M&a Masters

When we usually see cross-border deals, it’s a U.S. company acquiring a foreign business. But increasingly the reverse is happening, says Craig Lilly, corporate partner at the Palo Alto office of Baker McKenzie, and there are three primary drivers for that trend. But cross-border deals with foreign buyers aren’t without their pitfalls, especially with newly enacted regulatory and anti-trust and merger controls – at that’s just the start.

What happens when a minority of shareholders don’t agree to the terms to acquire or merge their company? The terms could change drastically… or the deal could fall apart completely. But, says Nate Gallon, managing partner of the Silicon Valley office of Hogan Lovells, there’s a way to avoid that fate… because the shareholders will be contractually obligated to vote “yes” on the sale.

When you hear the word drone, you might think of the military uses, the proposed Amazon.com delivery drones, or those jokers who shut down airports by flying drones around runways. But drones are serious business, says Gretchen West of Hogan Lovells in Silicon Valley. There are little-known commercial uses of drones that save time, money, and lives that will only expand in the near future… as long as government regulations can keep pace with development of new technology.

It’s a tight talent market out there in the technology industry. And that’s especially for all C-suite positions right now, says Stephen Kuhn, partner at Advantary. Yet companies, especially startups, are facing pressure from their boards to hire senior executives. And that means they’re sometimes rushed into bad hiring decisions.

The politics of healthcare is a mess in this country, as you know. But Matthew Hanis, executive producer and host of the Business of Healthcare, is more interested in practical measures for incrementally improving a system that is the most expensive in the world and doesn’t offer a great quality of care in exchange.

M&A activity has been heating up in the last few years… and 2019 is no exception. At the same time there has been a lot of movement in the healthcare sector, but due to its unique nature, special care has to be taken when dealing with acquisitions in this industry. Patrick Krause, a director at investment bank MHT Partners focused on healthcare, has shepherded a lot of deals in this sector.

What did due diligence in M&A deals look like before virtual data rooms? Teams of lawyers and other experts combing through paper files stacked floor to ceiling in a conference room. With the virtual data room, explains Darryl Grant of Toppan Merrill, those days are long gone.

Many technology companies are sitting on an untapped resource that could add 5%, 10%, 20%, or more to their company’s value, says Dr. Elvir Causevic, managing director of Houlihan Lokey’s Tech and IP advisory department. Problem is that if you wait until you have an M&A deal… all that value is lost to you – it automatically goes to the buyer.

In an era when few companies go IPO and there are even fewer unicorns, M&A is more popular than ever, says Mihir Jobalia, a veteran of KPMG’s Silicon Valley operation. In fact, among VC-backed companies in the last 10 to 15 years, he estimates that more than 90% exit through M&A. And business in the last few years has been especially good.

With typical insurance covering your home or car, it can be like pulling teeth to get a claim paid. Unfortunately, that leads to skepticism about all types of insurance. But in the experience of my guest Joe Finnerty, a litigation partner with law firm DLA Piper in New York City, companies are ready and willing to pay claims for Representations and Warranty insurance. It’s one of the newest – and most effective tools – being used in mergers and acquisition deals today.

Silicon Valley is obviously on the forefront of technology. What’s not as clear is how to keep track of trends, new companies, key players, and all the rest, especially since it’s always changing. That’s why Bob Karr created LinkSV, a Valley-centric, comprehensive, and constantly updated social network. We talk about how to get the most out of LinkSV, whether you’re a service provider, startup looking for an angel, an investor looking for an acquisition, and beyond.

In today’s episode we shake things up and put Patrick Stroth, the regular host and founder of Silicon Valley-based Rubicon Insurance Services, in the hot seat for an exclusive interview with business consultant Steve Gordon. Patrick is on a mission to tell investors, founders, corporate development teams, attorneys, and anyone else in the world of mergers and acquisitions about a unique insurance product that can save tens of millions of dollars in a transaction and speed deals to completion.

Samir Shah has a unique pedigree in the M&A world. He was previously an owner whose company was successfully sold. And these days he’s with Silicon Valley-based pre-series A venture capital firm Cervin Ventures, specializing in helping founders in the enterprise technology space. Based on his experience Samir has come up with eight “one-liners” (i.e. rules or words to live by) that should guide every startup.

Many technology companies are sitting on an untapped resource that could add 5%, 10%, 20%, or more to their company’s value, says Dr. Elvir Causevic, managing director of Houlihan Lokey’s Tech and IP advisory department. Problem is that if you wait until you have an M&A deal… all that value is lost to you – it automatically goes to the buyer. Elvir and his colleagues have been innovating a new way to make sure companies, especially those in Silicon Valley, avoid that fate.

Hackers, corporate espionage, identity theft, ransomware… Any company connected to the Internet (and that’s all of them) is vulnerable to these attacks, says Jim Reilly, founder of Stonepine Advisors. These days, without a cybersecurity strategy, your business’s vital financial data, corporate secrets, and customer information is there for the taking. Not only can a breach impact profitability… but it can also put a serious damper on any upcoming or ongoing M&A deal.

In an era when few companies go IPO and there are even fewer unicorns, M&A is more popular than ever, says Mihir Jobalia, a veteran of KPMG’s Silicon Valley operation. In fact, among VC-backed companies in the last 10 to 15 years, he estimates that more than 90% exit through M&A. And business in the last few years has been especially good. We dive deep into what makes the current environment so appealing to M&A, who the big players are, and best practices for companies hoping to exit with this strategy.

The practice of revesting has radically changed the M&A landscape in recent years, says Michael Frank, partner at Hogan Lovells. It provides advantages to both buyers and owners and founders. Michael explains why revesting has become so widespread – especially in Silicon Valley – and the best way to approach these types of deals. It’s something you have to keep in mind from the earliest discussions between buyer and seller.

Where does our food come from? Who makes it… and how? It’s those sorts of questions that guide Stephen Hohenrieder as he invests private equity in all levels of the value chain in the food industry. There is a sea change in going on in how consumers relate to food, and Stephen, the chief executive and chief investment officer for a single family office, says it’s prime time invest in this trend.

One of the biggest sticking points during the negotiations for any M&A deal is indemnification. It’s a problem Nate McKitterick has dealt with for many years as a partner specializing in transactional insurance and indemnification matters at law firm DLA Piper. Basically, buyers insist that sellers be “on the hook” for any issues that come up post-sale. And sellers are nervous about making the representations required for a deal to go through… when something out of their control could cost them.

With the oil and gas sector seemingly on the road to recovery, there’s been an uptick in M&A activity, says Jimmy Vallee. As a native Texan and partner in the Houston office of law firm Paul Hastings, Jimmy should know. He’s got some strategies for taking advantage of this market rise. He also examines the role of private equity in this industry and best practices for mergers and acquisitions in this space – it’s unlike other industries and one “little” mistake could cost you millions.