Corporate buyers are notoriously secretive and rarely reveal their inner workings. This is why the latest episode of Built to Sell Radio is so valuable: It provides a rare look into the secretive world of corporate M&A.
Christopher Vollmond-Carstens is the Chief M&A Officer at Ntiva, where they help businesses keep their technology running smoothly, from managing their computer systems to protecting them from cyber threats.
Christopher has bought fifteen companies in the last few years, and this week we take a walk inside his mind to understand how he thinks about buying companies.
This episode, part of our Inside the Mind of an Acquirer series, offers unique insights into the corporate development division of a big company.
You’ll discover how to:
Fit the investment criteria of a corporate buyer.
Defend against becoming a “proprietary deal.”
Use a structured process to drive an acquirer’s decision making.
Survive diligence.
Evaluate the pros and cons of creating an auction for your business.
Leverage what’s important to a corporate development executive to get the deal you want.
Avoid being re-traded on.
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About Christopher Vollmond-Carstens
Christopher Vollmond-Carstens is a seasoned professional at Ntiva, bringing extensive expertise in IT services and solutions.
As a key team member, Christopher plays a crucial role in driving the company’s mission to provide top-tier IT support, cybersecurity, and cloud services to businesses.
His commitment to excellence and deep understanding of technology ensures that Ntiva’s clients receive innovative and reliable solutions tailored to their unique needs.
With a passion for helping businesses thrive in the digital age, Christopher Vollmond-Carstens continues to be a valuable asset to Ntiva and its clients.
Definitions
Due-Diligence:
This is a comprehensive appraisal of a business or investment undertaken before a merger, acquisition, or investment. It seeks to validate the information provided and uncover any potential risks or liabilities.
Earn-out:
This is a financing arrangement for the purchase of a business, where the seller must meet certain performance goals before receiving the full purchase price. It reduces the buyer’s risk and aligns the interests of both parties post-acquisition.
Liquidation Preference:
Let’s say you’re at a party, and everyone at the party has chipped in to buy a pizza. But before the pizza arrives, the party gets cancelled. Now, you’d want to make sure you get your share of the money back that was collected for the pizza, right?
In the world of business, a “liquidation preference” is a bit like that. It’s a rule set in a contract that says who gets their money back first if the “party” (in this case, the company) has to shut down and sell off everything it owns.
Usually, this rule is set up to protect the people who took the biggest risk by investing money into the company. These folks usually own something called “preferred stock,” which is a special kind of ownership that comes with some extra privileges. One of those privileges is often a liquidation preference.
So, if the company goes under or is acquired, the people with the liquidation preference (usually the investors or preferred stockholders) get in the front of the line to get their money back. They get paid before anyone else, like employees who own regular shares (“common stock”) or lenders who the company owes money to.
In simple terms, a liquidation preference is like a VIP pass that ensures you get your money back first if a company has to shut down or gets acquired. It’s a way to protect the investment of people who put in money, often at the early stages when the company is most at risk.
Re-Trading:
This occurs when a buyer attempts to renegotiate the purchase price of a deal after initially agreeing to one. It is often seen unfavorably as it occurs after due diligence, seemingly exploiting newly discovered information.
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