Introducing M&A to a Larger Company

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Doing well, doing great.

Can we kick things off with the executive summary on your backgrounds?

So Jeff Hennig and I basically handle all the M and A and venture activities at amd. Came over with Dan from Xilinx where we were pretty acquisitive. Made lots of venture capital investments as well. Before that was in banking, prior to that was in Corp Dev. I've been doing essentially M and A and venture capital for over a decade on both sides of the table, both from a client side and from an advisory standpoint. Originally an engineer, went to a small school in Northern Indiana called Notre Dame. Finally made it out of the Midwest and have been in California for over a decade as well.

And Kisan, as you mentioned, I'm leading M and A integration at the company, which is now AMD used to be at Xilinx with Jeff. Prior to that I spent quite a number of years at Cisco. So another very large acquisitive company, as you can imagine, taking some of the best practices learned from those other experiences and bringing them to bear here. Prior to the Cisco experience on the M and A team I did have a variety of operational roles. Spent time in supply chain, product marketing, et cetera. All of which I think are good feeders into corp Dev given the cross functional nature. So now Jeff and I have been working together for four plus years and really I think the nature of this conversation is much about the partnership between the front end and the integration team on the back end.

I'm excited. I got full coverage. I haven't done this before in interview. We got the whole deal life cycle. How many deals have you guys done together?

I would just say Jeff and Kisan. As you know there are plenty of deals that we started pursuing and not all of those transpired. But Jeff, our actual number of closed deals is probably what now together seven.

Or eight, probably somewhere around there in that number.

Maybe additive to that number is the fairly sizable AMD Xilinx transaction where Jeff and I both engaged. Of course the interesting piece there was we got the perspective of being the target, the acquired. This was a $49 billion deal, call it 50, whoever is doing the math. But a very large deal that really spanned multiple years and is in fact still not surprisingly in integration phases.

Yeah, that's where things get interesting. You both read Xilinx, AMD comes along, acquire for 49ish billion and now you're part of AMD. Can we give clarity? Because I think one of the unique elements was how does that pan out? Where usually does one corp dev team overtakes the other? What does that usually end up Cause like that where sometimes they just end up winding down a whole M and A function. But it sounds like you're in a different scenario here.

The deal structure was a merger. I'd characterize the team structure as a merger as well. They had a pretty seasoned strategy team that also did some M and A and some venture investments. We didn't really have a strategy team strategy was really driven from our CEO and we were very experienced more on the M and A and integration side and venture side. So I think we complimented each other in terms of those two groups coming.

Together post close really the same on the integration side. They had done some deals historically but there wasn't really a programmatic approach or a full team, a methodology playbook for the integration side and Jeff and I were fortunate that we were able to keep our partnership as we moved over from Xilinx into amd.

It's really interesting how it was more about bringing the teams together and getting the most out of the skills and capabilities as opposed to just eliminating for costs. What's the plan now? Is AMD going to be a proactive buyer from now on? Is that something you discussed with the CEO? What does that look like?

So we had a had an analyst day a few weeks back in the middle of June and talked a little bit about strategy there. Certainly M and A was listed as part of the sort of capital allocation strategy Going forward the expectation is we'll continue to be acquisitive strategic, strategic M and A. So people buys bolt ons as they fit within the overarching company strategy. We did do a deal right after we merged with Xilinx. So we bought a company called Pinsando which closed back in late May. Any indication of three months or you know, less than three months after closing the dance point of 49 almost $50 billion deal, we're out shopping and doing another billion dollar plus deal. I think that kind of gives you directional sense of M&A's role at the company going forward.

That sounds complicated. Like you're, you already have an age integration progress, you're adding another one. How do you even manage that?

It's not necessarily a place that's terribly comfortable Kisam, but it is to some degree the reality of companies like ours that see these opportunities. So Jeff mentioned Sando. It was one of these targets that was really hard to pass up even if in theory we were not necessarily ready for the digestion that accompanies another couple of billion dollar deal. Now we're working as you can imagine to define the end state roadmap for the greater merger. AMD Xilinx, that is. And as always then thinking about these future deals that come in, what are they integrating to? What is that end state? And it requires quite a bit of education, quite a bit of communication. You can imagine a lot of the people working on both the deals which is very beneficial in that they know what that transformation looks like. For AMD Xilinx then the downside is they're awfully busy on the integration side. We're doing some phasing of the work that we're doing and maybe as expected we're really focusing on firstly those things that drive value of course making sure that we have the necessary control of the company and that we're able to help scale them as a relatively small company that has tremendous growth opportunity. And then over the longer term you can imagine we will converge to what is then a unified company's end state across processes and systems.

A lot of work for you, my friend.

Absolutely.

Getting back on the strategy of M and A, I'm even thinking of how the companies merge together and like you referenced, there's just unique capabilities. Strategy focus versus execution on deals. How does that come together? Is that part of doing the deal to begin with? That hey, they got some unique capabilities in assessing the M and A function or is this stuff figured out afterwards?

A lot of it's figured out afterwards and we're a unique situation with respect to some folks coming in, some folks leaving over the past couple months. But I it's really a work in progress to figure out the appropriate handoff between the different levels of the strategic thinking that the strategy team and where the M and A team steps in. That's still very much something that Dan and I did not deal with when we were at Xilinx because there wasn't a strategy function. We did a little bit of that with the CEO. But now we have a dedicated strategy team which is really helpful to provide some guidance around areas and opportunities for us to go off and chase down. But it's a work in progress in terms of streamlining the handoff between the two roles.

What's it like being acquired? Why didn't you go through that and start thinking about the next thing? Or what's it like being acquired?

As I mentioned earlier, it is a completely different perspective from the point of a practitioner. It's a good experience to go through because it is informative to how we pursue deals in the future and how we think about employee experience and communications. Beyond the kind of nuts and bolts of the integration, it's different. Right. So we were sitting on the other side of the table. We were able to participate. There was very much a two in a box model really across the breadth of our functions. And we in corp dev partnering with some of the classic AMD executive team along with some outside advisors as you can imagine. So just a different perspective I would say, but something that I know I certainly can bring forward to the way we practice. Integration.

You had a real immersive experience being the acquiree this time around. What's like the big lesson learned? It's the bad that you learn from that you can improve on.

Maybe to echo Dan's point around employee experience, I think that's really. And culture really As a deal guy, a lot of times those are secondary or tertiary. It's like what you're thinking about in the midst of a transaction, but they're really important. My biggest takeaway was now I know what every single employee feels when we announce a transaction. I've experienced those thoughts. It gives you a unique exposure. It's much more relatable. I think that allows you to think through either better ways to communicate or anticipate employee questions or onboarding related matters. All these things that can really help improve getting to close and post close and having the acquired employees feel more like part of the team going forward. So very educational for me personally.

Part of the role of Corp dev is to be advocates not just for our own company, but for the target. And now we've been the target. So to Jeff's point, we felt some of the pain or we've understood where things could be bettered. I think a lot of that is some of the stuff that Jeff had mentioned. Think about communications and change management and all of those aspects of employee experience. And then just the recognition that of course Xilinx, already growing AMD pre acquisition, had a tremendous growth curve already. Then you layer on the additive integration work and new training that's required on any number of tools or processes. There's just a lot that hits employees and it does make me realize once again that when we ourselves make a purchase, we need to be very thoughtful about what that legacy team is doing and what the additive integration work is going to do to them. Certainly the imperative has got to be business continuity and right behind it, employee experience. And how you kind of balance those two can be tricky. But if nothing else, we have very recent experiences and lessons learned that we can apply.

This is the ultimate M and A training experience. This is like going taking like an intermediary to advanced level going through this. I don't know how we can simulate it for other practitioners to learn from on the strategy. Now that you come together and start working with strategy, fleshing out what that looks like specifically for M and A strategy, how do you communicate that with the rest of the leadership team?

The leadership team is pretty heavily involved with this as well. There are certainly inputs from all the different leadership around areas of focus. Obviously corporate strategy at the top level has a significant amount of involvement from our CEO. Lisa Susan, then you're getting that into how do we break this within the broad businesses that we have under the company now? Because it's not just a legacy or classic AMD structure. You've got designlinks businesses. There's some overlap there in terms of markets that we play in just different products that we're supporting. So really trying to break that down into the nuts and bolts within the different business units and then make those actionable for what Dan and I do. That's again inputs from really the entire executive team to a certain extent. But it is an iterative process and it's something that is constantly evolving a.

Big driver or a theme around. Here's what we're going to do. We're here to beef up them and they function to do more of these deals.

There was definitely value seen in the fact that Dan and myself had done a number of transactions. We had processes well in place at Xilinx that worked and were proven to work. And I know that the leadership team at AMD saw that as an opportunity to evolve those as part of a broader and much larger company that has more cash flow, could do some different things, plays in different markets. Dan and I both have had a chance to present out to the leadership team around what our processes look like, how they work, case studies of them working. There's buy in, but how long was it dan? Was it 15 months from signing to close? I think we had plenty of time to kind of get a lot of time. Yeah, lots of time to get folks at AMD affiliated and educated around the stuff that we had done before we became official employees.

So now we got this goal of combining companies M and A capabilities. What were the first things that you needed to implement or change in preparation for the companies coming together and after.

Firstly, and there was a bit of this when we were more purposely building out the capabilities within Xilinx as well. But you need to understand where you are, that is the company culture, receptivity to who the decision makers are and that varies pretty markedly between companies. I think even between Xilinx and AMD there are some significant differences. The way Jeff and I have been approaching it and this is still work in progress is recognizing that we are not where we were that 16 months ago. Now we have a new set of players not only at the executive level but at the working level, those cross functional teams that we really depend on to execute the work that we're doing. And so we're starting with a somewhat lighter touch approach, something that is more palatable and in the spirit of acknowledging how much work is going on in the company and in independent of M and A. It's easier if you start small but show that having some structure around deal making or deal execution or integration Execution does in fact bring benefits in a way that you can't see if instead people are left to their own devices to go off and get these things done. So we're starting small. We're part of our charter. Our remit for the upcoming number of months is to implement a playbook and processes more fully in amd. But that's going to be with the partnership of a number of people, some of whom are not clearly identified yet. I think we'll get there. Now that there is this acknowledgment that M and A is absolutely a strategic priority for the company.

That's pretty cool. You in some ways are rebuilding the M and A function to adopt around now the expanded business lines. The key things I heard was initially learning culture, decision making, that there's some distinct differences between the newly added teams and then shaping the team structure. I guess there's two parts of structure. There's the people side and then there's more of the operational playbook side.

That's a good summary. This is a work in progress. That is this is not to Dan's point. It's going to take some time and we're starting small. But deal flow is not slowing down, it's speeding up. We're seen as more of an acquisitive company. Therefore we got a lot more solicitations the market dynamics right now there may be some assets that are more in play versus what they might have been if things were different. So certainly deal flow is there. We just have to work on building that muscle memory with folks across the organization to execute more programmatically and efficiently.

With the people side. Do you find yourself now working with new leaders that are new to M and a part of the exercise of building the muscle diligence and integration, I'd say for sure.

And Jeff should chime in here. We have a great team, people, very experienced functionally, but maybe not as used to working cross functionally in pursuit of M and A. We have bits and pieces and thankfully we have some people who do have some experience. But absolutely part of our role then is to educate, expose again being mindful about what people are able to digest and really focusing on those things that add value. But yes, we're looking to build those teams out in a way that we can be assured moving into the next at least sizable deal that we have a good structure in place, people have a bit of that muscle memory and we're able to be all the more efficient. Then once we start moving the leadership.

Team at AMD obviously they've done M and A. They participated in the Xilinx deal. If you think further back, there's some deals that AMD did five, six years ago. But the cadence and the pace of deal making is probably the big change around being able to understand the amount of time that these transactions can take. Especially if you're doing multiple transactions that are going into different business units. The support functions still need to be able to help out with certain aspects around supply chain or diligence or whatnot. And I think that's probably maybe a big thing is just okay, the team has done M and A, but have they done it again programmatically and repeatedly? The answer to that is no. Where Dan and I have been educating, trying to establish more processes is to allow for that to be a bit more streamlined and efficient. Because it's one thing to just do a deal once every five to ten years, another thing to do five to ten deals a year. It's just a different level of commitment that needs some buy in education and structure.

There's also this goodness about having some continuity across the teams we enjoyed at least in the last couple of years at Xilinx after we had done a bit of the build. Having a team who were responsive to us in a way that they needed to be when it was deal time, but also a team who was comfortable enough with each other and knew what other functions were delivering. To have the tough conversations and to have the cross functional meetings without us necessarily pushing them to it, that's some of the muscle memory, but it is the relationships and it's knowing how each other work and what buttons to push. That's again something that takes time to build and often is built only after you've been through a couple of deals that may result in the beatings that Jeff's banner suggests.

What does the whole banner say? Because it's a nice slogan. The beatings will continue until morale improves.

The morale improvement part, I think is what Dan's alluding to. After you get a couple deals under your belt, it's the whole like team forming, norming, storming, performing metric, right? You start to understand how to work with others and you're getting deals done. It's easier. You're just in general, I think you get a lot more buy in. I think Dan and I, the first deal we did together, I think we really bonded in one of Dan's favorite cities in the world, Beijing, China. He clearly loves going there. We had a lot of opportunity to get affiliated with the integration role and the handoff from the front end to integration in Beijing for other folks who are working on deals, part of hr, finance, accounting, being able to loop them in and have repeated owners just builds that muscle memory. Also, the relationship with us for a deal and integration standpoint, where they know how to work with us and vice versa, it just makes things a lot easier.

If we click down get to the functional leadership level, what does that look like? Guess there's a lot of different direction there. But I'm curious, when you look at developing the muscle there and we talk primarily around education and then the relationship building piece, what are you doing at that level?

Maybe I'll take you back to some of what we did at Xilinx in the early days. Part of that was beyond just Jeff and I meeting with folks. We did bring in some outside advisors to do their pro bono pitches. I think it's always useful to get that external perspective so that people see what are ostensibly best practices in, for example, it M&A integration. And it really gets the juices flowing and the leaders thinking about, boy, if we're doing these deals, there are other considerations for it than I might have otherwise on a daily basis. And I'm clearly going to need to allocate more people because a sizable deal brings a sizable number of processes and tools and terabytes of data, all of these other things that need to be considered by the function. So that was a good way to get people exposed to what was out there and what they might be getting into. And then for quite a period of time back in the Xilinx days, we had biweekly sessions where we would have all of our functional leaders spanning anywhere from HR to IT to facilities join us and we'd actually have information sharing sessions. And these were topics that included due diligence. What is it? What are the various components? What does a due diligence checklist look like? How should we think about the context that we're sharing with the target as we enter into diligence all the way through integration, planning and execution and all the rest. We spent a lot of time back in those days doing that kind of thing. And much of that resulted ultimately in us getting some pretty robust documentation together, really. Our M and A playbook that we've memorialized in a sharepoint on the Xilinx side. And this is some of what Kisan, we're looking to port over, but to be thoughtful about how we take what worked over there with the continuity of functional needs that we enjoyed and recognizing that we don't quite have the same group anymore. How do we take bits and pieces of that? We're just getting into this now as we're coming out of AMD Xilinx merger to some degree in the middle of Pizando. But next up is how do we prepare ourselves this way and the teams for the regular M and A that lies ahead.

What goes in your playbooks?

What doesn't go in our Playbooks? It's a bunch of information. So when I think about the Playbook, it's an overarching term. But we have at our level, at the corp dev level, we have overarching process flows for deal side and integration side. That's the baseline people on what the key deliverables are across the various phases, anywhere from strategy and targeting all the way through integration execution, as you can imagine, at a functional level and even cross functional. We have further definition of things like default charters and team structures, process flows, governance structures, all of those things, along with supporting templates, of course, because we wouldn't be a corp dev team without templates. So it's really all of that stuff that we consider the Playbook. Now that said, it's only as good as the people operating the Playbooks and as good as their knowledge. We have plenty of stuff that worked very well for that group of people that we had, a stable group of people at Xilinx. The muscle memory was largely established in some areas of the Playbook. Very little guidance was required. They knew what the uber objective was and we weren't necessarily terribly directive about the the templatization. Now if you switch over and you get a new set of people, you can imagine that it's not going to be a natural experience. They wouldn't know where to look or more context may be needed before they go off and develop an integration plan. For instance, if they've not yet had any experience in developing that. That's kind of where we are today with our Playbooks.

You structure a process, cover a lot of different components and what that looks like. It sounds like there's a whole order of change management around this to get everyone aligned about what this new approach looks like. How did you manage that? How do you actually get people to adopt and do things different?

I think right now, Jeff, a lot of it's a bit ad hoc. So back to we're coming off a $50 billion deal, then we make another $2 billion purchase, which is very strategic. And I think Jeff might have a few other things cooking as well. So again, we can't do Everything. A lot of this, it's a little bit of whack, a mole, it's not quite that right. But we will sometimes have to address problems or introduce people very quickly to a deal and deliverables needed without necessarily having the time that we would like to provide context and training and all the rest. I think it will be a bit of a mix. We'll resolve problems as they come up and then separately we're trying to work a path towards more of a programmatic approach to upskilling and training folks as we get those folks identified on the broader M and A team.

I didn't get any easy hacks out of that.

I'm leaving the easy hacks. Jeff.

There's no easy solution in implementing a playbook or change management because M and A is so dynamic that there's never going to be a storyboard that you can follow and figure out a solution for every single problem. It's not realistic. There's always something that comes up in every deal that is unique and maybe somewhat tangential to what you've experienced before, but it's still different. And for change management, one of the things to kind of highlight there is this is a business process and it's an engagement and it is very unstructured. As much as we can set boundary conditions around this is when diligence needs to happen. Here's who's involved in diligence. Here's the report outs. This is when integration, the IPOR comes together. These are the steercos different constituents within the steer codes. It is fundamentally very dynamic and certain companies value structure more than others. And I think that with respect to being in a larger company where processes are very well in place, there's a bit of getting comfort with uncertainty and risk. Really the best acquirers out there are the ones that understand the trade offs with respect to deal making and risk. And that's something that I think just takes more reps for folks to get comfortable with.

M and A teaches you how to be a startup.

Yeah, for sure.

I'm still getting hung up on the $50 billion integration part and I'm just curious what's the scope of that? I've never worked on a $50 billion integration before. Can you give me a sense of how many people are involved? And even thinking about that timeline, how much of that is really planned out versus as you just described, being dynamic.

On the integration side, it's been fairly well planned out for some time now. We enjoyed in quotes the 450 days or whatever it was between the time of announce in late October of losing my year is 20 and the close in February 14th of this year because it was announced, obviously we were able to do quite a bit together, some of that under separate agreements via clean room, as you can imagine imagine. And given the transformative nature, this is obviously a potentially make or break the company kind of deal. The full executive team was aligned. So if I think about who the functional leaders were or continue to be on that deal, it's people at an evp, SVP level with CEO involvement all the way along. So again, lots of visibility, lots of attention necessarily it became really the priority effort alongside of course the organic development efforts. And now with the close of February 14th, we're looking at integration that shouldn't extend very far out into the next calendar year and that the primary thing that we're looking to deliver here is leveraging this opportunity to do, you could probably guess, ERP upgrades. Again, not terribly unfamiliar when you do big deals like this. So two different shops we're converging on. One moving to obviously a newer, grander, better cloud based erp. And with that of course comes a ton of review of processes and business requirements and all the rest. Much of that behind us now we're really in the middle of testing and making sure that we're going to be ready to meet those release dates. So then you look at a arguably fully integrated two companies post the $50 billion merger by early next year.

So it's like a typical M and A integration, just a lot bigger.

That's one way to say it. Yeah, typical, but a lot bigger. Sizable cost, synergy expectations, very sizable revenue, synergy expectations. The other thing that's worth noting here is that the growth of amd, even Xilinx, was a growing company and added substantial headcount even in the three plus years that I've been there. But amd last couple of years, I can't remember the number Jeff, but outside of M and A had been adding 30% on top of their legacy employee base. So AMD, you have have a company growing revenue, tremendously. Profitability tremendously. The employee count tremendously. Then you throw on Xilinx and have this $50 billion deal with a lot of expectations as to what that can deliver. So it really is quite something that way. When you think about all those dynamics.

When you were in that learning phase to set out to rebuild the M and A function, how long did it take to really understand AMD as a business so that you can start doing acquisitions?

We did one pretty immediately After Xilinx and AMD close, to be candid, I think Dan and I are both still learning the business with respect to not necessarily the products or the markets, but really who are certain decision makers or representatives within different groups that we need to go and run ideas off of or talk to or who manages what really. It's a big company. There's 23,000 people as of last month, so lots of people. And Dan and I know who are the key decision makers at Xilinx. I think we know that team very well. You've got essentially another five to six businesses that require that level of people knowledge, really. And that's something I think we're still getting affiliated with. It'll take some time, but luckily again there's legacy AMD folks that we work with. And Dan and I recently have a new lead who runs strategy and corporate development. So he's also going around the hoop and getting affiliated with more people. So it's going to take some time because it's just a huge company, but the goal is to make this more of a repeatable world class function within amd. And certainly we had that at Xilinx. And yeah, we just need to up the scale here with respect to replicating it at amd.

You went through a unique experience with this transaction. Now, what you're currently working on, what are your top lessons in M and A that you teach at AMD or other Corp devs?

I would just mention one of the reasons why Jeff and I came together for this podcast is because we're both proponents of a fully aligned Corp dev team. I know that is a best practice. Sometimes it's just given lip service, I guess. Some of the good news is we both went to perhaps the best university in the country, so we share some heritage from our academic upbringing. We partnered very closely starting early on in the Xilinx days here and we not only worked well together, but we game plan together. You can imagine we're often addressing the same set of constituents, whether that is business sponsors or it's the folks within key functions like hr, finance, legal, tax IT and others. For that to be a bifurcated conversation doesn't make a whole lot of sense. If Jeff's telling them one thing and setting expectations and then a week later I'm very involved with the same people on integration but preaching a different message. And I don't know what Jeff communicated. That's just not a good place to be. And so we very early on recognize that maybe even more than you see in most places There's a lot of value. Jeff will pull me in early on things and I could figure out how much time I need to spend. And Jeff will stay involved for quite a period of time because again, he being on the front end, develops a lot of those relationships with sponsors and others and of course understands the deal model, the deal thesis and those elements that are critical. So we really have some good continuity. So back to your question. If the opportunity presents itself, I would say having a corp dev team that operates that way and having the head of the deal team and the head of the integration team really partnered up and working closely together is absolutely a best practice.

How do you do that? You just have everybody report up to the head of integration to make that work.

Over the years we've reported to an SVP of corp dev and strategy, so that hasn't changed. So Jeff and I have been peers reporting up from there. But again, this is our choice in the way we run our teams. We encourage our teams to often be in the same meetings. We're in diligence together, some of these phases where there is naturally overlap. So a lot of that is. I don't know that it's even intentional other than at Xilinx. Certainly a small enough team where in a team that naturally got along well that these things developed, we'd be in close proximity as well. We've enjoyed that, which I know not all companies have. And that's allowed us to really be very attuned to what the other was.

Thinking less about governance per se, but more about actual combined activities you're doing together.

We can talk and belabor the processes and the skill sets that you're looking for to build out a team to make this effort successful. But I really think it's culture and fit. Dan articulated it very well. We have a team that likes working together, knows how to work together well. There's no real sharp elbows. People understand when they communicate well. And I think that really started with Dan and I back when he joined back in 2018 and we worked on a few deals pretty rapidly and just we get along well. I think we both respect each other's roles within the company and understand the value and we also both understand that we need to be in constant communication and constantly aligned to make this work and have our constituent partners not feel like they're talking to who's on first or they're talking to different people on the corp dev team. We're shared alignment with respect to that. And personally I think it's really comes back to A hiring decision. Dan and I were brought in. I started about a year before Dan. But certainly culturally we work very well together and I think that's so critical within this function. If the deal guy is overwhelming the integration guy and there's not really alignment there, that can create a lot of animosity. If the integration guys are not able to support some of the front end work or pushing back a lot more, that just creates friction and you really want this to be pretty seamless. So having leaders both in the front and the back end who work well are aligned and culturally just a good fit. It's extremely important.

Anything that sticks out around that. I get a sense that both of you are very type A and maybe that's why you both work well together. Is there anything that sort of sets the stage for a good partnership between integration and corporate development?

I don't know if we're type A or Jeff might be and I won't admit to being but I'm going to attribute it to good Midwest upbringing. Yisan this idea that we have to own our stuff and we ultimately want to do the right thing. We want to do a good job. And again, you can't do that independently or you can't do it with those sharp elbows that Jeff mentioned. I think that's just how we are trying to do the right thing for our company. And like I said before, I would argue also for the target company. The other thing is Jeff and I both enjoy the same hole in the wall Mexican restaurant down the street. That's been another good way to bond over the years.

That's a big Californian thing. Everybody know an M and A has got their favorite hole in the wall Mexican spot.

Absolutely.

It's a cultural significance for I think Dan and I. Yes.

Try to think of the corp dev teams that don't operate that way because there's probably more that don't than do I suspect.

You're right.

I'm just thinking if we're to provide some transformational aspiration or something like what would that be besides the social find your local Mexican hole in the wall.

I just go back to what Jeff just said and then invite him to chime in again. But a hiring decision. So ultimately if you have that CFO or your SVP a corp dev and that person gets to make some hires or makes one of these hires, I think that person should be thinking beyond just raw skillset and experience. It's. Let's figure out now how. I'm not quite sure but is this person I'm hiring to lead integration compatible with my deal that you or deal leads. I think there could be some more thought put into that than probably traditionally is. And certainly the deal lead or the integration lead could be part of that interview panel and really have a say. Be able to ideally suss out early on whether there could in fact be that sort of compatibility.

The deficiency I see is the thinking about integration early. Just get a good idea of what exactly you're doing with go to market. How do you evolve that thinking? They feel like that. Then you're at least setting the goal of hey, here's what we're trying to achieve. That is the basis of those hiring decisions. I'm just wondering how do you. I don't know if you had evolved that over the years.

Dan and I are both based in San Jose or we work in San Jose. Being in person is important. I know that virtual environments are more and more acceptable now, but just given the dynamic, it's really good to be in the same location. It probably wouldn't be as song of a tie in Dan was on the east coast or vice versa. I think a lot of it is as a deal guy you're beaten down to be ultra sensitive with everything that you do and to keep the team as tight as possible. I think there's a bit of understanding that you have to bring in integration early and it just will save you so much effort and frustration if you just do it and it's one or two people you're bringing in. And frankly integration can sometimes call out. And. And Dan does this very well. What is the offer strategy? What is the go to market strategy? And all these questions that sometimes are maybe overlooked when you're doing preliminary due diligence and trying to think through just high level strategic fit versus okay, how do we operationalize this? Let's maybe start thinking about that now. So there's a lot of benefit in doing that. It's just I can probably speak for a number of corp dev deal guys where it's just got to keep it very tight. We can't open up the working group list. We can't expand that much more. We need to keep it very tight, very confidential. But. But you got to get over that and involve your partners who help drive the value creation on the back end and just bring them in as early as you can.

That's great advice. There anything else in terms of key lessons?

I think it's sort of the motherhood and apple pie stuff. So not unfamiliar. But the sponsor engagement, making sure that person Clears some headroom to be able to really focus on a deal in addition to his or her other job, which often is leading. Jeff talked about the commercialization aspects and thinking operational early. Certainly a best practice. And that's something where I rely on Jeff to start that conversation that allows me to continue it later in the deal. But it's a lot of that stuff, Kisan, that you've had other practitioners talk about on your podcast series before. I just think that we maybe are a little better at partnering than your average Bears as well. And so that's why we're double clicking on that as the best practice. If it is something that could be affected.

It sounds like there's some good coaching involved and just relationship building with the BU as well. I'm curious about how your relationship evolved the first deal. Do you get along? Do you have little things that come up? There's always a lot of cliche things that integration folks say about Corp dev and some vice versa.

I would just say as Jeff mentioned, the China deal. So we did have very early on, I think in my first month almost we had a couple of deals, one in Europe and the one in China. But the point being that we were right into it. We were doing some of that building while we were executing deals. And the good news is that did allow us plenty of time to bandy about these different ideas as to how we do things as maybe small but still meaningful as how do you onboard employees, what does that activity look like? What does it need to encompass? And. And in this case we're sitting there in Beijing together seeing how it played out in a legacy Xilinx construct in real time, having discussions about how we would better those processes going forward back to the spirit of employee enablement and making sure the experience is a good one and focusing on those things that drive value. A lot of it is just time in the trenches very early on and being pretty open now. Did we disagree about some things? Sure. But eventually I was able to correct Jeff and we came to some agreement, I think and the meet in the middle and certainly he's got a lot of experience on the deal side and we just blended those approaches and it's worked pretty well.

Jeff, you got a least favorite thing about working with Dan.

I only have a few more minutes here.

Yeah.

Exactly how much time do you have to I guess echo a little bit of what Dan was saying and maybe give him a bit more credit here? When he joined, we didn't have somebody that was focused on integration. It was me and my Team essentially doing everything. And when he joined it was really after we were in contract and we hadn't closed yet, but we were in contract and we'd gotten to signing and we were going through some regulatory reviews to get to close. And the approach around integration hadn't been thought through as much upfront because there was so much effort put into just getting to signing because it was a very complicated transaction. Very complicated Chinese company, lots of nuances there. Not going to get into all the details, but extremely complicated. One of the harder deals in my career, frankly, when he joined it was refreshing to me to have somebody that could help focus on it.

But.

But to going back to an earlier point around bringing them in earlier, this is a great example of Dan wasn't involved early. And so a lot of things around the go to market and some of the other employee enablement, different strategies around sites, et cetera, these all were not necessarily fully fleshed out. He was able to get those up to the top of the stack, so to speak. And I think that really helped make that transaction more successful than it probably would have been on the back end. And he did that relatively new to the job. So what I think the relationship. Going back to your original question, Kiesen, the relationship's evolved to the extent that I've just been able to work with him more and I understand how he runs the back end and that's just helped me help him and I think vice versa with respect to our different roles. But that first deal where he parachuted in after joining and after we were in contract, it's just a great example of just not having the integration focus up front and how that was challenging probably for him to get into that type of project where there wasn't a fully flushed out integration plan or even a preliminary integration plan. It was very bare bones. So he helped remedy that. But it's again an example of how the benefit of involving the integration team early is can really help with the execution.

It's a really great example. Early start on integration. Before we wrap things up, gentlemen, what is the craziest thing you've seen in M and A?

There's obviously crazy on every deal. I think about those things, I look back and I think it was more humorous than anything else. Maybe silly at the time. So let me go with silly instead of crazy. I still like an example from long ago where I guess not naming companies but we were a Coca Cola shop and the acquired was a PepsiCo shop. And so the vending machines and break rooms varied and I Remember, we must have spent 25 plus hours of executive time debating on whether we were going to force this integration over to being a Coca Cola shop versus letting the Target retain their beloved Pepsi. So again, a silly thing. Not silly to everybody though, right? These are sometimes important. Maybe Pepsi not as important as the espresso machine, which often is a hot button issue on deals it seems. And yes, we do as facilities, teams and others need to be thoughtful about what's important culturally to employees, what they consider benefits. But again, one of the lessons learned is not worth that amount of time. And in MA you got to move pretty quickly to decisions. There are many decisions to be made and those need to generally be made quickly. And the quicker you make them, the more you're able to transition to the meaningful work, the work that truly drives value.

I like that a lot.

What'd you go with? Was it Coke or Pepsi that people want to know.

I really don't know where that landed, frankly. It may still be a debate.

I would have negotiated in for a cold brew and Kombucha on draft.

That's a recent challenge. A keystone is more recent. Kombucha. Maybe in the 90s it was the Coke and Pepsi. Yeah.

Is that a thing that you factor in for cost synergies? We have to cut some of that stuff out.

We definitely want to keep the snacks and all the different benefits there. The snacks are really important. The espresso machine, as Zan mentioned, the kegerator or whatever they have, it's certainly stuff for these startup companies you want to keep. I'll be quick. I think the craziest thing I've seen, it's all just people issues. And I could go on and on, on about people changing their mind or key employees that are critical to the deal just backing out last minute and blowing things up. There's just with these private company transactions where there's significant founder ownership, I've just seen it all with respect to folks who are extremely risk averse, to folks who just can't make up their mind on what they want to do. And it's very frustrating, but it's also, I think very common for these types of transactions. So there's a lot of stuff that I could use but just more. I'm never surprised by a human related issue that comes up during M and A, let's put it that way.

What was the most bizarre one you've seen?

Probably a group of four founders that we needed all four. One of them decided they didn't want to work and so the three founders spent an entire weekend with that one individual sort of beating them into submission to take the offer, which with some help from us. But it was a this is either going to be a deal on Monday or it's not. After months of sort of work to get there. That was up there and some of the reasoning for it was personal, but it was petty at the same time. So I don't need to get into the weeds there. But certainly when you have a deal riding on a human factor that could go either way, it just happens a lot. But it's just a very uncomfortable situation to be in.

That's a whole Todd track of its own emanating emotions. Let's talk through that. Gentlemen, thank you so much for taking the time. I learned a lot from this conversation and enjoyed getting both the pre and post sides of the deal on one interview. Seminary signs first and the beatings will continue until morale improves.

That's right.

Morale's improving though, hopefully.

Cheers gentlemen. Here's to the deal. Thank you for taking the time to explore the world of M and A with our podcast. We love hearing feedback. Tag us on a LinkedIn post, add a review on Apple Podcasts. We'd love to hear from you. If you need help standing up an M and A function or optimizing one that you already have, we're here to help. And if we can't help you, we probably know someone that can. You can reach out to me by email Kisan K I S O n@ascience.com or you can text me directly at 312-857-3711. If you just want to keep learning at your own pace, visit mascience.com for a lot more content and resources. That's where you can also subscribe to our newsletter. Again, that's mascience.com here's to the deal.

Foreign.

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