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Movile’s Arthur O’Keefe: Top M&A Deal-Killers

June 1, 2017

Arthur O’Keefe, Partner, Movile talks about top M&A deal killers and how to avoid them during the LAVCA Venture Summit in September 2016 in New York, NY.

This content is made possible with support from Omidyar Network and Telefonica Open Future_.

Telefonica Omidyar

TRANSCRIPT

  • English
  • Spanish
  • Portuguese

Arthur O’Keefe: We’ve done over 25 M&A’s over the last three years. For sure, deals die for three reasons. The first is disagreement of founders, the second is disagreement on valuation, and the third is disagreement on governance. If you know that those are the ways that a deal dies, you attack them sequentially. So, you take people out and get to know them, you build the relationship, you bring them in, you start trying to help each other and say “I’m not going to charge you anything. We have this thesis that if we join forces we can do something better so let’s just try it. I’m going to eat the cost, we call that operational due diligence, and let’s see if I can actually make the needle move.” And so, you gain trust that way.

Then valuation. If you have trust, it’s a little bit easier to have the discussion about relative valuations. And then if you actually have a real platform you can show value creation and try to get over that. And then the third one is governance. And again, if you’ve built that trust you can say “Let’s keep things simple and think about what’s important to each party and try to come to an agreement.”

Arthur O’Keefe: Hemos hecho más de 25 fusiones y adquisiciones en los últimos tres años. Es un hecho que los acuerdos fracasan por tres razones. La primera es el desacuerdo entre los fundadores, la segunda es el desacuerdo en la valoración y la tercera es el desacuerdo sobre la gobernanza. Sabiendo que esas son las formas en que un acuerdo fracasa, debe atacarlas secuencialmente. Por lo que debe tratar de conocer bien a los fundadores, establecer una relación, hacer que se involucren, empezar a tratar de ayudarse mutuamente, para luego decir: “No voy a cobrarles nada. Creemos que si unimos fuerzas podemos lograr algo mejor, así que intentémoslo de esa manera. Voy a absorber el costo, a eso lo llamamos diligencia debida operacional, y veremos si realmente puedo hacer una diferencia”. Y así, uno se gana su confianza .

Luego sigue la valoración. Si tiene confianza, es un poco más fácil llevar a cabo la discusión sobre valoraciones relativas. Y luego, si efectivamente tiene una plataforma real, puede mostrar la creación de valor y tratar de superar eso.

Por último, la tercera parte es la gobernanza. Nuevamente, si ha construido esa confianza puede decir: “Vamos a mantener las cosas simples y pensar qué es importante para cada una de las partes e intentar llegar a un acuerdo”.

Arthur O’Keefe: Nós fechamos mais de 25 fusões e aquisições nos últimos três anos. Com certeza, negociações dão errado por três razões. A primeira é o desacordo entre os fundadores, a segunda é o desacordo sobre a avaliação, e a terceira é o desacordo sobre o governanza. Se você sabe que essas são as razões que impedem uma negociação, você as aborda sequencialmente. Então, você tenta conhecer bem as pessoas, constrói o relacionamento, cria intimidade, começa a tentar ajudar uns aos outros e diz: “Eu não vou cobrar nada. Temos esta tese de que se unirmos forças podemos fazer algo melhor, então vamos tentar. Eu vou arcar com o custo, chamamos de devida diligência operacional, e vamos ver se eu realmente consigo fazer a diferença.” E então, você ganha a confiança dessa maneira.

E em seguida, a avaliação. Se você tem confiança, é um pouco mais fácil discutir sobre avaliações relativas. E então, se você realmente tem uma plataforma real você pode mostrar a criação de valores e tentar superar isso.

E a terceira é o controle. Novamente, se você construiu uma confiança, você pode dizer “Vamos manter as coisas simples e pensar sobre o que é importante para cada um e tentar chegar a um acordo.”

Movile’s Arthur O’Keefe: Top M&A Deal-Killers was last modified: October 9th, 2017 by Editor
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MADE POSSIBLE WITH SUPPORT FROM

LAVCA’s gender diversity research is made possible with support from IDB LAB, Member of the IDB Group. Access information about WeXchange, a forum hosted by IDB LAB that connects high growth women entrepreneurs in LatAm with investors and mentors.

Methodology

This list includes 114 senior-level women investment professionals who are deploying capital in early and growth stage tech deals in Latin America, as well as notable women angels investing over USD50k across multiple deals in the region in the past two years. All investors were vetted for inclusion by LAVCA Research.

Every year since 2016, LAVCA solicits nominations of top women investors in tech from the investment community. The inaugural list included 37 investors; the 2017 list added eight new investors. In 2018, complementing the peer nomination process, LAVCA reviewed the investment teams of all active Latin American VC funds, producing a list of 82 senior-level and 47 mid- and junior-level investment professionals. In 2019, those numbers jumped to 88 and 87, respectively, and increased to 103 and 97 during 2020.

NOMINATE AN INVESTOR

This list is not exhaustive; if you know of a junior- or mid-level investment professional working on Latin American tech deals who should be on this list, contact [email protected].

TOP WOMEN INVESTING IN LATIN AMERICAN TECH

LAVCA’s companion list of Top Women Investors in Latin American Tech includes 114 senior-level women investment professionals who are deploying capital in early and growth stage tech deals.

About LAVCA

 

LAVCA is the Association for Private Capital Investment in Latin America, a not-for-profit membership organization dedicated to supporting the growth of private capital in Latin America and the Caribbean through research, education, networking and advocacy.

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