Adrie's Blog

Spyker buys Saab

When I read the above headline in the news this morning, I had an instant flashback to a similar David vs. Goliath deal I almost did once...

Let me say first of all that I love this kind of daring entrepreneurship - taking on the big guys, and actually getting it DONE. I applaud that kind of spirit.

About 20 years ago, when I had a mid-sized automation company, I read an article in a business magazine which mentioned that a retail conglomerate was considering selling off a chain of sports stores. This caught my eye primarily because I have had a lifelong passion for sports and because of the size of the business, about 100 stores, was interesting. After speaking with a good contact of mine in the banking arena, we involved a third person who already owned a large shoe store chain. I then called the Chairman of the retail conglomerate in question and expressed our interest in the sports chain. He kindly invited us for a meeting.

The whole corporate environment was totally new to me - new, plush high-pile carpet, intense silence in the corridors, closed doors and people that looked like someone had ordered them never to move or blink.
The meeting started with a question from the Chairman "So - this chain will have to raise $ xxxx. Are you able to deliver that?". I don't think I even blushed when I said "yes, of course". To make a long story short, in the end we were able to negotiate the price down to about 10% of the original cost, by which time we had spent a zillion $$ on fees for Due Diligence, Accountants, Legal and Tax advisors and had almost closed on the loan we would need in order to close the deal..all ready to go!

That was the moment that the third party we had brought in, went behind our backs and thought he could do it all himself. That turned out to be a miscalculation but by the time he figured that out, the deal was ruined. The morale of this story is that you have to watch out who you deal with - many people/advisors are greedy and let you do all the work. Before you go into business with anyone, check into the background of the individuals, find out if there are any court cases/law suits running against them and check references from the companies they have worked with in the past...and preferably not the ones that the company offers up as a reference which will always turn out fine, but specifically check the experiences of those that they DON"T offer up as a reference for an honest opinion.

A partnership can be extremely valuable and durable - provided everyone has the same agenda and is willing to share its success.