Working with Acquirers

Bill Grabe is an Advisory Director at General Atlantic. Bill joined General Atlantic in 1992 and retired as a Managing Director in 2010. He has been an integral part of GA’s global expansion, initially in Europe and later in India and China. Prior to his affiliation with General Atlantic, Mr. Grabe retired from the IBM Corporation as an IBM Vice President and Corporate Officer. In his last position he was responsible for US Marketing and Services and was a founding member of the board of ISSC, the precursor to IBM Global Services.  Bill currently serves on the boards of Quality Technology Services, Lenovo Group Limited, Gartner, Inc., and Covisint Corporation.

Summary Notes on Working with Acquirers

• Are companies bought or sold?
  • Wrong question – the focus should be on building a great company, not M&A
  • You have to make sure what you’re doing is building value for yourself and shareholders
    • Build a company that people want to be a part of
  • When a company decides it wants to sell, the sale has to be for a specific reason
    • Perhaps you’re pessimistic about the company being able to grow on its own
  • Focusing on building a great company will provide optionality for M&A
• What should entrepreneurs be doing when dealing with potential acquirers?
  • Focus on building a great company first
  • Every good company is tracking its competition all the time
    • A company will often reach out proactively and indicate its interest in buying if there’s a strategic fit
  • Strategic imperatives can often be misguided
    • Acquirer would often like to get into a fast growing stream but this does not always work out
  • Evaluate offers on case by case basis
    • Questions to ask:
      • Can a deal close?
      • Is there funding?
      • Is there a strategic fit?