Posts By: Joel Lessem
Joel Lessem, CEO and Co-Founder
As Chief Executive Officer, Joel Lessem is responsible for leading Firmex’s strategy and growth. Joel has over 18 years’ experience in successfully accelerating revenues of growth businesses. Under his leadership, Firmex is rapidly becoming a standard for sharing large volumes of highly confidential and sensitive documents for corporate transactions, litigation and compliance.
Prior to leading Firmex, Joel drove the US growth of PointForce Inc., leading to the company’s acquisition in 2004. In 1999, Joel co-founded Crescent Logic, a software company that provided online equity research publishing tools for investment banks.
A few weeks ago our VP of Engineering asked me, “What unites all of us at Firmex?”
All too often you see corporations craft syrupy and bland mission statements about their vision and values, print them on posters and slap them up around the office. While these statements are important in providing a holistic direction for the company, they don’t relate to the day to day reality of working life.
So, this got me thinking about what does make our employees want to come to work every day?
I surveyed a bunch of employees from different departments in our office and asked them, “What makes your job interesting or gratifying?” The response was a mix of both universal and divergent themes.
I recently attended a 3 day M&A workshop in San Francisco hosted by the M&A Leadership Council. Also in attendance were the M&A post-merger integration professionals from thirty or so other companies, most of them serial acquirers, such as Intel, Symantec, McAffee, EMC, Halliburton and Best Buy.
One central theme that emerged during this workshop was the common disconnect between the M&A deal team, who conduct the due diligence, and the M&A integration team, who try and make the investment meet the assumptions that led to the deal in the first place.
Firmex provides virtual data rooms primarily for performing due diligence during the M&A process. Aggregate data of weekly usage from over 5000 data rooms reflects overall M&A market sentiment.
Both the number of licensed clients and unique users logging into data room both increased approximately 35% in 2011 which is largely reflective of Firmex company growth versus the M&A market. However the US budget impasse, emerging Euro Crisis and stock market declines in Q3 impacted the number of deal participants, something we did not see in 2010. There is a strong correlation to the DOW index over the same period.
Today we enjoyed an in-depth outlook of the M&A Market in 2012 with Dennis Roberts, author, Chairman and CEO at The McLean Group. His insights into how cross-border deals, technology, healthcare and an aging baby boomer population are affecting the M&A landscape, were invaluable.
Dennis spoke to the impact of new technologies on business, citing that 40% of S&P 500 companies were not there 10 years ago. He also discussed how an aging baby boomer population has accelerated growth in healthcare, pharma and biotech. He also referenced specific data related to the last year, revealing that in 2011, one in three M&A transactions in the U.S. were cross border deals.
Today we enjoyed our fourth collaborative Master Class with Andrew J. Sherman, author and Partner at Jones Day. He led us through his best practices to ensure success in post-close integration with a Buy-Side perspective of M&A.
Andrew spoke to the challenges in post-close integration. Citing at KPMG survey, Sherman agreed that cultural and people issues present the biggest challenge during the post deal period. He also referenced specific data points related to post-deal integration, citing a Deloitte survey Sherman highlighted that although the desired outcome of integration may be to rapidly capture cost & revenue, synergies were not achieved in 70% of cases.
The news wasn't all bad though, Andrew provided tips, tricks and checklists for retaining key employees, overcoming cultural issues, establishing a transition team and more.
Today, we once again enjoyed our third collaborative Master Class with Andrew J. Sherman, author and Partner at Jones Day. He led us through his due diligence best practices and pitfalls with a Buy-Side perspective of M&A.
Andrew likened the due diligence process in M&A to dating, "Some people like to disclose everything on a first date, most of us reveal information about ourselves on a phased basis as we get to know the other party. The due diligence process in M&A is more akin to that, as long as you're not witholding information that would change the nature of the transaction." Transparency and openness are keys to conducting successful due diligence. Sherman added that, "Those who are successful in due diligence leave their ego at the door."
Today, we once again enjoyed an enthusiastic and collaborative session with Andrew J. Sherman, author and Partner at Jones Day. He took us through the Buy-Side perspective of M&A and focused on how to qualify your seller and uncover hidden value.
Building on his weather forecast in Part 1 of the series, Andrew alluded to the clouds parting for M&A in 2012. Using a bullhorn he gave the call to action to Buyers, “Attention K-mart shoppers – deals to be had!” Companies are sitting on $2.5 trillion and this value will be flowing back into the markets. Buyers need to be prepared to capitalize on the buyer’s market that currently exists but not to rush into acquisitions. Vigilant due diligence is crucial.
Over the course of the last year, Firmex has made major investments in our product group. From deep talent hires to doubling our head count in development, to investing in SOC 2 audits and partnering with a content acceleration provider – we are serious about ensuring our customers enjoy a consistently high experience when it comes to working with Firmex.
I have spoken to many entrepreneurs and intermediaries. Some of my peers in my CEO circle who are approached by a potential acquirer, are at times more focused on “what’s in it for me” versus their buyer’s mindset.
Bottom line is first you need to qualify your buyer. Once you’re satisfied you need to make sure you’re easy to deal with. This should not be a tug of war. It’s a courtship ending in a marriage!
Recently I participated in the M&A Master Class webinar alongside Andrew J. Sherman, author and Partner at Jones Day. What an incredible opportunity to listen to a leading authority on M&A, up close and personal. This session took listeners through not only his views on the current state of the market but also key steps to prepare for selling a company. The slides to his presentation are posted on the Firmex website, but I thought I would re-iterate his views on the current state of the market, which he took us through in our conversation.