mergers and acquisitions the road to liquidity in the post internet age michael mcnamara senior vice...
DESCRIPTION
Background I was a computer architect in the 1980s… Co-founder of an EDA company in 1992 Merged it into Viewlogic in 1994 (now Synopsys) Started another EDA company in 1996 Merged it into Verisity in 1999 Verisity made its IPO on 3/21/01 as $7 Stock has done well since thenTRANSCRIPT
Mergers and Acquisitionsthe road to Liquidity in the post internet age
Michael McNamaraSenior Vice President, Technology
Verisity Design
Background I was a computer architect in the 1980s… Co-founder of an EDA company in 1992 Merged it into Viewlogic in 1994 (now Synopsys) Started another EDA company in 1996 Merged it into Verisity in 1999 Verisity made its IPO on 3/21/01 as VRST @ $7
Stock has done well since then
Sometimes you hit… A Home Run
Cisco, Apple, Yahoo Some times just a double Or you strike out If you get on base: make sure you score!
How do I do this?
Review: Criteria for IPO Growth Market Revenue Profits Experienced Management Merger capable
How to Grow a Company Growth by Acquisition (A)
Most explosive (!) Growth by Focus and Execution (F&E)
Always needed Growth by Joint Sales and Marketing (JSM)
Collaborative Growth by Development of Additional Products (DAP)
Predatory, Expensive
Acquisition How to acquire
Many professionals will be happy to help you
Whom to acquireMinimize pain, maximize gains
How to be acquiredTiming and fit are importantIt’s good to be on the winning team
Company Stages 1: Idea
Two guys, a garage 2: Proof of Concept
Above + a demo 3: First Customer Ship
Someone will buy it! 4: Proliferation
Get channel
5: GrowthSell. Build. IPO?
6: Steady StateOwn a market
7: ConglomerateAcquirer
8: End of Life8 track tape
Good Combinations Growth + First Customer Ship
It works! Little overlap; still some risk Growth + Proliferation
Market exists; some channel conflict Conglomerate + Steady State
More revenue; Economies of scale
Not so Good Growth + Idea
All risk, when revenues are needed Growth + Growth
Internal fights Anything + End of Life
Buying a name
Where to find partners The singles bar…
Trade shows / magazinesPartnership Programs
Adjacent marketsExtend the reach of both companies
Don’t merge with a competitorNow the fights will be internal!
How to merge Signing the docs is the first step
It will take longer than you imagine Focus on cementing the union
Fly everyone to the other officeTransfer people between the old companies
Be open to new directionsA.E. becomes Sales; Engineer becomes Tech. Marketing
Study those who have done it wellCisco
Thank you for your time Questions? [email protected]