M & A work is sometimes considered to be a kind of pinnacle in the corporate world. It is regarded as a type of top-tier exercise for at least three reasons:
- It is an exclusive club, which one only enters by invitation of current and experienced members.
- It requires a fairly sophisticated level of business knowledge, at least in theory, to navigate the labyrinth of information and intrigue involved.
- It takes some real guts to hang in there, when tens of millions of dollars are being tossed about like so many feathers in a pillow fight.
Mergers and Acquisitions is just what it sounds like; the aspect of business life wherein one company goes out and searches for another company with which to merge or to buy outright.
It is, however, at least in my experience, the business equivalent of Red Rover - the game we used to play as kids, wherein two groups would line up facing each other across about twenty yards of open ground with arms locked, and then a member of the opposing team would come running at full speed and try to break through the line.
The "open ground" in corporate Red Rover was often the data room. The first time I was given access to the data room, during a "top secret" due diligence phase of a potential purchase of another company, I felt like I had been given permission to enter the corporate holy of holies. And, frankly, I wasn't at all sure I wanted to go in there.
I was biblically knowledgeable and could easily recall that any priest who went into the holy of holies unworthily, would be struck dead and have to be hauled out by those on the outside, pulling him by the rope tied around his ankle, that had been placed there in advance for just such an eventuality.
The data room was essentially a website managed by an outside third party hired for the purpose, in which various proprietary documents and statistics were housed confidentially for perusal by executives and analysts of the potential acquirer.
The first time I tentatively tip-toed in (electronically speaking) to the sacred data room, I was overwhelmed by the variety, density, and specificity of the information. And that was just the table of contents document, which was approximately five pages long.
Yikes! Were we trying to make a decision to buy a company, or preparing for a NASA space launch? Overwhelmed did not described it: try dumbfounded, awed, and pretty ticked off. What idiot had turned me loose in the middle of all this, expecting me to ferret out whatever might pose a threat to our company, without giving me any direction or instruction?
Oh, wait. That idiot would be my boss - a gentleman with two advanced degrees, and ten years experience with a renowned Swiss banking operation. As he once said to me, "A hundred million here, a hundred million there, and pretty soon you are talking about real money." He smiled, a small terrifying smile, as he said it.
Gulp.... time to pull up my pantyhose and wade in....
Note: This is the first in an intermittent series on my adventures in corporate America. Because I came from a very small town and was raised in a basic Christian tradition, I often thought of myself as "A Country Christian in Corporate America" - kind of like Mark Twain as a Connecticut Yankee in King Arthur's Court.
Unfortunately, while it turned out Twain's protagonist was actually having a dream, my own experiences turned out to be more like an oscillation between dreams , reality, or nightmares, depending upon which day of the week it was. Hope you will tag along on the journey.