to Evaluate a Market provide a back-of-the-napkin method you can use to identify the attractiveness of any potential market. Rate each of the ten factors below on a scale of 0 to 10, where 0 is terrible and 10 fantastic. When in doubt, be conservative in your estimate: Urgency. How badly do people want or need this right now? (Renting an old movie is low urgency; seeing the first showing of a new movie on opening night is high urgency, since it only happens once.) Market Size. How many people are purchasing things like this? (The market for underwater basket-weaving courses is very small; the market for cancer cures is massive.) Pricing Potential. What is the highest price a typical purchaser would be willing to spend for a solution? (Lollipops sell for $0.05; aircraft carriers sell for billions.) Cost of Customer Acquisition. How easy is it to acquire a new customer? On average, how much will it cost to generate a sale, in both money and effort? (Restaurants built on high-traffic interstate highways spend little to bring in new customers. Government contractors can spend millions landing major procurement deals.) Cost of Value Delivery. How much will it cost to create and deliver the value offered, in both money and effort? (Delivering files via the internet is almost free; inventing a product and building a factory costs millions.) Uniqueness of Offer. How unique is your offer versus competing offerings in the market, and how easy is it for potential competitors to copy you? (There are many hair salons but very few companies that offer private space travel.) Speed to Market. How soon can you create something to sell? (You can offer to mow a neighbor’s lawn in minutes; opening a bank can take years.) Up-front Investment. How much will you have to invest before you’re ready to sell? (To be a housekeeper, all you need is a set of inexpensive cleaning products. To mine for gold, you need millions to purchase land and excavating equipment.) Upsell Potential. Are there related secondary offers that you could also present to purchasing customers? (Customers who purchase razors need shaving cream and extra blades as well; buy a Frisbee and you won’t need another unless you lose it.) Evergreen Potential. Once the initial offer has been created, how much additional work will you have to put in in order to continue selling? (Business consulting requires ongoing work to get paid; a book can be produced once and then sold over and over as is.) When you’re done with your assessment, add up the score. If the score is 50 or below, move on to another idea—there are better places to invest your energy and resources. If the score is 75 or above, you have a very promising idea—full speed ahead. Anything between 50 and 75 has the potential to pay the bills but won’t be a home run without a huge investment of energy and resources.

Halo Effect Cisco, the Silicon Valley firm, was once a darling of the new economy. Business journalists gushed about its success in every discipline: its wonderful customer service, perfect strategy, skilful acquisitions, unique corporate culture and charismatic CEO. In March 2000, it was the most valuable company in the world. When Cisco’s stock plummeted 80% the following year, the journalists changed their tune. Suddenly the company’s competitive advantages were reframed as destructive shortcomings: poor customer service, a woolly strategy, clumsy acquisitions, a lame corporate culture and an insipid CEO. All this – and yet neither the strategy nor the CEO had changed. What had changed, in the wake of the dot-com crash, was demand for Cisco’s product – and that was through no fault of the firm. The halo effect occurs when a single aspect dazzles us and affects how we see the full picture. In the case of Cisco, its halo shone particularly bright. Journalists were astounded by its stock prices and assumed the entire business was just as brilliant – without making closer investigation. The halo effect always works the same way: we take a simple-to-obtain or remarkable fact or detail, such as a company’s financial situation, and extrapolate conclusions from there that are harder to nail down, such as the merit of its management or the feasibility of its strategy. We often ascribe success and superiority where little is due, such as when we favour products from a manufacturer simply because of its good reputation. Another example of the halo effect: we believe that CEOs who are successful in one industry will thrive in any sector – and furthermore that they are heroes in their private lives, too.

Suite 1500, 13450 102 Ave Surrey, BC V3T 5X3 604-581-7001 cbettencourt@mcquarrie.com Chris works with individuals and firms to provide legal advice and expertise for their real estate and business needs. He can plan and draft agreements relating to a wide variety of business and corporate transactions such as securing debt and the incorporation of companies. Chris acts for purchasers of businesses, helping to ensure that they begin their new venture with adequate protection. Chris is also experienced in the acquisition, development, and sale of residential and commercial real estate.

For the purpose of this discussion, it is useful to think about technology acquisitions in three categories: 1. Talent and/or technology, when a company is acquired purely for its technology and/or its people. These kinds of deals typically range between $5 million and $50 million. 2. Product, when a company is acquired for its product, but not its business. The acquirer plans to sell the product roughly as it is, but will do so primarily with its own sales and marketing capability. These kinds of deals typically range between $25 million and $250 million. 3. Business, when a company is acquired for its actual business (revenue and earnings). The acquirer values the entire operation (product, sales, and marketing), not just the people, technology, or products. These deals are typically valued (at least in part) by their financial metrics and can be extremely large (such as Microsoft’s $30 billion–plus offer for Yahoo).

Let’s look at the case of Opsware. Why did I sell Opsware? Another good question is why didn’t I sell Opsware until I did? At Opsware, we started in the server automation market. When we received our first inquiries and offers for the server automation company, we had fewer than fifty customers. I believed that there were at least ten thousand target customers and that we had a decent shot at being number one. In addition, although I knew the market would be redefined, I thought that we could expand to networks and storage (data center automation) faster than the competition and win that market as well. Therefore, assuming 30 percent market share, somebody would have had to pay sixty times what we were worth in forward credit to buy out our potential. You won’t be surprised to find that nobody was willing to pay that. Once we grew to several hundred customers and expanded into data center automation, we were still number one and were more valuable stand-alone than any of the prior acquisition offers. At that point both Opsware and our main competitor, BladeLogic, had developed into full-fledged companies (worldwide sales forces, built-out professional services, etc.). This was significant, because it meant that a large company could buy one of us and potentially execute successfully (big enterprise companies can’t generally succeed with small acquisitions, because too much of the important intellectual property is the sales methodology, and big companies can’t build that).

Interestingly, I see this same problem play out in many consumer Internet startups. I often see teams that maniacally focus on their metrics around customer acquisition and retention. This usually works well for customer acquisition, but not so well for retention. Why? For many products, metrics often describe the customer acquisition goal in enough detail to provide sufficient management guidance. In contrast, the metrics for customer retention do not provide enough color to be a complete management tool. As a result, many young companies overemphasize retention metrics and do not spend enough time going deep enough on the actual user experience. This generally results in a frantic numbers chase that does not end in a great product. It’s important to supplement a great product vision with a strong discipline around the metrics, but if you substitute metrics for product vision, you will not get what you want.

What could be the next steps in travel for Amazon? Very likely, acquisitions. Expedia stock value dropped from over 150$ to 110$ in one year and, with 1:14 stock ratio (Amazon stock reached an astonishing 1,400$), the acquisition would give Bezos the technology and know-how necessary to forcefully enter the travel landscape and compete with Google. trivago is another possible choice: last June the German metasearch engine was worth over 20$ a share, over 3 times the current value (6$). And what about TripAdvisor? It may have found a new youth with the new feed-based design, but it is still worth half of what it used to be 4 years ago. All those investments would be possible for Amazon, a company with a capitalization of over 1,000 billion dollars

Finally, the legitimization of the corporate holding company [1890] established a business structure that lessened the threat of competition by allowing for the elimination of competitors. The merger movement followed and horizontal combinations of productive capability reorganized industry into large blocks of corporate power.

Their leadership team recognized how amazing this sales productivity number was to the company and ultimately to one of the factors that led to the acquisition by Verizon. I love this quote from Kelly: “We could close deals faster and bigger than our competition.” What sales leader, salesperson, sales manager, or chief executive officer does not want this too?

Data is the lifeblood of decision making for any company, but it is particularly fundamental if it informs the design of your product, or if acquisition marketing is your key distribution strategy.

Here’s something you may not know: every time you go to Facebook or ESPN.com or wherever, you’re unleashing a mad scramble of money, data, and pixels that involves undersea fiber-optic cables, the world’s best database technologies, and everything that is known about you by greedy strangers. Every. Single. Time. The magic of how this happens is called “real-time bidding” (RTB) exchanges, and we’ll get into the technical details before long. For now, imagine that every time you go to CNN.com, it’s as though a new sell order for one share in your brain is transmitted to a stock exchange. Picture it: individual quanta of human attention sold, bit by bit, like so many million shares of General Motors stock, billions of times a day. Remember Spear, Leeds & Kellogg, Goldman Sachs’s old-school brokerage acquisition, and its disappearing (or disappeared) traders? The company went from hundreds of traders and two programmers to twenty programmers and two traders in a few years. That same process was just starting in the media world circa 2009, and is right now, in 2016, kicking into high gear. As part of that shift, one of the final paroxysms of wasted effort at Adchemy was taking place precisely in the RTB space. An engineer named Matthew McEachen, one of Adchemy’s best, and I built an RTB bidding engine that talked to Google’s huge ad exchange, the figurative New York Stock Exchange of media, and submitted bids and ads at speeds of upwards of one hundred thousand requests per second. We had been ordered to do so only to feed some bullshit line Murthy was laying on potential partners that we were a real-time ads-buying company. Like so much at Adchemy, that technology would be a throwaway, but the knowledge I gained there, from poring over Google’s RTB technical documentation and passing Google’s merciless integration tests with our code, would set me light-years ahead of the clueless product team at Facebook years later.

When we become an autonomous organization, we will be one of the largest unadulterated digital security organizations on the planet,” he told the annual Intel Security Focus meeting in Las Vegas. “Not only will we be one of the greatest, however, we will not rest until we achieve our goal of being the best,” said Young. This is the main focus since Intel reported on agreements to deactivate its security business as a free organization in association with the venture company TPG, five years after the acquisition of McAfee. Young focused on his vision of the new company, his roadmap to achieve that, the need for rapid innovation and the importance of collaboration between industries. “One of the things I love about this conference is that we all come together to find ways to win, to work together,” he said. First, Young highlighted the publication of the book The Second Economy: the race for trust, treasure and time in the war of cybersecurity. The main objective of the book is to help the information security officers (CISO) to communicate the battles that everyone faces in front of others in the c-suite. “So we can recruit them into our fight, we need to recruit others on our journey if we want to be successful,” he said. Challenging assumptions The book is also aimed at encouraging information security professionals to challenge their own assumptions. “I plan to send two copies of this book to the winner of the US presidential election, because cybersecurity is going to be one of the most important issues they could face,” said Young. “The book is about giving more people a vision of the dynamism of what we face in cybersecurity, which is why we have to continually challenge our assumptions,” he said. “That’s why we challenge our assumptions in the book, as well as our assumptions about what we do every day.” Young said Intel Security had asked thousands of customers to challenge the company’s assumptions in the last 18 months so that it could improve. “This week, we are going to bring many of those comments to life in delivering a lot of innovation throughout our portfolio,” he said. Then, Young used a video to underscore the message that the McAfee brand is based on the belief that there is power to work together, and that no person, product or organization can provide total security. By allowing protection, detection and correction to work together, the company believes it can react to cyber threats more quickly. By linking products from different suppliers to work together, the company believes that network security improves. By bringing together companies to share intelligence on threats, you can find better ways to protect each other. The company said that cyber crime is the biggest challenge of the digital era, and this can only be overcome by working together. Revealed a new slogan: “Together is power”. The video also revealed the logo of the new independent company, which Young called a symbol of its new beginning and a visual representation of what is essential to the company’s strategy. “The shield means defense, and the two intertwined components are a symbol of the union that we are in the industry,” he said. “The color red is a callback to our legacy in the industry.” Three main reasons for independence According to Young, there are three main reasons behind the decision to become an independent company. First of all, it should focus entirely on enterprise-level cybersecurity, solve customers ‘cybersecurity problems and address clients’ cybersecurity challenges. The second is innovation. “Because we are committed and dedicated to cybersecurity only at the company level, our innovation is focused on that,” said Young. Third is growth. “Our industry is moving faster than any other IT sub-segment, we have t

His order cited "credible evidence" that a takeover "threatens to impair the national security of the US".Qualcomm was already trying to fend off Broadcom's bid.The deal would have created the world's third-largest chipmaker behind Intel and Samsung.It would also have been the biggest takeover the technology koo50 sector had ever seen.The presidential order said: "The proposed takeover of Qualcomm by the Purchaser (Broadcom) is prohibited. and any substantially equivalent merger. acquisition. or takeover. whether effected directly or indirectly. is also prohibited."Crown jewelSome analysts said President Trump's decision was more about competitiveness and winning the race for 5G technology. than security concerns.The sector is in a race to develop chips for the latest 5G wireless technology. and Qualcomm was considered by Broadcom a significant asset in its bid to gain market share.Image captionQualcomm has already showcased 1Gbps mobile internet speeds using a 5G chip"Given the current political climate in the US and other regions around the world. everyone is taking a more conservative view on mergers and acquisitions and protecting their own domains." IDC's Mario Morales. vice president of enabling technologies and semiconductors told the BBC."We are all at the start of a race. and you have 5G as a crown jewel that everyone wants to participate in - and every region is racing towards that." he said."We don't want to hinder someone like Qualcomm so that they can't provide the technology to the vendors that are competing within that space."US investigates Broadcom's Qualcomm bidQualcomm rejects Broadcom takeover bidHuawei's US smartphone deal collapsesSingapore-based Broadcom had been pursuing San Diego-based Qualcomm for about four months.Last week however. Broadcom's hostile takeover bid was put under investigation by the Committee on Foreign Investment in the US. a multi-agency led by the US Treasury Department.The US company had rejected approaches from its rival on the grounds that the offer undervalued the business. and also that any takeover would face antitrust hurdles.Earlier this year. Chinese telecoms giant Huawei said it had not been able to strike a deal to sell its new smartphone via a US carrier. widely believed to be AT&T.The US also recently blocked the $1.2bn sale of money transfer firm Moneygram to China's Ant Financial. the digital payments arm of Alibaba.

This is a summary of the negotiated sale approach: 1. Package the company. Identify and describe the company’s strengths clearly and accurately, both in the descriptive memorandum and in phone calls, e-mails, and meetings. 2. Identify and contact all the potential buyers. Employ discipline and creativity in pursuing more than just the likely buyers. 3. Execute a disciplined process for following up and moving the buyers forward. 4. Negotiate by understanding the strategic implications of the acquisition for each buyer. 5. Endeavor to get multiple offers at the same point in time. Take the highest offer. Package

creating a company for acquisition or IPO is different from building a profitable enterprise; it’s about building a sellable enterprise. Startups are not trying to earn revenue (which is a liability); they are setting themselves up to win more capital. They are not part of the real economy or even the real world but part of the process through which working assets are converted into new stockpiles of dead ones. That’s all they have really accomplished with whatever digital fad they’ve foisted onto the market or sold to yesterday’s tech winners. They thought they were engineering a new technology, when they were actually engineering a reallocation of capital. That’s why digital entrepreneurs who do win often end up becoming the next generation of venture capitalists. Everyone from Marc Andreessen (Netscape) to Sean Parker (Napster) to Peter Thiel (PayPal) to Jack Dorsey (Twitter) now runs venture funds of his own. Facebook and Google, once startups themselves, now acquire more businesses than they incubate internally. With each new generation, firms and investors leverage the startup economy more deliberately, or even cynically. After all, a win is a win.

Procter & Gamble, America’s largest FMCG company, announced the acquisition of Gillette. Both companies had decades of success developing technologically advanced products and building enviable mindspace positions, yet these were no longer enough to guarantee their desired shelfspace. They realised the only way to compete with the retailers was to become big enough to matter to them.

Publicly traded companies die through acquisitions, mergers, and bankruptcies at the same rate regardless of how well established they are or what they actually do. The

Many technology companies prioritize acquisition targets based on how well they are integrated with their existing API.

Job Acquisition The entire job-acquisition process—considering job prospects, your personal and professional preparation, creating a resume, going on a job interview—depends for success upon possessing social skills and managing anxiety. How you adapt to the stress of this process can play a major role. As with other aspects of interaction, anxiety can often keep you from getting the jobs you really want and would be well suited for. If you allow your anxiety to control you, you may avoid applying for a new position because you fear rejection. Or you may let the fear of failure keep you from accepting a new challenge, no matter how badly you would like to take the job. But let’s look first at the job process and consider self-help techniques that will lead to a more rewarding, productive career. For people with social anxiety, low self-esteem is often a stumbling block to fulfillment in their careers: If you feel you are underqualified, you may hesitate to seek challenges, whether in a new company or within your current one. I have worked with several men who say their self-esteem is low because they are not the stereotype of success: They do not wear a suit, carry a briefcase, or drive the latest-model car. In their minds, this is the most important measure of success. But they themselves are not failures. One of the men I can think of is a successful plumber, another has a telephone sales job, and a third manages a large warehouse. Still, they have doubts about their appeal to women because of their career choices; increasing their self-esteem will help them to see themselves in a new way. Success need not be defined by media standards such as the right clothes or an expensive automobile. Everyone is different. Your personal success can only be measured by your own personal fulfillment and productivity.

Acquisition opportunities tend to emerge spontaneously, the result of changes in management at a target company, the actions of a competitor, or some other unpredictable event.

Peter Drucker once observed that the drive for mergers and acquisitions comes less from sound reasoning and more from the fact that doing deals is a much more exciting way to spend your day than doing actual work.

using money as a “neutral indicator of value”—a way of determining whether or not you have enough career capital to succeed with a pursuit. I called this the law of financial viability, and concluded that it’s a critical tool for navigating your own acquisition of control. This holds whether you are pondering an entrepreneurial venture or a new role within an established company. Unless people are willing to pay you, it’s not an idea you’re ready to go after.

May 2001, the Harvard Business Review published an article by Neil Churchill and John Mullins, titled “How Fast Can Your Company Afford to Grow?

Most buyers will go in aloof and reserved. They’ll shoot down ideas and inject cautionary responses at opportune times. They act like a conservative investor who must be convinced to be brought to the table, and if they do, their actions warn, it’s going to be hardball. This is not a trust but verify approach. It’s a prove it and then I’ll consider trusting you approach. There is a time to be a conservative investor during this process. This book, however, is not about how to become a conservative investor; it’s about acquisition entrepreneurship. Any acquisition will obviously include volumes of cautious investing analysis. Buying your first business is usually the largest investment you’ve ever made in your life and you will research accordingly. If there are snakes in the bushes, you will simply walk away later. The best buyers, however, understand that they too are entrepreneurs, just like the seller. The transaction will be completed within a few months after meeting the seller and then the buyer will be in the driver’s seat for the next four to forty years. Acting like an entrepreneur and not a venture capitalist during the interactions with the seller is the key to winning the seller over, getting the best deal outcome later, and behaving like the new CEO of the company—which you may or may not be, but that will be up to you and not them if you play your cards right.

I encourage you to treat this first meeting like a job interview, where you are interviewing to be the CEO of the seller’s company. Remember, having the right attitude is a critical component of the CEO mindset. It is here where it will start to move from theory to action. Be respectful and polite. Thank them for taking the time to meet with you and let them know you are interested in their opportunity. Give a history of your background, highlighting relevant accomplishments. Explain why you’re actively on the search, that you have a process, that you have taken the time to meet with banks and have arranged access to enough capital, and that you are committed to finding the right business in a certain timeframe. Compliment them by complimenting the business. Do this by highlighting a few characteristics that draw your interest to the company.

After twelve months of going nowhere, the investment committee loses patience and takes over the deal more directly. Organic is sold to a special-purpose acquisition company (or SPAC) listed on local stock exchanges. A SPAC is a cash box with a blank check raised from investors to buy a business within a set timeframe as determined by the executives who run the vehicle. Often, as the vehicle is publicly listed, a SPAC can strike a deal at a higher purchase price than a private equity firm would be willing to pay. Its investors will accept a lower return than they would from a private equity fund, often because the investment is marketed to them as a safer or more straightforward bet. In this case, the SPAC is run by a former senior executive of a French food retail chain and a major hedge fund seeking to expand into the private equity industry. Their joint sector and finance experience is convincing enough for the SPAC’s investors to agree that the transaction is likely to be worthwhile. The

but the truth is that comparing what private equity firms used to be—and where the perception of private equity still sits in many quarters—to what they are now is like comparing a Motorola cellphone from the 1990s to the latest iPhone. There’s a world of differences; it’s not even close. For pension funds and other investors in private equity funds, the firms they back gives them access to investment opportunities they can’t find or execute themselves. What’s more, they get consistent investment returns out of these opportunities, whether they include leveraged buyouts, credit investments, infrastructure assets, essential utilities, real estate transactions, technology deals, natural resources projects, banks, insurance companies, or life science opportunities. They can buy companies, carve out businesses, build up companies through acquisitions and organic growth, spin off businesses, take companies private from the public market, buy businesses from other funds they manage, draw margin loans to finance dividends, and refinance the capital structure pre-exit. And more besides.

As I near the end of all of that and think back on what I’ve learned, these are the ten principles that strike me as necessary to true leadership. I hope they’ll serve you as well as they’ve served me. Optimism. One of the most important qualities of a good leader is optimism, a pragmatic enthusiasm for what can be achieved. Even in the face of difficult choices and less than ideal outcomes, an optimistic leader does not yield to pessimism. Simply put, people are not motivated or energized by pessimists. Courage. The foundation of risk-taking is courage, and in ever-changing, disrupted businesses, risk-taking is essential, innovation is vital, and true innovation occurs only when people have courage. This is true of acquisitions, investments, and capital allocations, and it particularly applies to creative decisions. Fear of failure destroys creativity. Focus. Allocating time, energy, and resources to the strategies, problems, and projects that are of highest importance and value is extremely important, and it’s imperative to communicate your priorities clearly and often. Decisiveness. All decisions, no matter how difficult, can and should be made in a timely way. Leaders must encourage a diversity of opinion balanced with the need to make and implement decisions. Chronic indecision is not only inefficient and counterproductive, but it is deeply corrosive to morale. Curiosity. A deep and abiding curiosity enables the discovery of new people, places, and ideas, as well as an awareness and an understanding of the marketplace and its changing dynamics. The path to innovation begins with curiosity. Fairness. Strong leadership embodies the fair and decent treatment of people. Empathy is essential, as is accessibility. People committing honest mistakes deserve second chances, and judging people too harshly generates fear and anxiety, which discourage communication and innovation. Nothing is worse to an organization than a culture of fear. Thoughtfulness. Thoughtfulness is one of the most underrated elements of good leadership. It is the process of gaining knowledge, so an opinion rendered or decision made is more credible and more likely to be correct. It’s simply about taking the time to develop informed opinions. Authenticity. Be genuine. Be honest. Don’t fake anything. Truth and authenticity breed respect and trust. The Relentless Pursuit of Perfection. This doesn’t mean perfectionism at all costs, but it does mean a refusal to accept mediocrity or make excuses for something being “good enough.” If you believe that something can be made better, put in the effort to do it. If you’re in the business of making things, be in the business of making things great. Integrity. Nothing is more important than the quality and integrity of an organization’s people and its product. A company’s success depends on setting high ethical standards for all things, big and small. Another way of saying this is: The way you do anything is the way you do everything.

Let them know that you are committed to buying a company within six months. Remember, you’re trying to recruit their help and you need to fill them with confidence that you are worth them spending time on. The conviction of a timeline is something they rarely see—especially on a first meeting

General Electric was the largest company in the world in 2004, worth a third of a trillion dollars. It had either been first or second each year for the previous decade, capitalism’s shining example of corporate aristocracy. Then everything fell to pieces. The 2008 financial crisis sent GE’s financing division—which supplied more than half the company’s profits—into chaos. It was eventually sold for scrap. Subsequent bets in oil and energy were disasters, resulting in billions in writeoffs. GE stock fell from $40 in 2007 to $7 by 2018. Blame placed on CEO Jeff Immelt—who ran the company since 2001—was immediate and harsh. He was criticized for his leadership, his acquisitions, cutting the dividend, laying off workers and—of course—the plunging stock price. Rightly so: those rewarded with dynastic wealth when times are good hold the burden of responsibility when the tide goes out. He stepped down in 2017. But Immelt said something insightful on his way out. Responding to critics who said his actions were wrong and what he should have done was obvious, Immelt told his successor, “Every job looks easy when you’re not the one doing it.

Our flexibility in capital allocation – our willingness to invest large sums passively in non-controlled businesses – gives us a significant advantage over companies that limit themselves to acquisitions they can operate. Woody Allen stated the general idea when he said: “The advantage of being bi-sexual is that it doubles your chances for a date on Saturday night.” Similarly, our appetite for either operating businesses or passive investments doubles our chances of finding sensible uses for our endless gusher of cash.

What happens if you build your business without ever thinking about your purpose? What if you’d rather focus exclusively on acquisition and higher profits? Those activities can definitely seem more rewarding. But the more we busy ourselves with work and fail to consider why we’re doing it in the first place, the more likely we are to realize (often far too late) that we’re not enjoying what we’ve worked so hard to build.

Startup Metrics for Pirates,” where he came up with a general approach to metrics for an entire product, called AARRR metrics—although he put it together for startups, where the success of a company depends on one product, it’s useful for any product. The acronym stands for the following: Acquisition: How the user comes to your product. Activation: The user’s first visit to your product and her first happy experience. Retention: The user liked your product enough to use it again (and hopefully again and again…). Referral: The user likes it enough to tell someone about it. Revenue: The user finds your product valuable enough that she pays for it.

The likes of you and I cannot “give” to the federal government, as under the Federal Acquisition Regulations this is considered to be a risk for exerting undue influence. But the CDC has established a nonprofit “CDC Foundation.” According to the CDC’s own website [419]: Established by Congress as an independent, nonprofit organization, the CDC Foundation is the sole entity authorized by Congress to mobilize philanthropic partners and private-sector resources to support CDC’s critical health protection mission. Likewise, the NIH has established the “Foundation for the National Institutes of Health,” currently headed by CEO Dr. Julie Gerberding (formerly CDC director, then president of Merck Vaccines, then chief patient officer and executive vice president, Population Health & Sustainability at Merck and Company—where she had responsibility for Merck’s ESG score compliance). Dr. Gerberding’s career provides a case history illustrating the ties between the administrative state and corporate America.

The likes of you and I cannot “give” to the federal government, as under the Federal Acquisition Regulations this is considered to be a risk for exerting undue influence. But the CDC has established a nonprofit “CDC Foundation.” According to the CDC’s own website [419]: Established by Congress as an independent, nonprofit organization, the CDC Foundation is the sole entity authorized by Congress to mobilize philanthropic partners and private-sector resources to support CDC’s critical health protection mission. Likewise, the NIH has established the “Foundation for the National Institutes of Health,” currently headed by CEO Dr. Julie Gerberding (formerly CDC director, then president of Merck Vaccines, then chief patient officer and executive vice president, Population Health & Sustainability at Merck and Company—where she had responsibility for Merck’s ESG score compliance). Dr. Gerberding’s career provides a case history illustrating the ties between the administrative state and corporate America. These congressionally chartered nonprofit organizations provide a vehicle whereby the medical-pharmaceutical complex can funnel money into the NIH and CDC to influence both research agendas and policies.

Companies only have to be “big enough,” which rarely means they have to dominate. Often “big enough” is just 10 percent of the market. Yet companies under the influence of winner-takes-all thinking tend to pursue illusory scale advantages. In doing so, they are likely to damage their own performance by cutting price to gain volume, by overextending themselves to serve all market segments, and by pursuing overpriced mergers and acquisitions.

comparison companies frequently tried to jump right to breakthrough via an acquisition or merger. It never worked. Often with their core business under siege, the comparison companies would dive into a big acquisition as a way to increase growth, diversify away their troubles, or make a CEO look good. Yet they never addressed the fundamental question: “What can we do better than any other company in the world, that fits our economic denominator and that we have passion for?” They never learned the simple truth that, while you can buy your way to growth, you absolutely cannot buy your way to greatness. Two big mediocrities joined together never make one great company.

The invention approach required the endurance to evaluate and discard many options and ideas. So, as we were considering which path to take—build or buy—we took countless meetings with different companies in the digital media business. In addition to enabling us to understand our options for potential acquisition, it was a productive way for us to get up to speed quickly on different aspects of the digital media business, as the founders and leaders of these companies shared their experience and insights from working on a variety of product challenges. In parallel, we were writing some of our first PR/FAQs for digital media products, which we would review and discuss with Jeff. The two processes reinforced one another, and by the end of 2004, our thinking and vision had become clearer. As

With the exception of Whole Foods, it doesn’t acquire big businesses in different industries and try to run them. Instead it organically builds businesses in new sectors, sometimes making a relatively small (under $1 billion each) strategic acquisition to acquire the talent or technology it needs to get its invasion armies rolling.

It is evident that our national economy in the United States (writ large as “globalization”), is largely in the hands of Pharaonic interests.[12] The acquisitive oligarchy now largely manages the government and controls the media. It has, moreover, supported a sustained process of deregulation alongside rigged credit laws, inequitable tax arrangements, and low wages that has resulted in a growing gap between a small party of “haves” and a large company of “have-nots” who are economically vulnerable and without leverage.

In the early 2000s, new malls were sprouting up all over São Paulo and Rio, and industry ownership, as I’ve mentioned, was highly fragmented. We partnered with a local private equity firm to create BR Malls as a growth platform in 2006, investing $86 million. Roughly a year later, we led BR Malls in an IPO on Brazil’s Bovespa at an equity valuation of roughly R$2.1 billion. The capital enabled BR Malls to lead the industry in acquisitions. Five years later, the company had nearly fifty malls. Total returns for public shareholders were over 26 percent, and BR Malls had an equity market cap of R$10.7 billion. By the time we fully exited the investment in 2010, BR Malls was the largest mall company in Brazil, and we had achieved a 4.2x multiple, or 48.6 percent IRR.

But by the end, we had raised over $1 billion. I think it was the largest fund of its kind at the time. We focused on turning around companies that had taken on excessive debt in the 1980s. We contributed our own capital in order to align our interests with those of our investors, and we didn’t charge fees on each acquisition like many leveraged-buyout firms did. Instead, we used the funds to share risk with our investors—and to share opportunities. We had a stated objective of holding our investments for ten to twelve years.

we banned the company from major acquisitions until it fixed its internal controls

The longer one owns the shares, however, the more important the firm’s underlying economics will be to performance results. Long-term investors therefore seek answers with shelf life. What is relevant today may need to be relevant in ten years’ time if the investor is to continue owning the shares. Information with a long shelf life is far more valuable than advance knowledge of next quarter’s earnings. We seek insights consistent with our holding period. These principally relate to capital allocation, which can be gleaned from examining the company’s advertising, marketing, research and development spending, capital expenditures, debt levels, share repurchase/ issuance, mergers and acquisitions and so forth.

Twitter was a potentially powerful platform for us, but I couldn’t get past the challenges that would come with it. The challenges and controversies were almost too much to list, but they included how to manage hate speech, and making fraught decisions regarding freedom of speech, what to do about fake accounts algorithmically spewing out political “messaging” to influence elections, and the general rage and lack of civility that was sometimes evident on the platform. Those would become our problems. They were so unlike any we’d encountered, and I felt they would be corrosive to the Disney brand. On the Sunday after the board had just given me the go-ahead to pursue the acquisition of Twitter, I sent a note to all of the members telling them I had “cold feet,” and explaining my reasoning for withdrawing. Then I called Jack Dorsey, Twitter’s CEO, who was also a member of the Disney board. Jack was stunned, but very polite. I wished Jack luck, and I hung up feeling relieved.

Defense companies spent less money on research and development and more on armies of lawyers, lobbyists, accountants, and consultants to help them comply with the Pentagon's growing acquisition bureaucracy and win more of the shrinking number of contracts.

The evidence of past mistakes was still everywhere in 2000. Koch Industries was still carrying the accumulated litter that was left behind by countless Value Creation Strategies, years of acquisitions, and rapid growth. As Koch reviewed its holdings, one executive described the corporate structure as representing a table piled high at a rummage sale, full of odds and ends that had no apparent rationale for belonging together. Koch began to unload these properties, selling off pipeline holdings like the Chase Transportation Company. It sold a chemical firm called Koch Microelectronic Service Company and closed down a new $30 million chemical plant in Bryan, Texas. Over a period of years, Koch would sell off thousands of miles of pipelines. The corporate odds and ends were discarded. The remaining businesses at Koch were restructured and streamlined. The most important division, Koch Petroleum, was renamed Flint Hills Resources and given new leaders. Other businesses were consolidated under a new, simplified structure that put them under the umbrella of a few new companies like Koch Minerals, Koch Supply & Trading, and Koch Chemical Technology Group.

After their trip to the Pink Palace, Hannan and his team agreed to buy Georgia-Pacific’s two major pulp mills. Koch Industries formed a new shell company, called Koch Cellulose LLC, which took possession of the two major pulp mills for $610 million.I This acquisition would have been among Koch’s biggest in the 1990s, but in 2003 it was just a down payment. Charles Koch favored a trading strategy that he called “experimental discovery.” It entailed making a small bet in a new market and seeing if the bet paid off. Even if a Koch trader lost money on the trade, they gained insight. If they made a profit, the bet could be expanded.

When he was put in charge of Koch’s development group, Brooks was given one of the most important jobs at the company. The development group would be an acquisition machine. It would work full-time to identify new companies for Koch to buy and new deals in which to invest. The group would formalize Sterling Varner’s instinct to scan the market for new opportunities. The development group was a central hub to which all Koch employees could send potential deals that they’d spotted. Senior managers in every division at Koch were taught to act like scouts in the marketplace, and when they found a deal that was large enough and promising enough, they passed it up the chain of command to the development group for approval.

The development group that Brad Hall oversaw resembled these private equity firms in some ways. But there was a fundamental difference. Koch’s development group had patience. It thought on a timeline of ten or twenty years, not twelve to eighteen months. And, unlike virtually any other private equity firm, Koch’s group had only two shareholders to answer to: Charles and David Koch. For these reasons, Koch made acquisitions like nobody else. It tended to rush into markets when others were leaving. It tended to buy companies only when they were distressed and no one else wanted them. Koch was accustomed to the wild volatility of energy markets, so the company knew that most downturns were temporary.

The Target Company Had to Be Distressed Koch was only interested in buying companies or assets that had fallen on hard times. Part of the logic behind this was simple: distressed companies were cheaper. They could be purchased at a discount. But the company had to be distressed in the right kind of way. Ideally, the firm should to be distressed because of managerial negligence or poor decision-making. That way, Koch could reverse the poor strategies when it was the owner. The goal was to improve operations and profits at the distressed firm to boost its value. When that happened, Koch could hold on to its new profit-making machine or sell it. 2. The Deal Had to Be a Long-Term Play Koch wasn’t looking to buy and flip companies. The deal needed to make sense over the five-, ten-, or even twenty-year time frame. This played to Koch’s advantage as a private firm. It could hold an asset through the stormy weather of commodities cycles, improving the underlying investments along the way until they were worth much more. This long-term strategy would open the door to a raft of acquisitions that other firms would not consider. Publicly traded firms, and even private hedge funds, looked for deals that showed a return within one to two years. Koch would face far less competition for the deals that paid off over many years later. 3. The Target Company Had to Fit with Koch’s Core Capabilities In the new era, Koch would stick to its knitting. It would expand into new industries only if the new line of business closely resembled something Koch already did. If Koch didn’t know how to do a certain business process better than its competitors, then it would stay out of that business. New acquisitions had to build on Koch’s expertise and had to branch out from the company’s current strength.

To acquire Georgia-Pacific, we took it deep into debt—to the point where unless performance improved, Georgia-Pacific would be in violation of its loan covenants,” Charles Koch later wrote. Now debt became a virtue rather than a burden, a force that established motivation and self-sacrifice among those who carried it. Koch Industries announced its plan to take Georgia-Pacific private in mid-November of 2005. The deal made Koch the largest privately held company in the nation.III Koch would be adding fifty-five thousand new employees to its workforce of thirty-three thousand, more than doubling the company in size once again. Jim Hannan was quickly informed that his services were no longer needed at Invista. He would move to Atlanta and help Koch absorb the largest acquisition in its history.

If Koch bought the Corpus Christi plant, Paulson realized, the acquisition would open up an entirely new market for the company: the market for paraxylene and other petrochemicals. And, true to Koch’s philosophy, the market would be new but not entirely foreign. Koch knew the petrochemical business already. It could apply the expertise developed at Pine Bend to manufacturing paraxylene in Texas. On top of all of this, it appeared to Paulson and others that Sun Oil wasn’t aware of the opportunity it was missing in Corpus Christi. Sun was making and selling paraxylene but not at nearly the levels that it could. In September of 1981 Koch Industries paid $265 million in cash for the refinery, and Paulson immediately started expanding it. He more than doubled its paraxylene output. He bought a used hydrocracking tower from a refinery in Europe and had it shipped to Texas, bragging to Charles Koch that he bought the tower for 40 percent of what it would cost “off the shelf.” Koch Industries became one of the largest paraxylene producers in the United States.

In late 2000, a group of IBP managers decided they wanted to take the company private by buying it from its public shareholders. The managers put together a bid with a private investment company and presented it to IBP’s board of directors. Smithfield heard about the deal and decided to make a bid of its own. IBP had become the nation’s second-biggest pork producer. If Smithfield bought IBP, it would be the indomitable leader of beef and pork production, boxing Tyson into the chicken business alone. It seemed inevitable that, one day, the company would buy Tyson as well. Only the biggest could survive. Johnny decided he wasn’t going to let that happen. Tyson Foods would buy IBP. The company would have to borrow billions to do it and it would need to pony up a huge portion of the company’s stock. Johnny would be mortgaging everything his father and his grandfather had built. It was the riskiest acquisition the company had ever contemplated. Everyone around him realized that when Johnny looked at IBP, he finally had his vision. Don Tyson thought the IBP acquisition was a bad idea. The company had been burned during the 1990s for straying outside the chicken industry and trying to buy its way into markets it couldn’t control and that didn’t fit with its primary strategy of vertical integration. Buying IBP would overshadow the chicken operations of Tyson Foods and saddle the company with cattle and pork businesses that Tyson executives poorly understood.

P&R acquired Union Underwear for $15 million. The deal was a big swing for P&R, with the purchase price equal to 35% of its beginning-of-the-year assets. But beneath the big headline number, there were several factors that reduced risk. The deal was done at a salivating valuation: Union was earning $3 million in pre-tax profits—one-fifth of the purchase price—that would be partially sheltered by P&R’s tax loss. Moreover, P&R structured the compensation of Union’s management in an attractive manner: The company provided Goldfarb with a five-year management contract as well as a bonus of 10% of the subsidiary’s operating profits (subject to both a minimum and a cap), ensuring he stayed on and incentivizing him to grow the business.160 Finally, the deal’s consideration was also interesting, which Buffett later reminisced about in the 2001 Berkshire Hathaway chairman’s letter: The [Union Underwear] company possessed $5 million in cash—$2.5 million of which P&R used for the purchase—and was earning about $3 million pre-tax, earnings that could be sheltered by the tax position of P&R. And, oh yes: Fully $9 million of the remaining $12.5 million due was satisfied by non-interest-bearing notes, payable from 50% of any earnings Union had in excess of $1 million. (Those were the days; I get goosebumps just thinking about such deals.)161 Although the P&R board had approved the Union acquisition, Ben Graham was angered by its conservatism and pushed to add more directors. The other members obliged, ceding five additional seats to Graham allies. Jack Goldfarb and Louis Green of Stryker & Brown—the same Louis Green from the Marshall-Wells chapter—were among those added.

Given the specialized niche and deal size, there is scant competition in this acquisition market, enabling Essilor to purchase companies on attractive terms (such as six to seven times cash flow). This ability to systematically improve the operations of acquired businesses is rare but can create significant value.

Making a small acquisition can be an excellent strategy for an acquirer to gain a foothold in a niche market, gain new customers and new talent, acquire new capabilities and technologies, and serve as a platform to build upon. Small acquisitions are less expensive, easier to integrate, and often simpler to transact than large acquisitions. A

Market view analysis generally includes a series of components: ·      Market focus ·      Size of your market and its anticipated growth rate ·      Overview of your company’s current market position ·      Description of the market segments you serve ·      Matrix of your top competitors by market segment ·      More detailed breakdown of the competitors ·      Overview of your current position with a focus on possible market opportunities ·      Buy-versus-build opportunities ·      Possible acquisition candidates ·      List of risks and contingencies ·      Potential competitive movements ·      Deep dives into specific competitors

Google’s acquisition of an R & D company closely linked to the military instigated a round of speculation. Many suggested that Google, having bought a military robotics firm, might become a weapons maker. Nothing could have been further from the truth. In his discussions with the technologists at the companies he was acquiring, Rubin sketched out a vision of robots that would safely complete tasks performed by delivery workers at UPS and FedEx.

Each man’s place in the company hierarchy, perhaps painfully won over many years, became meaningless if his new super boss, the conglomerator, didn’t see things his way. Robert Metz told in The New York Times about an executive of an acquired company who observed that he and his colleagues had been given what he called the “mushroom treatment”: “Right after the acquisition, we were kept in the dark. Then they covered us with manure. Later they cultivated us. After that, they let us stew for a while. And, finally, they canned us.

Understandably, given public anger at bailouts, support had been gathering from both the right and the left for breaking up the largest institutions. There were also calls to reinstate the Depression-era Glass-Steagall law, which Congress had repealed in 1999. Glass-Steagall had prohibited the combination within a single firm of commercial banking (mortgage and business lending, for example) and investment banking (such as bond underwriting). The repeal of Glass-Steagall had opened the door to the creation of “financial supermarkets,” large and complex firms that offered both commercial and investment banking services. The lack of a new Glass-Steagall provision in the administration’s plan seemed to me particularly easy to defend. A Glass-Steagall–type statute would have offered little benefit during the crisis—and in fact would have prevented the acquisition of Bear Stearns by JPMorgan and of Merrill Lynch by Bank of America, steps that helped stabilize the two endangered investment banks. More importantly, most of the institutions that became emblematic of the crisis would have faced similar problems even if Glass-Steagall had remained in effect. Wachovia and Washington Mutual, by and large, got into trouble the same way banks had gotten into trouble for generations—by making bad loans. On the other hand, Bear Stearns and Lehman Brothers were traditional Wall Street investment firms with minimal involvement in commercial banking. Glass-Steagall would not have meaningfully changed the permissible activities of any of these firms. An exception, perhaps, was Citigroup—the banking, securities, and insurance conglomerate whose formation in 1998 had lent impetus to the repeal of Glass-Steagall. With that law still in place, Citi likely could not have become as large and complex as it did. I agreed with the administration’s decision not to revive Glass-Steagall. The decision not to propose breaking up some of the largest institutions seemed to me a closer call. The truth is that we don’t have a very good understanding of the economic benefits of size in banking. No doubt, the largest firms’ profitability is enhanced to some degree by their political influence and markets’ perception that the government will protect them from collapse, which gives them an advantage over smaller firms. And a firm’s size contributes to the risk that it poses to the financial system. But surely size also has a positive economic value—for example, in the ability of a large firm to offer a wide range of services or to operate at sufficient scale to efficiently serve global nonfinancial companies. Arbitrary limits on size would risk destroying that economic value while sending jobs and profits to foreign competitors. Moreover, the size of a financial firm is far from the only factor that determines whether it poses a systemic risk. For example, Bear Stearns, which was only a quarter the size of the firm that acquired it, JPMorgan Chase, wasn’t too big to fail; it was too interconnected to fail. And severe financial crises can occur even when most financial institutions are small.

Reich would soon back a request from Angelo Mozilo, Countrywide’s white-haired, unnaturally tanned CEO. Mozilo wanted an exemption from the Section 23A rules that prevented Countrywide’s holding company from tapping the discount window through a savings institution it owned. Sheila and the FDIC were justifiably skeptical, as was Janet Yellen at the Federal Reserve Bank of San Francisco, in whose district Countrywide’s headquarters were located. Lending indirectly to Countrywide would be risky. It might well already be insolvent and unable to pay us back. The day after the discount rate cut, Don Kohn relayed word that Janet was recommending a swift rejection of Mozilo’s request for a 23A exemption. She believed, Don said, that Mozilo “is in denial about the prospects for his company and it needs to be sold.” Countrywide found its reprieve in the form of a confidence-boosting $2 billion equity investment from Bank of America on August 22—not quite the sale that Janet thought was needed, but the first step toward an eventual acquisition by Bank of America. Countrywide formally withdrew its request for a 23A exemption on Thursday August 30 as I was flying to Jackson Hole, Wyoming, to speak at the Kansas City Fed’s annual economic symposium. The theme of the conference, chosen long before, was “Housing, Housing Finance, and Monetary Policy.

businesses. We will not make unrelated acquisitions. We will not do unrelated joint ventures. If it doesn’t fit, we don’t do it. Period.

Total Cost Analysis When the purchasing staff considers switching to a new supplier or consolidating its purchases with an existing one, it cannot evaluate the supplier based solely on its quoted price. Instead, it must also consider the total acquisition cost, which can in some cases exceed a product’s initial price. The total acquisition cost includes these items: • Material. The list price of the item being bought, less any rebates or discounts. • Freight. The cost of shipping from the supplier to the company. • Packaging. The company may specify special packaging, such as for quantities that differ from the supplier’s standards and for which the supplier charges an extra fee. • Tooling. If the supplier had to acquire special tooling in order to manufacture parts for the company, such as an injection mold, then it will charge through this cost, either as a lump sum or amortized over some predetermined unit volume. • Setup. If the setup for a production run is unusually lengthy or involves scrap, then the supplier may charge through the cost of the setup. • Warranty. If the product being purchased is to be retained by the company for a lengthy period of time, it may have to buy a warranty extension from the supplier. • Inventory. If there are long delays between when a company orders goods and when it receives them, then it must maintain a safety stock on hand to guard against stock-out conditions and support the cost of funds needed to maintain this stock. • Payment terms. If the supplier insists on rapid payment terms and the company’s own customers have longer payment terms, then the company must support the cost of funds for the period between when it pays the supplier and it is paid by its customers. • Currency used. If supplier payments are to be made in a different currency from the company’s home currency, then it must pay for a foreign exchange transaction and may also need to pay for a hedge, to guard against any unfavorable changes in the exchange rate prior to the scheduled payment date. These costs are only the ones directly associated with a product. In addition, there may be overhead costs related to dealing with a specific supplier (see “Sourcing Distance” later in the chapter), which can be allocated to all products purchased from that supplier.

I began shopping at the bankruptcy attorney’s office, or the courthouse steps. In these shopping places, a $75,000 house could sometimes be bought for $20,000 or less. For $2,000, which was loaned to me from a friend for 90 days for $200, I gave an attorney a cashier’s check as a down payment. While the acquisition was being processed, I ran an ad advertising a $75,000 house for only $60,000 and no money down. The phone rang hard and heavy. Prospective buyers were screened and once the property was legally mine, all the prospective buyers were allowed to look at the house. It was a feeding frenzy. The house sold in a few minutes. I asked for a $2,500 processing fee, which they gladly handed over, and the escrow and title company took over from there. I returned the $2,000 to my friend with an additional $200. He was happy, the home buyer was happy, the attorney was happy, and I was happy. I had sold a house for $60,000 that cost me $20,000. The $40,000 was created from money in my asset column in the form of a promissory note from the buyer. Total working time: five hours.

Don’t trust your own assumptions. Look at your company from functional angles. See where your resources are concentrated. See where your successes are concentrated. Ask informed and intelligent outsiders.

Siebel’s business development executive admitted that all of the company’s acquisitions have failed and noted that an internal study indicated that “cultural conflicts” were the cause in every case.5

A New Yorker by birth is David Karp, the child prodigy who at age 21, in 2007, founded Tumblr, whose headquarters are located just one block east of Hunch. The son of a composer and a science teacher, at 14 Karp began working as an intern in an online animation company; at 15, tired of traditional school, he continued to study at home alone, learning, among other things, Japanese; then he became the chief technology officer of the Internet site UrbanBaby and at 17 he went to Tokyo for five months by himself. In 2006, UrbanBaby was bought by CNET, and Karp used his share of proceeds to establish Tumblr, a blogging platform with elements of social networking that allows its users to follow other bloggers. Tumblr allows users to build a collection of content according to their own tastes and interests. Easy to use, with a format of short entries to be enriched with photos and videos, Tumblr has quickly gained many followers among the creative community as well as the public at large. Today it is home to nearly 70 million blogs, including those of Lady Gaga and Barack Obama, with a total audience of 140 million users. At 26, Karp is leading a company with over 100 employees, valued at more than $800 million, with shareholders of the caliber of Virgin Group’s Richard Branson. He defines Tumblr as new media, as opposed to technology, and seeks to attract non-traditional ads, inviting brands to create awareness and desire in their ads, rather than just trying to capture intent. Karp has already received several acquisition offers from other media groups, but he has always refused because he thinks big: he wants to reach billions, not millions of users and one day be in a position to acquire rather than be acquired. Meanwhile, in order to grow he is convinced that New York City, the capital of media and advertising, is the right city.[47]

the group existed, these six had been accumulating shares in key industries such as communications, transport, banking, pharmaceutical, medical, technology and other key industries worldwide. They were shrewd enough to hide what they were doing – very seldom would they buy controlling shares, and never in their personal names. Instead, the acquisitions were always through companies that owned companies that owned yet more companies - hiding themselves five, six or more levels away from the front, the public eye and any security screens.

Labor and employment firm Fisher & Phillips LLP opened a Seattle office by poaching partner Davis Bae from labor and employment competitor Jackson Lewis PC. Mr. Bea, an immigration specialist, will lead the office, which also includes new partners Nick Beermann and Catharine Morisset and one other lawyer. Fisher & Phillips has 31 offices around the country. Sara Randazzo LAW Cadwalader Hires New Partner as It Looks to Represent Activist Investors By Liz Hoffman and David Benoit | 698 words One of America’s oldest corporate law firms is diving into the business of representing activist investors, betting that these agitators are going mainstream—and offer a lucrative business opportunity for advisers. Cadwalader, Wickersham & Taft LLP has hired a new partner, Richard Brand, whose biggest clients include William Ackman’s Pershing Square Capital Management LP, among other activist investors. Mr. Brand, 35 years old, advised Pershing Square on its campaign at Allergan Inc. last year and a board coup at Canadian Pacific Railway Ltd. in 2012. He has also defended companies against activists and has worked on mergers-and-acquisitions deals. His hiring, from Kirkland & Ellis LLP, is a notable step by a major law firm to commit to representing activists, and to do so while still aiming to retain corporate clients. Founded in 1792, Cadwalader for decades has catered to big companies and banks, but going forward will also seek out work from hedge funds including Pershing Square and Sachem Head Capital Management LP, a Pershing Square spinout and another client of Mr. Brand’s. To date, few major law firms or Wall Street banks have tried to represent both corporations and activist investors, who generally take positions in companies and push for changes to drive up share prices. Most big law firms instead cater exclusively to companies, worried that lining up with activists will offend or scare off executives or create conflicts that could jeopardize future assignments. Some are dabbling in both camps. Paul, Weiss, Rifkind, Wharton & Garrison LLP, for example, represented Trian Fund Management LP in its recent proxy fight at DuPont Co. and also is steering Time Warner Cable Inc.’s pending sale to Charter Communications Inc. Willkie Farr & Gallagher LLP and Gibson, Dunn & Crutcher LLP have done work for activist firm Third Point LLC. But most firms are more monogamous. Those on one end, most vocally Wachtell, Lipton, Rosen & Katz, defend management, while a small band including Schulte Roth & Zabel LLP and Olshan Frome Wolosky LLP primarily represent activists. In embracing activist work, Cadwalader thinks it can serve both groups better, said Christopher Cox, chairman of the firm’s corporate group. “Traditional M&A and activism are becoming increasingly intertwined,” Mr. Cox said in an interview. “To be able to bring that perspective to the boardroom is a huge advantage. And when a threat does emerge, who’s better to defend a company than someone who’s seen it from the other side?” Mr. Cox said Cadwalader has been thinking about branching out into activism since late last year. The firm is also working with an activist fund launched earlier this year by Cadwalader’s former head of M&A, Jim Woolery, that hopes to take a friendlier stance toward companies. Mr. Cox also said he believes activism can be lucrative, pooh-poohing another reason some big law firms eschew such assignments—namely, that they don’t pay as well as, say, a large merger deal. “There is real money in activism today,” said Robert Jackson, a former lawyer at Wachtell and the U.S. Treasury Department who now teaches at Columbia University and who also notes that advising activists can generate regulatory work. “Law firms are businesses, and taking the stance that you’ll never, ever, ever represent an activist is a financial luxury that only a few firms have.” To be sure, the handful of law firms that work for both sides say they do so

Senior executives love the strategy layer. And why not? Strategy is fun! It's fun to make declarations like, "We're one global company now! We've grown for one hundred years through acquisition, we run under the tyranny of the P&L, we've been fully organized by regions, but we're one global company now!"1 But the operating layer? Not so much. The