Building your M&A Muscle

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Doing great Kisan. Thanks for having me on.

Hey, thanks for taking a break from doing deals to have this conversation. Can we kick things off a little bit about your background?

I had a somewhat traditional background before moving on to Corp Dev. So I started off in investment banking where I worked for a few different firms and was exposed to a broad range of deals and industries from raising private equity and doing debt and public offerings like IPOs follow ons as well as buy side and sell side M and A. I went on to private equity working for a fast paced middle market private equity fund and closed a lot of deals of a bunch of different funds that we managed. Worked on a lot of different industries, media, entertainment, specialty manufacturing, franchise businesses, casinos gaming. So it was exposed to a broad range of industries. One of the things that I really enjoyed about PE was partnering with our management teams and working with them to develop like a post acquisition growth strategy. We'd always focus on that of course as investors and making sure our investment works out and sometimes that strategy was pretty clear and built out by the management teams and sometimes we needed to lean in more and just formalize it with the teams. And I just loved watching the management put those strategies into place and in action and ultimately get rewarded for the work that they've done in executing those strategies. And so I came to the just conclusion that's what I wanted to do. I wanted to work in a private equity owned environment at a company in a strategic role and especially if the large part of that investment strategy and growth was involved M and A. And so that's where I've spent the last about a decade of my career.

You hit the full evolution from investment banking and private equity to corporate development.

I love where I'm at right now. It's been great to build out a new strategy for a company that is a leading player in its space that hadn't traditionally done M and A and now it's part of our overall growth strategy and focus for us.

What would you say are the skills that are different between the roles? When you went from IB to pe, then PE to Corp to once you.

Go work at a company you really have to Learn how to work cross functionally and understand the various functional experts and leverage leverage their skill set to bring that to the table to evaluate deals. And of course, once you acquire a company, especially if it's a larger, more transformative deal, you really need to have that buy in amongst the key functional leaders to make sure that the acquisition and the strategy and the integration goes smoothly and well.

You got a lot more moving parts internally you got to deal with than leveraging your internal SMEs.

Yeah, absolutely. Just building those relationships and partnerships with people and it helps with everything for your what you're doing at the company. It helps with your growth strategy, helps with your focus, helps identify new opportunities and potential pipeline for M and A or partnership. It really is a cross functional partnership with the leaders that you have to ensure that you have the good relationships with the functions to make sure the M and A deals are successful.

Team effort. Now you built a M and A function from scratch at Cast and Crew.

Yes.

What prompted you to build a function?

I was brought in by one of our private equity sponsors at the time. This was seven years ago or so when I joined. It was just a key piece of the investment thesis for the private equity sponsor that there was a big opportunity in the space. I think our management team all thought that and we just hadn't traditionally focused on that and we just wanted to see if we could diversify the end markets that we're in a little bit more both domestically and internationally. And also the overall end market that we're in. We were in a few pieces of entertainment, film, television streaming and we wanted to get into other entertainment end markets as well. And so that was a big growth mandate that we wanted to go and execute.

Okay, so part of the PE strategy, they brought you in. What'd that look like? How'd they explain this to you? We're bringing you in and we're planning to do a bunch of deals. And you're going to run all this?

Yeah, started with the top. You develop your kind of overall growth strategy first and where you really want to go in the next several years. We work together as a team to go out and map that out and what that would look like. M and A was a key enabler of how we go execute that. Once we said, okay, these are the opportunities that we want to go after, we can narrow down where our focus is from an acquisition standpoint and strategy. You will really want to align your M and A strategy with the overall company objectives and growth strategy and then you can consensus and Alignment on that strategy so you can prioritize it across the right functions.

Overall growth strategy allowed you to shape your M and A strategy, then it sounds like you developed a pipeline.

Yeah. And if you're doing this in broadly speaking, you just need to think about, okay, what are the key goals do you want to achieve? Do you want to diversify the end markets you're in? Are you filling a product gap? Does your company need to address a competitive threat? All of this will help narrow down and then help you just with key evaluation criteria for each opportunity and help you build your pipelines. You think about, okay, how well does the company fit in or enhance your company's overall solution? Are there cross sell opportunities? How close to the core is it? What is the integration going to look like? Those are key questions and things that can help narrow your pipeline once you have that strategy in focus.

Okay, how many deals did the company do prior to you getting there? And then how many acquisitions have you done to date Post joining M and.

A was new for us when I joined and we've closed nine deals in the last seven or so years that range on size and kind of fit and type of deals. So we've done smaller kind of product tuck ins and aqua hires to larger, more transformative type deals. But we hadn't done any M and A prior to me joining.

Okay, so really did all this from scratch.

We evaluate a lot more opportunities as well. We just, we typically try to close one to two deals a year. It's just based on the types of deals that we're looking for.

Let's break this down. I want to get my little steps on how to do this here. So where did you start? It sounds like you got into it. You started with getting on the same page about the growth strategy, the M and A strategy and then the pipeline. Do we miss anything there?

You really have to determine with the team what is the growth of this company look like and what are the key growth priorities that you want to achieve short term and long term goals. For us, we really wanted to diversify the entertainment end markets that we're in as an example. Okay, how do we go do that? What can we do organically? What would it take from a product standpoint for us to go do that? Would we be able to accelerate that through M and A, which is where we ended up focusing on all of those questions need to be answered and at least discussed as a team in the best case scenario. You have alignment on. Okay, now we have alignment on where we want to take this over the next several years and then we can say, okay, let's have this team focus on these specific areas. My team at corporate development was tasked with, okay, let's go find acquisition opportunities in these specific markets or filling these product gaps for us that we think that we need to fill. And in doing that, you can have a multi pronged approach to get to where you want to be. Because M and A is not always going to be there. It's hard to go identify companies. Some companies may not be for sale. So you really have to start getting out there and building relationships and finding the targets and starting to see if you can evaluate them and how good of a fit they're going to be. Do you have the right teams that you would have or are you going to have to go and add to that team to really make it successful? Deals come up, whether they're in banked or sale processes that you may not be ready for, but it's a good opportunity and you have to just go out and do it. I've been in a good position, lucky position, where we haven't had any issues with financing deals or finding capital for that. But if you're going out and building something from scratch like we've been talking about, you need to make sure that you have capital that you can go out and figure out how you're going to close these deals so that you have that alignment as well. I know I've talked to a ton of people in this space, kind of corporate development or M and A in the corporate side that haven't been as fortunate and they've had opportunities missed because they haven't thought through how they're going to go out and finance deals. They found them, but they haven't been able to actually close them. And we never want to be in that position. So we've built a good reputation, if you will, of once we find a deal, we have the strategic fit, we have the organizational fit and alignment. And you've agreed on a headline price. We've been successful in closing those deals.

Is this something you work with your sponsor on just to have a good sense of what kind of capital allocation do you have towards M and A?

Yeah, absolutely. It's also a conversation with our management team. What can we really take on? We have to have some realistic conversations. There's the day job which is growing the core business and we need to make sure that we can successfully acquire these businesses and integrate them or at least develop an integration approach and strategy. Sometimes you do have just like a Tuck in type deal and you're not going to fully integrate. Or sometimes you may just say, hey, we're not ready to integrate, but this is what we're going to do over time. But you need to make sure you have that discussion and alignment across the board at the company and then eventually with your sponsor as well.

How detailed do you get with this strategy? Because I feel like on one extreme you could be pretty vague about it and maybe just have a general revenue target. Another extreme, you could probably detail a whole market map out and be extremely specific. How do you get a good sense of how much detail or fidelity do you have in your strategy?

It just depends on the situation. On the private equity side, I've gone very detailed and done the kind of big market mapping and that's where you may not have much of a strategic focus. Or we're trying to figure out, hey, where are all the opportunities? And everything gets thrown under the sun to see what would stick. There's not really a right or wrong answer for doing that. It's the more focused you can be, of course, the easier it is to evaluate opportunities as they come up. We get opportunities that come to us all the time and you don't want to be spending time on things that you know aren't going to go anywhere. It helps you do your job better and more effectively if you have, okay, this is our strategy, this is what we want to go do. And of course there's going to be edge cases out there that are going to come up where you're like, okay, this may be something where we want to go. There's not really a right or wrong answer there. I like to have as much of a narrow focus as you can, as long as the opportunities there. And then look, some M and A deals, they unlock new markets for you. That adds a whole new ecosystem of M and A opportunities for you. And those are great. We certainly have done that. There's no real right or wrong answer there.

That's what I was going to ask you. Because when you start looking at these opportunities and I see how it can serve as the guidelines, but I feel like none of these deals really fit perfectly in rarely. A lot of times it's how we twist and turn or get creative to make it work.

And you can be real creative sometimes on seeing if something has a real strategic fit, you really have to think about, especially for larger, more transformative deals, about what does does that deal do to the combined company? What does that form your company into and how are you going to Be pitching yourself and your business to future buyers and investors going forward. Especially once you get into those bigger deals. You need to know, okay, what does this do to our business and how we think about the company that we are. Tuck ins are easier if they're smaller, tuck in type deals. You're adding a product to your stack or something and it's complimentary. There's a cross sell revenue opportunity. Those are a little bit easier because it still fits within the core of the business. It's those ancillary markets or products that you're looking at that you know, could potentially change the type of business that you are, where you really have to start thinking about that from a strategic standpoint.

So there could be deals you come across that'll get you to rethink strategy in general.

Absolutely, yeah. Strategy is fluid anyway, and you have to think about, okay, is this the right strategy? We do it every year for us and we think, okay, okay. These are the growth priorities. These are the company strategic priorities that we have across the company for the next 12 months to get us to where we think we want to be and what we need to achieve to make sure we're on track for that. And we revisit that during the year. And then you need to dust that off and talk about that as much as you can and make sure that you're focusing on the right things. And as new opportunities come up, then you can challenge yourselves together as a management team to see if those really are the opportunities that you want to go after.

We talked about shaping this growth strategy that shapes your M and A strategy, building out the pipeline, making sure you got the capital and you know what you're working with there. What about structure of your process to execute on the deals and then governance.

So you mean as an opportunity comes in, how do you go about getting it to eventually a closing?

Yeah. Do you just figure that out as you go?

Yes, you do. You always figure out and learn things and deals. There's some basic fundamentals for us, especially if we're doing an organic outside of a sale process where a banker's been hired and we've established a relationship and we're saying, okay, this is a potential strategic fit. Let's see if there's a deal here. We try to do a pretty quick eye level analysis from a financial perspective outside of the strategic analysis and try to figure out what we think the company's worth for us. And we make some assumptions on that. We look at kind of the deal and size and what we think the Synergies are going to be, whether that revenue or cost synergies that we're going to be able to execute and try to come up with internally. And we have a debate as a management team and talk about that and focus and of course talk about it with our board and our sponsor and come up with a headline kind of price and structure. Assuming we can get to that with the seller, then we'll move on to a more detailed confirmatory type diligence before moving on to a closing. So we like to get to at least a price and if things check out in diligence, we're comfortable closing on a price. So there's no surprises to a potential seller in terms of what we're going to do post agreement on those terms.

If we get to the little steps like you found a company in the pipeline, you reach out to have that introductory meeting, you get to know each and say hey, there's some pretty explicit interest in making a deal happen. What happens from there? Do you do another call or multiple calls, some diligence and then a formal request or do you do just a formal request at once to, you know, what are those little steps to get to your valuation offer?

I'll answer this in a kind of non banked process type deal because those are pretty established steps and parameters.

Those are the ones we want to do anyways, right?

No, we're not afraid of those and we do those of course. But the ones that you can originate are always, can go a little bit better. Those types of deals, establishing that relationship and culture fit at first, that takes time and assuming you're through that process, which can take a number of years even, we'll have an NDA in place, we'll get some basic financial information at that time we should have already established like the strategic fit and rationale and have general alignment across the company on that. We'll do some basic financial modeling and structuring and things like that, figuring out how we think we want to go back to the seller in terms of a price. We'll do that in the form of an indication of interest or loi and then we will typically sign that would want some exclusivity to make sure that we're going to start dedicating some resources and hiring third parties to help legal Q of the tax structuring, that kind of stuff. That will be confirmatory diligence over expedited period. And we'll pull together a purchase agreement and start negotiating that and moving towards the closing. So we move pretty quickly. Once we kind of agree on the high level key terms to get to that, to an actual closing and we would want to do that in the form of some kind of signed exclusivity provision in the best case scenario. And sometimes we'll just move towards it without that.

How do you know who to let under the tent prior to getting the LOI signed?

We will have more meetings, diligence wise, of course during that period and that will include the key top leaders from each of our key functions. So I'll work really closely with our cto, our cfo, our head of product. We'll have executive meetings typically on the weekly or bi weekly basis depending on how quickly the deal's moving with other key functional areas. Legal and I are obviously really close on all the deals too. We'll pull an hr. We're talking about depending on the structure of the deal. We're having positions and organizational structure changes and things like that. We'll be partnering with HR and how that's going to fit and how we're going to put the company in place and like where they're going to stand in the company and how the reporting lines are going to work and all of that. So that's a real collaborative, cross functional effort with the leaders and we'll have a bunch of those key leaders, including sales and marketing. Of course in some of those diligence type meetings where we really dig in, have management style meetings where we're going through the business, key findings out of diligence and all that pre loi. We pretty much do that post IOI or loi once we've agreed on high level key terms of the deal including our headline, price and valuation.

Okay. And then what about before that, before you got assigned loi, who would be under the tent at that point in time?

The executive team.

Just purely the executive team?

Yeah, purely executive team. Sometimes they're number two or three depending on if it's a heavy tech focus, product based deal. We'll want our team where we think that this product is going to fit and integrate into. We'll have that team very involved on the front end as well.

Then do you have a legal person there to.

Yeah, my GC and I will and his, his team will be attached to the hip throughout the deal. Same with our CFO on all of our deals.

Okay.

We'll hire third parties to help with us with confirmatory type diligence for the quality of earnings and tax and structuring and legal as well.

Then once you get assigned, that's when Pedal to the metal. You're getting a lot more of the functional lead, a lot more folks under the tent.

Every deal's been a little bit different. We want to move quickly and we also need to make sure we get all of our work done. Of course, as long as we know we're in alignment with the seller on price and some of the key structural aspects, then we're focused on the diligence. Because all the legal documentation and all of that, I feel like we pretty much have a good pulse on that and we've been able to negotiate good deals with that and haven't had any of those things come up in our deals that have prevented us from closing. So getting to that headline price and in general structure has always been like the key. Now there are some things when we have management teams coming in and fitting in with our broader organization where we need to have conversations from a compensation perspective of like reporting lines and things like that that we will be very focused on. It's almost more of a legal documentation negotiation that we need to have as part of our deals that will come in that kind of like post agreement on the headline price as well. We don't really need a assigned LOI to go to that step. We just want to make sure after time we have agreement on those key terms, including the valuation. And we're going to be working towards a close and confirmatory type diligence.

Are there any like key ticket diligence things you're looking for prior to getting that offer signed? I imagine you want to try to head off some of these critical things before you sign a deal.

First off, we want to make sure that the company's financials are what they say they are. We have third party and internal folks that are experts in that. But we want to make sure we're buying what we're buying and the financials are what they're representing. And that's one of the biggest pieces. Of course we have our technology team depending on the type of deal. Of course, again, we have our team look at the tech and some basic key metrics around the technology and the product stack and architecture and things like that. And occasionally we'll have some third parties come in, depending on the bandwidth of our team to help us with that. But they're leading that, our tech team's leading that.

So it sounds like you can do a good assessment upfront to get to this loi. And then a lot of the bulk of the work happens post LOI with a lot of contingencies basically that you got the quality of the financials because if there's something instrumental change there, then you'd have to change things.

When we having a target and we're having the acquisition conversation, we have done a lot of front end work before, so we've done kind of phase one of diligence at that point before we deliver our first indication of interest, whether that's in a short letter talking about the value and general structure and kind of key assumptions and what we need to do in our next steps to get to a closing or if we do it in more formalized loi, which has potentially some longer form type things with that you would see in a term sheet that you would use as an outline for a purchase agreement. So most cases though, it's a more informal, non binding indication of interest where we talk about those key assumptions, we talk about value, we put a number, not a range on the valuation which we negotiate of course. And once we do that from there we move into that kind of phase two, phase three of what you would see in a banked process of okay, let's move towards a closing and confirmatory diligence. We still do a lot of things that you would see in kind of a more formalized process. We would have a management meeting, we would have the sellers and the management of the seller meet our management team and we have ideally in person meetings going through key diligence analysis and work and kind of a diligence type discussion. We would talk about our post acquisition integration strategy and philosophy and make sure we're aligned internally as a team and externally with the seller. Okay, what are we going to do together and how does this going to look both organizationally and going through and taking advantage of the opportunities that we're going to have by being together depending on the type of deal that can go into. We've brought in people from every single organization at multiple levels where we have full day or multi day diligence integration diligence meetings and sometimes you're in a banked process and you're never allowed to do that until after you own the company. So that really just depends. We move in those kind of non bank deals pretty quickly into confirmatory type diligence and do Q of E, do all the work, we hire third parties that we want to do, we talk to our financing sources and get that teed up as well if we need to. And we're also going through giving board updates and other types of updates. So everybody's aligned and know where we are in the process. So we have that pretty buttoned up and try to do that quickly so that process never holds up. Us getting to a closing of a deal.

More steps that you have as you move further along the process.

Yeah, that's why in those non bank deals there's a lot of recording and upfront work that you do. So once you align on that price, that valuation and general structure and philosophy, it's really confirmatory. So you hopefully can move quickly and there's not much controversial points and deal points that are outstanding that you can or at least try to minimize those so you can get to a seamless closing.

Where did you find people to hire to build your M and A team?

It's a challenge. If I were hiring right now I would look to more complement the deal and transaction skill set with something like a consulting type background. We're not hiring right now. In the past we have hired for shorter term integration type roles. But if I were hiring right now I would be looking for skill sets that would complement mine and more of the transaction M and a strategy area consulting type things where we're looking to really dig into some new growth opportunities in new markets. I would love somebody to help assist and that has been expert in doing that kind of work or building out more detailed sales growth strategies and things like that.

That's pretty interesting. What was the first hire for you?

The first hire for me was after we did an integration. We did a big acquisition and we stood up a new integration program. It was a short term role and we needed somebody to come in and help with the kind of day to day cross functional work from an integration kind of program management strategy.

So it sounds like you're pretty hands on running these deals. Initially you didn't just come in and stack a whole team.

I'm a department of one right now, so I have great partners across all the functions that we work with. So if I didn't have that I don't think we'd be as successful. So I've some great leaders across the key functions that I work with and we work really well and we've done a lot of our deals and we know how each other work now. I'm lucky in that sense and we have good partners on the private equity side that can come in and help with any kind of work and more kind of the detailed analysis that we need to have and they're very hands on and super helpful. I've been able to pull resources to help in that sense. So we haven't really had to build out a team at all here yet. As we've gotten bigger, we potentially need some more strategic junior resources. At this point, we're not looking at that.

But so pretty lean in terms of you driving a lot of the core activity of M and A, but getting some support from the PE firm. Make sure you're not doing two crazy deals that are out there. What about the part of working with your internal team around both? Diligence, integration, like how do you build that muscle? Especially if this is thinking back to that first deal and for a lot of those team members, maybe the first time that they're doing a deal, it's really hard.

Integration is very tough.

Let's start with diligence. There's like two things. It's like one, I'm gonna put you through diligence exercise. All right? Now we're gonna do the real work and do integration.

I think on the diligence first. A lot of people don't have M and A experience, so I've been able to work with our team of like, okay, here's what I'm really trying to understand and better understand. Is it a growth opportunity that we think we have? Is there a cross sell opportunity? Are the customers that we have here, do they have the same problems of these customers and is there something here or there's not? Then how would we sell these as a platform together? So it kind of just depends on what type of deal you're looking at. I like to work with our team of just saying, okay, here's where I really would love your help and your opinion on this business in their position and their market. A lot of times these partners of ours will have in our functions, of course we'll have them go and talk to some of their customers. And so it's our own internal proprietary research that we're doing. What are you as like our customers hearing in the market about companies like this or other companies? We have to do our own internal homework and that's where I'll have their help. And then on the technology side, that's just not an area of expertise of mine at all. So I'll just want them to say, okay, what are the key things that you need to just evaluate these three things that we want to look at or are there other things that you want to see that would get you comfortable with what we're acquiring here? And so it's a real, just collaborative effort and knowing what expertise that you're bringing in and what you're going to leverage those people, people for to help you with that diligence front, I can.

Imagine you get this range of people that are excited, even overly excited about M and A and then resistant towards M and A. How do you manage that?

I like to talk to them about the value of M and A and how that drives value for our overall company. Everybody at the senior level is incentivized to grow the business and drive equity value. So we've seen that over time has been a huge equity value driver for our business. Over the period of time in my professional career, I've been able to give examples of that. Once you get folks excited about, hey, what this could potentially do, I think it's a pretty easy discussion and people get excited about it. And then of course, sometimes product folks or whoever, a sales folks or they'll be a key person that helped have the idea or source. So there's a sense of ownership with them around getting the deal done or what the deal could do to the company. And they get excited, hey, that they were such an instrumental piece of getting the deal closed. There's a sense of ownership there.

I like that. Do you have examples of the pep talk you would give to get somebody interested and excited about the deal?

If you're able to, you can always do it with value of equity. You can say, look, if you thought your equity was worth X, a deal like this could have a multiplier effect to that. There's the kind of growth incentive equity discussion that you can have and sometimes there's just broader opportunity. Hey, if we get this company, it's going to go in your department under you and it opens up a bigger growth opportunity with maybe a new organization or a new department or something like that. There's a professional growth aspect of it as well. Potentially, I think all those things help. And at least for us, everyone at our company just has a good culture of just working hard and wants to just do the best thing for the business. So I think I've been lucky that I haven't had to have many of these kinds of conversations. It's always been like, how can I help? There hasn't been much resistance to doing deals like that.

So appeal to the what's in it.

For me that can help. If there's a resistance to M and A, I haven't had to do that. Always talking about the excitement around what this does to our business. I think that excites people generally speaking too. It doesn't have to be individual. I'm saying that's a lever you can use.

Even the experience part. I Like that you referenced as well. K Just getting the experience of working on an M and A is. It's really valuable as well. What about the real meat of the work doing integration?

It's really tough depending on the deal. Again, we've done a lot of banked deals that are moving very quickly in processes. Even if we've started sourcing them proprietarily, eventually they go into a baked process, which is fine. It puts us in the driver's seat because we've been talking to them. We have a relationship with management teams. Typically we've been very successful in winning those deals. But the integration side is just really tough. We, especially for much larger deals, we're really good. Some of the back office stuff is while super difficult because you're talking about financial systems to integrate different technologies, CRMs, all that kind of stuff, it's really difficult. We've developed a pretty good program for that. But that takes time and effort and learnings and then it takes focus. You have to prioritize this stuff. It's really difficult. And then when you get into businesses where you're buying products that may have overlap or something and part of your deal thesis was synergies around merging products or sunsetting certain ones and migrating customers and things like that, that kind of stuff can be really difficult. And there's so much cross functional impact not only to customers, organizationally as well. Those are very difficult and can take long time to execute. And it takes a kind of of strategy and focus and prioritization starting with the top, all the way down to the people that are going to be executing that. So that's really difficult integration stuff. Tuck ins are somewhat easy. If you have a business that you're just going to buy and the strategies to keep it, it's on its own, that's not that challenging. But the other ones they really are, it's tough and most companies aren't. At least that I've worked with both on the buy side and as in corporate development, aren't set up for that. So you have to really think about that integration strategy and how you're going to do that and set yourself up for success with a program and prioritize all the efforts accordingly.

Make sure the right people know what.

They'Re doing and they're buying in on what they're doing. Is it something where hey, we have these two products that kind of service the same customers. Do we keep them that way or are they different enough where they need to be kept that way or are they competing with each Other that it's causing customer confusion. We need to figure out what the kind of pro forma product is and how we get to that product. All those conversations, those are the really difficult ones. How we put two HR teams together, two finance teams together, two legal teams together, two IT teams together and systems and all that across those, those are a little more or super difficult and they take time, but they're a little more straightforward. Even those take time to get to a good place. To where okay, now we have a good program for how we're going to go do those back office things. But then the more difficult customer facing impact type discussions and impacts, those take a lot more time and they're much more difficult. A lot of times you end up not doing them sometimes for good reason too.

That's why M and ain't easy.

Yeah, it's not easy. Yeah, that's right.

Teach me things so I don't screw up my first deal when it time comes. What are things that you would do.

Again, differently if you're going to keep doing M and A. Your reputation of how you work with banks and with the target companies that you buy and the management teams that you bring in. You really want to build a good reputation of that. But for us, I really want to have have a reputation of closing on the number that we say we're going to close on. And if we don't, there's a really good explanation for that. You want to be the natural acquiring company for your potential targets. They want you to win the deal because all things being equal, you want to be the company that they choose that is their home for their business. I have good examples of that and throughout my career. And you want to have the sellers be a recommendation for you in future deals. You can bring somebody that you acquired and depending on the type of deal, but even if they ended up not being at the company anymore, as a seller, you want to be super aligned with them and transparent with them and make sure that you're taking care of the people that they want you to take care of in the right way so that you have that good reputation going forward.

That's important. Do the right thing, treat people well. Any other little tips and tricks just to make sure I don't screw something up.

Get a Q of you done. It's always. It's one of those things where your internal team, it depends on what you have from a financial team. Like we have a really strong finance and accounting arm and they're busy still. I want to supplement the work that they do and make sure they're involved in the qov. But we have a real independent third party looking at it that we trust that knows our business that we can rely on to go work expeditiously to get. To make sure that we're covering our bases there.

Even on these tiny little deals, you might little sub 5 million dollar duck.

In it depends on how we're valuing the company. If it's like an aqua hire. Yeah, there's. And we're just buying some technology and that's scale and any kind of revenue. Yes, I think that you can avoid that kind of stuff. But then where does your focus go? Where's like the concern? Is it going to be technology? Then you may want to hire somebody, a third party to take a look at some of the key things. From a tech standpoint, there's always something. As long as you either have the expertise in house, that's fine. But there's a certain level of diligence that you need to make sure that you do on all of these businesses.

Do your diligence.

Yeah.

Nate, what's the craziest thing you've seen in M and A?

I did have Q of E kill a deal once where the target company that we were looking at had a very unsophisticated finance and accounting team and cfo. They weren't committing fraud or anything, but they had some revenue that they took in that wasn't real revenue for a certain year. And it contributed to a lot of the growth in the current year. And it was a large enough percentage of the company's EBITDA that there was a conversation around value. Because you tack on a multiple. This company was being acquired at a EBITDA multiple. So you tack on a multiple to that, and if it's a large percent of the ebitda, then you're having a material discussion around the valuation of the business. And ultimately we weren't able to get to a place. It was just not something where the seller was willing to go. And so we parted ways. It was unfortunate, but it wasn't surprising when we communicated what we saw. And anybody that was going to look at it would. Would have had the same discussion.

So it's probably a good thing.

Yeah. And they weren't ready to sell at that value. And so it just didn't. We just parted ways. So it wasn't a big deal. Get your Q of E. Maybe that's why I have like old war wounds from that one that might as well get it done. Every time I'M pretty sure our team would have found that internally anyway. But always good to have some extra support, extra assurance.

Absolutely. Nate, this has been great. I appreciate you taking the time helping me become a better M and A scientist here.

Great. Yeah, it was fun. Thank you.

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Foreign.

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