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Published byImogen Mosley Modified over 8 years ago
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Mergers and Acquisitions the road to Liquidity in the post internet age Michael McNamara Senior Vice President, Technology Verisity Design
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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
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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?
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Review: Criteria for IPO Growth Market Revenue Profits Experienced Management Merger capable
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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
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Acquisition How to acquire Many professionals will be happy to help you Whom to acquire Minimize pain, maximize gains How to be acquired Timing and fit are important It’s good to be on the winning team
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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: Growth Sell. Build. IPO? 6: Steady State Own a market 7: Conglomerate Acquirer 8: End of Life 8 track tape
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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
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Not so Good Growth + Idea All risk, when revenues are needed Growth + Growth Internal fights Anything + End of Life Buying a name
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Where to find partners The singles bar… Trade shows / magazines Partnership Programs Adjacent markets Extend the reach of both companies Don’t merge with a competitor Now the fights will be internal!
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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 office Transfer people between the old companies Be open to new directions A.E. becomes Sales; Engineer becomes Tech. Marketing Study those who have done it well Cisco
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Thank you for your time Questions? mac@verisity.com
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