How to Run an Accelerated Deal Process

If you're paying per page for a virtual Data room in 2022, you should be fired because that's just wasting money. And that's why there's firmroom.com a virtual data room that meets public company security standards for a fair price for only $500 a month with 10 gigs of data included. Somebody had to build the best VDR out there. And if you're getting duped into paying more than $10,000 for a virtual data room, save your money. Visit firmroom.com it's an M and A Science company. We don't build crappy products. I'm Kisan Patel and you're listening to M and A Science, where we talk with deal professionals and learn valuable lessons from their experience. This podcast focuses on stories, strategies and what actually happened during M and A deals. Welcome to M and A Science, where leading M and A practitioners share lessons learned from their experience. If you're interested in keeping up with the latest from M and a science, visit mascience.com, subscribe to our free newsletter. Every week we share highlights from our interviews and invitations to events as we build the greatest community of forward thinking M and A practitioners. Again, that's mascience.com I'm your host Kisam Patel, CEO and founder of M&A Science. Joining me today is Kirti Gavri, Head of Corporate Development for Wiseline, a global technology services provider that builds high quality digital products and platforms that accelerate time to market. The company's backed by CDPQ and Apex Technology Partners. Today we're going to talk about how to speed up an M and A transaction. Kirti, how are you doing today?

Hey, doing very well. Thank you Kishan for that introduction.

Appreciate taking time to hang out and hopefully teaching me a few things. Can we kick things off a little bit about your background?

I've been in the industry for 15 years. The first part of my career was more on the business development side. But for the past like 10 years since I joined HCL, I've been part of corporate strategy and corporate development. I was one of the founding members with the team and in those 10 years I have had the experience of working on the smallest transaction of 2 million size to almost $2 billion and the services and software space. I've covered both cross border having done transaction in the us, Western Europe and Eastern Europe. Currently as you said, I'm head of Corporate Development at Whiteline. So from one growth story to the.

Next, got a pretty diversified deal experience there. Being part of a founding team to stand up an M and A function, the big to the small multinational.

I've been fortunate.

Yeah, let's get right into it. How do you speed up the M and A process?

I'd give an anecdote prior to responding to that question. In a way that when you are part of an organization which is publicly listed, headquartered in M and A but doing most of its business from the US and Western Europe, sometimes speed is your differentiator. So we become a part of these broad processes where even if you are not the highest bidder, but you can get the deal done faster and in the time desired timeline that works in your favor. So that has been the training background and overall I think it boils down to the standardized processing. That's what it comes down to basically.

Really having a detailed laid out process.

In any M and A deal cycle. It starts from sourcing to signing and closing. What works best for getting it done with the desired speed is to identify and understand the internal navigation like internal organization. Really understand define your stakeholders and define the processes that you would use for each step of the way through that deal cycle. For example, one most important thing and critical in the process is just how having your initial request list ahead of time. Because as we get into the due diligence, things move fast. So once you've identified that you will run the deal process in various tracks. For example business go to market, sales and then hr, legal, finance. You should have your initial request list from the stakeholders. And they are pretty standard rather than with every deal you're preparing and starting that know from scratch that one. The second thing is just having your standard templates of LOIs, IOIs, approval matrix and trackers that you would maintain to have a view of that transaction, where it is or the status of transaction at any given point in time. And also the boilerplate for once you get into the definitive. Like if you're doing a stock purchase agreement or an asset purchase agreement, would you need a TSA which is like transition services agreement or if you are dealing with cross border transaction then what sort of approval regulatory approvals you would need. So having a repository of that helps a lot.

Okay, have the process, the request list and these things and then also the templates of documents you would use along the way. Any other specifics is that basically the key areas in terms of what it takes to make the process go fast.

One is the processes in terms of documentation and SOPs. The second part of it is just identifying the stakeholders in the organization. To give you a specific example, what happens is during the Process we know that we will have to prepare a business case. Just understanding even at the time you receive a visa from who within the organization would be sponsoring would be the business partner answer for that deal and then identifying a project manager for that deal or the line of business. Then the second step is while you're orchestrating the due diligence team, then having the stakeholder or track leads and keeping that the standard M and A team would immensely help. For example, in my experience, every time there is a transaction for let's say a services deal or a software deal, there is one HR person who I know would lead the DD there. They can assemble and change their team. But then they are the ones who would be my go to. There would be one person from Risk and compliance, one person from global it. How that help is once I see that okay, this is a potential transaction that could go farther along in the process, I give them a heads up. And because we all have to appreciate that they have their day job. M and A is not their day job, it's mine. Once I give them a heads up, okay, they start assembling the team, orchestrating it. But we are not doing the drill of it even identifying the lead and going through the process every time there is a deal. Appointing the right stakeholders, educating them early in the process of okay, while you're establishing your M and A team or M and A processes, they are aware. This is how we do it, this is what we are going to do, this is what we will need from you and this is how you're going to use for the Outlook or the lens that you're going to use to submit or evaluate this transaction.

That's pretty cool. That gets them ready to go, ready for action. Exactly what does the sequence look like if we get to a deal and we think about speed, how do you think through that? Kind of have a timeframe in mind of when you involve people, what works.

Best and what has worked in at least my experience is because there was a time when we were doing a transaction every quarter for like multiple quarters. And if you see average transaction does take out three months from identifying the opportunity and signing and closing could take more or less. But on average that's the timeframe. So the standard process is once we have an inbound or a proactively sourced deal, it's pretty much you get the NDA, you get the detailed information, memorandum management presentation and then start preparing the business case for the accelerated process that would work in your favor is just identifying early on that okay, this is something that, that sounds like a strategic fit. And then as we go through the process, not working on things or the steps of the way sequentially, rather doing it like in parallel. As soon as we are having management calls, we've already received the detailed material. I would request all my team members and stakeholders to start thinking of the business case. Why are we doing this? What's the strategic rationale, what would the numbers look like, how would the synergies come up to be and what is like the go to potential, go to market. So I'm not waiting until after the management call to start the business case. Initial dd, for example, just getting a market landscape, getting a competitor landscape. Because most of the times once you have identified, once you know the name of the company, pretty much the ecosystem is out there right for us to do that research. So starting that prelim DD and starting to prepare the business case internally in parallel makes a lot of impact on.

The timeline, on the business case part. How does that unfold? Is there a template around that to make that go by faster?

Yeah, and then that goes back to my first point of having the standard processes. I think if I were to bucket these standard processes into key deliverables, if that makes the number one deliverable in that would be as I said, initial request list, then the second would be business case preparation. That includes the valuation and the financials of it. Also the strategic rationale, market opportunity, competitive landscape. So there has to be a standard template that primarily use and you can change it case to case, but at least the template is there. Then the same thing goes as you go to the loi. So that would be the third deliverable or like a term sheet, some targets, potential targets would prefer a term sheet as we get shortlisted for the latter stages in due diligence. Then the standard tracker that you would use as an update state to identify if there are any red flags or key issues that you foresee in any of the diligence tracks. That's another deliverable like the DD tracker. Then the diligence report that you're going to present to your board, to your internal management and the stakeholders. The final part is the definitive. So either you're using your own templates or you're working on the agreements coming from the other side. The key clauses in Most of the SBAs are pretty standard. Have a view, have a market or like your floor and ceiling of those deliverables. So straightforward. Answer your question, business case, it's pretty standard template. And then you also have already identified the owners. Who is Responsible for the strategic rationale, who is responsible for the market overview, who's responsible for the finance and the valuation aspect of it. All of those things, they're identified in advance and it's like a framework.

You ever thought about teaching a class on how to build a business case?

Any day.

I was curious. You referenced the stages and it sounds like you described a competitive auction process. I was curious if there's a major difference in how you approach this between a proprietary and auction process. Are you still pushing for full speed or is it different? Are you slowing things down intentionally by.

The design of it? I'd say a proactive process definitely has a longer cycle because you might have identified the opportunity, but the other side may not be in the same page as you are. And it will always take them time to warm up to the idea. And then everybody these days is. If you've been following M and A for the past few years, the valuations are through the roof. So everybody wants to maximize what they can get for what they've built. So they do also want to do some market tricky and all of that force the preferences. Always have a proactive deal. Primarily because if you're an opportunistic buyer or if you are doing M and A, you're not as acquisitive as some of those companies are. It just makes more strategic sense that you go at your own pace and find the value as a win win for the parties and not necessarily at any time driven by the sell side process. Because any sell side process would have an accelerated timeline to it. They would have market forces more attached and like driving the outcome or the desired outcome that they reach. So it goes true for the valuation, it's true for synergies, and it's also true for whether the business or their target should go to a strategic or a stop.

You and I think alike. I can't give you a hard time for that response. I guess the one benefit on the auction, you get more of it packaged.

Up front, it's more vetted. Yes, it could be a lot of marketing as some people would say, especially in terms of the initial materials and overviews received. But I would say one thing, a big pro for a sell side that not every sell side represented process is an auction process. I have seen a lot of them taking that consultative advisory approach too where they know that they are only going to selective parties where it makes strategic sense. So I won't generalize it to every sell side process as auction process. But if it does fall into that category, one Thing that I would say is a big role is that they are more prepared as an engine to do the deal. The likelihood of getting the deal done, one is very high. And the second thing is just the preparedness to be in the process in terms of the financials or the information that you'll receive, something that would be more prepared and more mature.

Fair enough. Can we go to your initial diligence approach? Can you walk me through what that looks like?

Initial diligence really begins as soon as we have the detailed information, much before the official due diligence track is triggered or we get access to the data room, and so on and so forth. So initial diligence is primarily to understand what is the market opportunity for that potential target. Where are they playing? For example, if there is a Microsoft ecosystem services provider, so we know that, okay, if it's Microsoft, then the competitors could be Google or AWS if it's in the cloud. So just to understand where are they placed in that ecosystem as compared to other vendors, what is their go to market and just getting the public information that's readily available out there. And also just talking to industry stakeholders, talking to your business stakeholders who are out there in the market talking to customers. Of course, all of it happens discreetly, but because we already have the information, that's where the diligence starts. In terms of now, hr, finance, legal, all of that still is parked for the latter stage. But just to reinforce, underscore your strategic rationales and the synergies, it's all just getting the information from your market leaders.

A lot of homework to do up front.

Yeah, because it's one of those processes, M and A. And as a buyer at any given point in time, there's that question dangling in your head. Are you overpaying? Is this the right one? Would there be five others that we are missing if we do this one, you only get one chip. If you go ask your CFO for writing the checks.

Yeah, that's fair enough. And this sounds like this is all before conversations.

Not really before conversations. It is one. We have signed the NDA and we either have had management call or are scheduled to have a management call. But we have received this sim. The SIM is like a market standard confidential information memorandum that you receive after you sign the NDA.

Okay. And then you're doubling down a lot of that stuff.

And then, yeah, that's when the diligence really starts. Because prior to NDA, you know nothing. You don't even know the name of the company.

What's key Things you're asking for on.

Those management presentations, they are categorized under different heads. One more targeted would be just the health of the business overview, like how has the company come about? It's an important question because you'd see a lot of targets. Especially if they have been around for a while. They at some point would have pivoted their strategy. So if they are in the process now, there's always a story to their history. Where they started, where they are now. And that's why they are around still and shopping. So one important bucket is that overview and the evolution of the company as like from their strategy point of view. The second area then would be the overall go to market. And then what we are trying to answer there is this business scalable? Can you sustain this business for a period of time if it were to be left alone? The third area then is what are the use cases? Why are the customers spending money with that company? So what is the stickiness of their customer base? The other part is more like financials which I say to be honest in the management call is still high level. Just to understand how what they're recognizing the revenue, what their profitability or the cash flow look like and what is what are the areas of improvement there and the triggers or drivers for growth and improve profitability. But management call is more centered around the health like the business and less financial.

I'd say you get like culture related questions to dig in and understand how they actually do things or what that looks like.

Great point. Yes. The reason I say that is most of processes or the transactions, M and A transactions they fail or succeed or even like early in the process you get shortlisted because of the cultural fit. Think from a seller standpoint. And if they are in the process, of course they have suitors. So how are they looking at. Okay, who is the one among so many companies that maybe you can bucket them in a similar global footprint or the revenue size or the strategic fit. But what is that differentiates her? And it comes down to people. From a buyer standpoint, what we are looking to see is again it kind of gets covered in the scale. But separate people and cultural aspect is is it a cultural fit? How are they retaining their people? What is the attrition like? Do they have tie up with universities involved? And how are people motivated the things like that and talking to the management and understanding what is important to them in terms of expectations from a potential buyer tells a lot.

You're the key questions that you asked to get that conversation going.

So I think one most Important is how are your employees going to feel about this potential transaction. The second question that I almost always ask is average tenure of the employee. Where are you getting your talent from and how are they motivated in the process to stay with you and do you have any tie up with the university that you or like your talent more homegrown in terms of culture? One important and it is because I come from APL which was broadly global workforce in India. One of my questions used to be how would people feel about working in a global company or like with majority of its workforce in India for example so cross cultural just understanding how would their employees would be. Even the management feels about that.

I like that a lot. That is a good way to get the conversation going in that direction. But the tough questions up front.

I used to think it's a tough question but you'd be surprised that these days those are the conversation starters.

They should be.

I have come across companies where they say hey, we've not included you in the process because our team, the potential target they don't believe that the cultural fit like they've already identified for whatever reason that we are not a cultural fit. So we think it's of a part conversation starter and on the other side it's also like oh great cultural fit. We think our team is ready because you are global, you have a global scale. But we are local and they're happy to work that way because in that one does get enough autonomy and power or like they're empowered for that geography for a global organization.

Yeah, that's a really good point. The approach in competing in an auction process, what's your strategy look like when you're competing against a lot of PE firms As a strategic in my experience.

And I would say it still holds true for strategic buyer. Unless we are extremely keen in the area or in that target or the potential market space. We are always very cognizant of okay, this is going to be tough. Do you even go through that brain damage and is it even worth it? Because we are cognizant. What it helps us do is even in the initial stages of the process we ask those questions, hey, like I am one of the person who would just ask the sell side banker or the advisor in the process, what is it going to take? How broad is the process? Are we talking like sub 10 parties or like more than 10 parties and just doing the initial back of the envelope number then running them through them saying hey, if we fall out to be here, not even asking for guidance, just generally taking A view. Do you think it is even worth being in the process? Do we even stand a chance? Questions like that. And even internal stakeholders asking tough questions. Is this something. If you had only one chip for the entire year, would this be the one? And you kind of have a view. And more often than not in such scenarios, we don't even participate in the process just being thorough because it takes a village. It's a lot of hard work and the bandwidth distraction to get an M and A deal done.

That's why I like proprietary deals.

As I said, I won't generalize it, but definitely, unless, as I said, if we know that, okay, this is an area, this is a target that we really want, then we go all in. So then it is like whatever it takes.

That's true. You'll go there, you'll go wait in line and how to do. Yeah, there's talking to the banker, getting a sense how competitive it is. Anything to really compete when you do want to get the prize deal.

If you've established as an organization, as a corporate management function that this is what we need and this is what we're going to do, then I think paying a premium and then to get the deal done is totally the right call. Because you think seen the industry, there are deals that you can debate all you want. They have helped someone to be a market leader, they have helped someone to grow in the strategic rational, why they did the deal and there are deals that have failed. It makes business sense. Then you should definitely pay for it and get it done because you're going to miss the buck. And the market is hard. With the global economic backdrop where we are today, it is hard to keep up the growth level. It is just there is so much uncertainty and unpredictability in the environment that M and A has become more strategic than ever to grow.

What about like navigating some of the components that slow down larger company competing against the PE environment because you have to get approvals and it's just all the people you just described, you got to get involved. How do you compete on that front?

Of course we compete. Get corporate development. One can do as corporate development professional, bringing those reality checks in the organization, educating your management, educating the stakeholders that this is what it's going to take. If you don't move at the speed that is desired, you're out of the process. And it's not only about speed there, it's also about the valuation expectation in the scenarios which have been identified as growth areas or big bad areas for your company. So in that scenario, a big part of corporate development professional is to bring those insights and market knowledge and educate in the internal organization. The stakeholders could be so removed from the valuation expectation that's where the deals are getting done as stakeholders or as like internal business people. It just doesn't make sense or you cannot justify as finance professionals to pay that premium. But it's telling them factually and it's not about they don't know it, they don't want to know it. It is about giving them factual checks of okay, this is what it's going to take. And it's totally your call. Not trying to enforce a deal here, but if we want it done for the strategy or the vision that you have, this is what it's going to take.

It sounds like there's a big part around expediting the buy in internally.

Absolutely.

The other part of the actual execution of diligence and this was where I'm curious of earlier, pretty comprehensive diligence approach and you optimized it. But still you're competing against fee firms that essentially are sitting at the roulette table putting some chips on numbers, waiting to see where the ball lands. They cut out a lot of that.

What we'd have to appreciate is as a team seller, there is a very clear demarcation of why a sponsored deal makes sense versus a strategic deal. And that is where you play. If there is the target that believes in the product or the service offering that they have and have an established definitely proof point in the market, they have a great business going. The only reason is for the next phase. They either need capital or they need go to market. The strategic makes sense. If you become a part of an organization that has a global setup go to market channel, that's the access right away, like time to market is accelerated. On the other side. If it's the capital and there is a good balance sheet backing, then everything is going out. Whereas if there is a seller which of course has to either go through a transformation, whether it's operational efficiencies or is at a price point where they have to go through a roll in strategy or tuck in to become sizable to even justify the value that they are envisioning, then a PE or like a sponsor route makes sense. There the competition is not as much as speed or value because once you're in a process where sponsors are a part of it and there is equal weighing from the seller side, then you can't really beat unless a strategic absolutely makes sense.

That's an interesting view you'll make a case on why Strategic would be a better home for that company.

Exactly. In my experience, there have been multiple scenarios where even though there have been sponsors in the process, but the strategic fit that the management team felt. And with a Strategic it is just. That's like the most critical aspect when they're making that decision. Unless it's like a trigger, as I said, it's either. I won't call it a distressed asset, but an asset that really needs a turnaround. A Strategic could easily make a case.

I like your views on this stuff. How about tracking all this? How do you track everything? Especially when priorities shift or you find red flags.

These days there are multiple platforms that can help you track your deal pipeline. Like the entire deal pipeline. Not just like the funnel, but also the process. However, in my experience, we've always maintained trackers, internal trackers with checks and balances. One part of the accelerated deal process is also to keep it robust. What I mean by that is have a regular daily cadence with the stakeholders. Not just like the business stakeholders, but also the diligence work. Extremely. And your legal team and the finance team. At any given point in time, if there is a red flag, then all of us are aware on the same day. Because you have a daily kid, that's the end of the day. And also sometimes it's okay. We identified a red flag in one of the work streams that was happening like in Silo. That process also help for them to update the other parallel work streams. So we can absolutely like right away in the real time also see and assess the impact of that red flag on the other work streams. Daily K then is a big part.

And that's around the conversations that you're getting together, sharing updates on daily basis.

Yes. Once you're in a deal where the work really starts outside of the corporate development or like a small deal team is once you kick off the due diligence. Other than that it's all like brainstorming. It's all like business case. There's always very. It's a very small deal team that is even aware of this transaction until that point in time because of the confidentiality reasons.

When you say like a daily cadence, that's those huddles where you check in because you do have a live deal going on. And that's when people speak up.

Correct. As a corporate development professional, you'll maintain a tracker of what is the status of these. So that's just to give you a view, visual view of what that tracker would look like. Would Be okay, we are at this stage, it's a due diligence stage. These are various work streams that we are running. These are the owners of those work streams. This is what they are covering. For example, in HR workstream, what they are covering is what is the employee sense, where are the people, what are the skills of the people, what's the average tenure of the people? Do these people need visas, do they have any employee issues, what are their leave policies, employment policies, things like that. And one issue that comes up is okay, they have contract, okay, the contractors are in Europe. Contractors in Europe have very different employment policies versus contractors or full time employees anywhere else. So now it is okay, we need to involve the Europe local HR people. And then if you are thinking of rebadging or taking fewer people than the original team, you can't really fire people in Europe. Or that would impact the financial business case. With the severance cost going up, due diligence tracker basically give the view of what work stream, who's leading that work stream. And as soon as in the cadence we go through, okay, what are the risks identified? Once they share the risk then we immediately talk about how does that impact the other work stream. And if we don't know it's a 2BD, then we assign an owner right away in that call saying hey, finance team, this could have a potential impact on the financial business case. Why don't you cover this tomorrow with that?

How does that information get related to the other team?

The cadence is all hands on call. Like everybody involved in the due diligence is on that call.

Wow, we have a tool. I'm obviously biased because I helped build one that's the best one out there. But you got to have them hand in hand, the practice and the tool. And I'm just thinking about is there a workflow that's ideal in on the tool side because you're having conversations to talk about it, but outside of that, whatever tool it is, you know, is that kind of like you vision? Like here's the ideal thing, I got a bunch of red flags, they're all hovering in the top. And what's your way to prioritize it?

I would love to have a robust tool that we could use as corporate development professionals. What happened is also I think about the velocity of the deals that you're managing. If I know that, okay, we are going to do let's say two active deals. You start thinking, okay, is the tool, investing in tool, what's the ROI of that? Ideally, I think everybody should have a Centralized tool. If it's like comprehensive in the regard that I'm saying, it caters to all the steps in the M and A deal cycle. Like you're saying, if you've identified red flags that are hovering on the tool, it's also okay, then everyone has to have access to that tool, which sometimes is tricky because everything that we do in for dev is confidential. Or maybe the tool has a view. Okay, for this transaction only these individuals get to see something like that.

This podcast is crowdsourcing knowledge. Then we have this product which is great crowdsourcing by M and A practitioners for M and A practitioners type of philosophy.

I'd love to take a look at that.

Those ideas like I was trying to get a sense of visual workflow to really have the priority items there but make it easy to shift. So whereas that changes, everybody knows exactly what's still top priority.

Maybe it has worked in my scenario because as a deal lead you are the central owner of the entire deal proper. So at any given point in time I always have a view. So maybe I am biased in thinking that I always have a view in a sheet or a tracker. But to your point, if someone else, for example, like some stakeholder, wants to see what is priority, maybe that's where the challenge is.

Yeah, because you want to get their own view. Here's priority one for you. And two, three and go down. So let's step back out and think about just even function. Because we talked a lot about the diligence side, but then how does the integration feed into all this? When you're working with integration team and the planning, are they part of the huddle and they're trying to catch up on integration planning. You talked about segmenting information and who can see what.

And I did not see that in my experience. But it is the best practice. Every organization should have a dedicated integration management office. These people should be aligned to corp dev. I'm not saying like they should be part of corp dev necessary necessarily. Don't get me wrong there. What I'm trying to say is even though it's a separate function in an organization, they should start and get aligned to for dev or the deal process early on, right at the time of the diligence. I am sure there's a statistic around it, I just don't know. So I don't want to miss out. But most of the transactions that fail, M and A that fail, you could point them to integration. And I'm not talking just about process integration. It could be cultural integration, but it does boil down to integration. In my experience, it's always happened that we have worked on an integration in a sequential manner. What I mean by that is Corp Dev runs the deal and then once we are close to sign and close, we hand it over, transition into the integration team. And that integration team is sometimes part of the business unit that's sponsoring the deal, or sometimes it is centralized. Right? It really depends on the organization. But the best practice is that if it's not at a centralized organization level, every business unit should definitely identify who is responsible for integrations of M and A in their respective lines of businesses. And as a process, those people, at least the pmo, he should be involved in the M and A process at the time of due diligence. Like, you know, due diligence has two steps. One is the initial due diligence which is done either by internal resources or external, but that's pretty much prior to exclusivity. And then there is a part of diligence that's done after exclusivity. So once it's after exclusivity because of cost, not just in terms of like dollar amount, but also in the bandwidth, that PMO is going to expand in the process. So after exclusivity integration team, the PMO becomes a part of the process. So he understands, understand why are we doing this deal? What are the synergies that are assumed? What is the vision of what are we trying to achieve in terms of business case and what is it going to take to execute this deal? Because core Dev will be out of that process when it comes to execution and then we are onto our next deal. But the business team is tough for the execution and they have no idea what were the assumptions for the business, business case, what were the negotiations in the process, why did we agree to $5 million of cloud cost versus it was going to be $10 million. So things like that, like who pays what, who is bringing what in the strategy or in the go to market, those aspects are very critical.

It sounds like you're standing up a work stream for a lot of this integration planning as you're doing. Diligence is ultimately the goal.

Ideally we should, but in all honesty, if Corp Dev does not stand up the team, we help the team to be onboarded in the M and A process and we help them in their initial Planning of Day 0, Day 30, Day 60 in a way that we explain it to them, okay, this is the desired stage of this M and A. Here we are where we are today, where we're doing the transaction. This is what the business wants it to be in let's say three to five years. And then what we help them with is these are the assumptions of the cost, these are the assumptions of the business that we have assumed to make this happen. Now as an integration person, what is it going to take in terms of day zero readiness? Does the target have the processes to be a part of a larger organization? Do they even have an entity in terms of find like shared service processes or like the client communication, getting clients on your paper, things like that. So the integration planning, we just help them on board and plan that day zero, day 30, day 60. But they are the ones who are independently executing on that integration strategy and planning them with the management. What we do is we play the role of facilitators or enablers. So we bring them in with the management and just enable those conversations through the process.

The integration lead. They're going to be essentially creating a lot of that planning as you bring them in.

Exactly.

To build that out. Working with the management team.

And then we keep stress testing it. Yeah. Based on the information that we received in the diligence or like what it's going to take.

What's the biggest challenge in all of this? Like really running a fast process. Fast and efficient.

The biggest challenge is how far removed like the integration or the entire planning is planning it's based on assumption and it could be so removed from the factors influencing the the transaction in a way. Like the day one disruption. Like a lot of times what I have seen is people fail to account for disruption in the business cases and integration. Everybody comes in highly optimistic, hey, we are going to achieve this. Day zero, day 30 and three months down the line the employees still do not have the ID cards for an organization or like the billing processes for subcontractors set up. It is that, that being very optimistic and being in a strategic mode versus like operational mode so far removed. Like when you're planning, that's the challenge. For example, we were doing this one large cross border transaction and there is an employee town hall that is supposed to happen day zero signing. And let's say that's like whatever XYZ day. And the planning for employee town hall is our leadership is going to be there, HR is going to be there. And we figure that the leader who is supposed to be there doesn't even have visa to travel to that country. Things like that. Or if we want to get into the specifics sometimes like we were preparing the business case and we assumed that, okay, this management who the owners of the company are going to be a part of the team. But once we are transitioning them, it's oh, they were the owners so they were getting the distribution. They were not really getting the salary. Now those salaries, this business unit who we're going to integrate, it doesn't because that business unit is more technical. So they can't account for that comp as a cost in their pnf. So where does that get mapped in the organization? So things like that you just never prepared for.

Yeah, so there's managing the details and the unpredictables.

One big thing that had happened to us, thankfully it was identified before sign and close. But it was like, okay, the entire deal structure that we've agreed upon is based on the fact that the economic value transfer from the contract would happen as the client contract would come to our paper and we start billing them, so we get the revenue. However, the client contract, as they stood there had provision that the cha they had like a change of control clause, for example. So in the change of control that cannot happen day one. So day one you get all the costs but you don't get the revenue. So then you have to be creative. Okay, now we can be a subconscious subcontractor or think of like how can we have that economic value transfer? The things like that.

Any other advice or lessons learned from experience?

There's always like best practices. Every deal is so different in its own regard at any given point in time. We should keep asking the tough questions of why we are doing it. We should always lead with the people aspect because people are the reason why a business is successful or not successful. Sometimes we can get lost in the numbers, but it should always be what is it that the buyer is looking for in us, in the potential partner? How can we make them successful so that we can realize the value of this transaction? People, people, people is what I would say.

What's the craziest thing you've seen in M and A?

The craziest that I have seen other than that we have walked away from the deal multiple times and then come back, came back and got the deal. It is about like just watching the resilience of people to get the deal done. There was this one specific transaction that was one of the fairly large ones in size. It was like, oh, there is no way we can do it. We are not even looking at it. And in five days, end to end, from getting the teaser to getting signing and closing, we got the deal done. Even today. I can't believe that we should have gotten it done. I don't know. It was like when it made sense for both parties. If we want to do it, there is a timeline from the other side. Timeline pressure of if we want to get it done. This is the only timeline. So we literally had five days to we had to travel for the deal. We had to orchestrate the entire team and negotiate. And in those five days, there were at least two times where we felt like, okay, this deal is not dead. Let's just all pack bags and go home. And we got it done end to end with all the diligence, with all documentation and everything like getting all stakeholders, getting the board approval, everything.

It sounds like an interview case study of its own.

It's like crazy in its own regard. It's not like the funny crazy, but it's crazy to even think that we could get it done. And it had so much intellectual property negotiation around it.

Kirti, this has been great. Thank you so much for taking the time. I enjoyed talking to you. I learned a lot. Thank you for helping me become a better M and A scientist.

Thank you. Appreciate it.

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