Mergers and acquisitions
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Mergers and Acquisitions. the road to Liquidity in the post internet age Michael McNamara Senior 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)

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Mergers and Acquisitions

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Mergers and acquisitions

Mergers and Acquisitions

the road to Liquidity in the post internet age

Michael McNamara

Senior Vice President, Technology

Verisity Design


Background

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

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

Review: Criteria for IPO

  • Growth Market

  • Revenue

  • Profits

  • Experienced Management

  • Merger capable


How to grow a company

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

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


Company stages

Company Stages

  • 5: Growth

    • Sell. Build. IPO?

  • 6: Steady State

    • Own a market

  • 7: Conglomerate

    • Acquirer

  • 8: End of Life

    • 8 track tape

  • 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


Good combinations

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

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

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!


How to merge

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


Thank you for your time

Thank you for your time

  • Questions?

    [email protected]


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