Luckily, Time Does Not Kill ALL Deals

Special Edition: Get to Know the SDR Team

By Anthony Wong

They say time kills all deals. However, in October 2014, I closed the largest deal of my life and it took over 9 years1. The duration of project was due to many circumstances. One of the parties wasn’t ready for an acquisition or a merger due to its early stage nature2. The other party was focused on internal initiatives rather than a merger3. Capital was a constraint for both parties (We did end up raising some capital from related parties4). Overall growth opportunities individually and as a merged entity were re-examined at multiple points of the process. Most importantly, since the transaction was between two strategics rather than a financial buyer, the two entities needed to figure out if this deal was a strategic fit and if it was best for the long term success.

The happy coupleLuckily, the process was guided by trusted advisors5 who supported each party to close. Without these advisors, I truly believe that the deal would not have been completed or the merged entity would not be in such a position to successfully hit the ground running.

Nonetheless, the path to close was not easy. It was filled with stressful days and nights that seemed like closing was never going to come6. Outside parties tried to influence the terms and conditions of the close. Working capital was a large concern since the merged entity needed enough to sustain its day to day operations.  Overall capital structure was reviewed so that the merged entity was not over-leveraged after the merger. An earn-out was contemplated to compensate the seller for everything they were bringing to the table7. Even the day of closing was filled with surprises that we had to work through.

But in the end, the deal successfully closed and I believe both parties ended up very happy. Of course, you never know the success of a transaction until years later but for now (and the foreseeable future) the merged entities look to realize significant synergies and successfully create a growing enterprise. Look at the picture of the two parties now. Don’t they look like it’s the happiest day of their lives?

 

Hmm… I probably should have checked my nondisclosure agreement before I shared all this information about the transaction.

1We actually were dating about 10 years before we finally got married.
2We met when we were in high school so we weren’t really ready to get married until later on.
3Both my wife and I went to graduate school and had to focus on finding a career.
4Thanks to the parents of both sides for the money.
5Thanks to all our friends and family who supported us throughout the 10 years and up to the day of the wedding.
6Weddings are really stressful to plan when there are so many opinions to appease.
7I brought a lot to the table so I felt like I should be compensated above and beyond the purchase price. Haha, just kidding Hera. 

2017-06-08T11:42:02+00:00 SDR Ventures Team|