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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. 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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  1. Mergers and Acquisitions the road to Liquidity in the post internet age Michael McNamara Senior Vice President, Technology Verisity Design

  2. 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

  3. 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?

  4. Review: Criteria for IPO • Growth Market • Revenue • Profits • Experienced Management • Merger capable

  5. 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

  6. 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

  7. 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

  8. 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

  9. Not so Good • Growth + Idea • All risk, when revenues are needed • Growth + Growth • Internal fights • Anything + End of Life • Buying a name

  10. 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!

  11. 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

  12. Thank you for your time • Questions? mac@verisity.com

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