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M&A

Guy Cicero —  06/13/2018 — Leave a comment

My first grown-up job out of the Army was to work as a researcher for a mergers & acquisitions (M&A) consulting firm based in McLean (home to the CIA), Virginia. Our clients were large New York and American Stock Exchange, publicly-listed companies bent on growing their earnings bases by acquiring other companies. My job was to identify every business, usually in the USA, that fit the ideal prospect profile—usually $10-20 million in sales with strong profitability and growth prospects—call their presidents, and ask them all sorts of nosey questions about their financials on behalf of a client I couldn’t name. After a while, I actually got good at this. My work product was a “one-page report” that usually went to 4-6 pages and provided basic info that our “closer” could take to the client and try to arrange a “first meeting.” Our compensation consisted almost entirely of closing bonuses we recevied when a deal we started actually happened. My pay consisted of a monthly check for about $350 plus these bonuses. In four-and-a-half years I got two, totally about $15,000. I was rich.

NOTE: $10-20 million in sales equates to maybe ten times that now. My tools were a telephone, a yellow pad and pen, and the Dunn & Bradstreet directories, and I spent abot 40 hours a week dialing for dollars. I would turn over my draft reports to a typist, and off we went toward a first meeting.

These days, I take special interest in news about anticipated and actual mergers and acquisition such as the merger of AT&T and Time Warner. These cause me no particular concern, in contrast to many commentators who seem to see it as their mission to right the wrongs of business concentration and the formation of behemoth companies bent on taking over their markets. Wouldn’t any business owner do just the same given the chance?

51V4VhwLlBL._SL500_AA300_PIaudible,BottomRight,13,73_AA300_I saw The Monuments Men movie recently and thought it lived up to the promotional interviews on Letterman and elsewhere with its various stars.

Several years ago, a rich Texan named Robert Edsel got interested and then got really interested in the story of the actual “Monuments Men” from World War II. His research and persistent efforts and cash resulted in a book, a PBS documentary, and now the movie and all the attendant publicity for a story we’d never heard before about Americans at war.

If there ever was a great example of why individual freedom must be the ultimate political and social goal for civilization, this is it on a couple of levels. First is the story of the original monuments men, and second is the story of how one person brought their heroics back to life. We should all be inspired and moved to action to help preserve personal freedom wherever we find it under attack.

I’m a lifelong fan of free enterprise. People should have all the freedom they need to try, fail and succeed at their own businesses. If they break the laws of God or man in doing so, they ought be regulated, prosecuted, and otherwise called to account. But they ought to have the chance.

When people are extremely successful in business, they tend to accumulate lots of cash, especially when they sell off their companies. It’s what they do with all that cash that’s the important thing. Bill Gates, Warren Buffet, and Larry Ellison…these are the well-known stories.

Robert Edsel sold his oil business and moved to Italy, where his passion for the Monuments Men story began. You can read about it at MonumentsMen.com. (This isn’t Sony’s site about the movie.) Good for him, and us.