It may be a child’s play to start a business organization but, it requires a panache, élan, a verve, and tons of skills to raise a successful one. It isn’t uncommon to witness a business persevering for manifold years before achieving a billion dollar valuation, organic or acquired. But, it’s definitely rarest of the rare to witness a two years old business turning down a $10 billion acquisition offer, especially if you’re a management consulting company. This is exactly what WE did in last 24 hours. Hence, in first hand, we decided to share with you all why we did so before any speculation starts making round on the social media.
It’s no longer surprising when one fine morning you’re approached by a social media giant for a probable takeover opportunity. We live in an age crazy valuations surrounded by sky rocketing M&A environment. But, it’s definitely surprising when you are just a 2 years old company with 2 co-founders, 2 office locations, 2 many virtual staffs, and 2 laptops and 1 website as asset. In a nutshell, $10 billion wasn’t the business’ valuation but valuation for the two co-founders. The numero uno question that came, based on the prima-facie offer, to our mind was “Are we intellectually worth just $5 billion each”.
We lived 24 years in last 24 hours. It was one of those time that test individuals’ character. A time where any amount of acquired education or practical experience looks nascent. A time to deep dive and reflect your vision. A time to envision your ultimate goal. Somehow, after hours of living and dying thoughts, we explored that money isn’t the only motivating factor for us to be in the business. At least, not just $10 billion. We realized it soon that we are headed towards building a business organization having capability to reach much more than the offered amount. We realized that our happiness lies in achieving that 10X milestone than surrendering now, something that makes us a strategy and planning team.
To put in a nutshell, the deal that was offered and got shot down by us was as follow:
- $10 billion valuation with $8 billion in cash and $2 billion in equity
- Board representation on acquirer’s company
- Full time consultants to the acquirer company around our capability area, a monthly paid position
- Limitation on number of clients that we can work for post-acquisition. Limited to 3, including acquirer
- Can’t serve client in related industry i.e. social media
Undoubtedly, it was an offer worth salivating for. But, as a consulting organization you strive to serve as many clients as possible, creating success stories, and helping people achieve their vision. The offer of being limited to 3 clients was the next thing that didn’t went fine with us. The sheer amount of capital failed to replace our karmic quotient.
To speak the truth, even our karmic values were about to get compromised and acquisition might have happened had it not been the April fool’s day. We wish your workday would be as interesting as our yet-to-be multi-billion dollar company’s April fool’s Day prank.
Let the word spread before the speculative spread of news on the social media. We do honor your time and hence, as a token of appreciation we are providing you with the 2013 M&A report.
You can download the complete research report at The Global Consulting Merger & Acquisition.