M&A Part IV – Timing

When I worked at Morgan Stanley in the mid 90’s we used to have a joke about the relationship between VP hours and analyst hours. The ratio of these hours was in the neighborhood of 7 to 1, so when your VP asked you to do an analysis or create something for a pitch book and said something like “ok – I know its 10pm, but this should only take you about an hour” you knew that you’d working until about 5am, give or take. I’ve found this relationship to be true of many lawyers as well (as in “I’ll get you this document in a few hours,” which typically translates to “I’ll get you this document at 11:59pm tonight”). I have the same problem on sell side M&A deals, which is to say that I’m always forgetting that they take longer than I expect them to. Mostly I forget that while I can control my side of a deal (at least to some extent), I can’t control the other side of a deal. Particularly when I’m working on selling a business, I tend to be more motivated to move quickly than the buyer (who obviously wants to do careful due diligence, may have other deals they are working on, etc.). While one still needs to push so a deal doesn’t drag on forever, I’d probably stress myself out if I remembered that deals always take longer than when I map them out in my head (ALWAYS) and that each deal has a different flow (most of which have some variation of a sine curve in terms of activity level, but each of which has both a different amplitude and frequency) and that sometimes one needs to just go with the flow rather than swim up stream.

I’ll put up a post in the next few weeks about things that you actually can do to keep a deal moving (starting with understanding what things you control and what things you don’t and spending your time working on the former rather than pounding your head against the wall on the latter), but I’m living through it right now and don’t have the stomach for much more on this topic at the moment. . .

See the other posts in my M&A series here.