Smart Business Magazine, March 2018

22 Smart Business Pittsburgh March 2018 comfortable that their baby or their familys legacy will be well taken care of after the closing he says Pete DeComo chairman and CEO of ALung Technologies Inc has experience raising capital and developing startups He realizes deals must be mutually beneficial otherwise a one sided deal has the potential to eventually implode The entrepreneur is also willing to walk away understands his fixed variable and hidden costs and defines and agrees on the selling price and margin targets before going to the negotiating table DeComo knows the bottom limit beyond which he will not go when negotiating ALIGN AND INTEGRATE Even when a relationship is developed and the deal makes sense cultures that dont align still cause transactions to fall through If these problems arise after a deal closes they can slow or stop integration efforts Merging is easy but successful integration is challenging particularly if multiple cultures are involved says Francis A Muracca II partner at Jones Day You have to develop a solid integration plan that incorporates the views of the key people you wish to retain to ensure a smooth transition he says Lewis says both parties need to evaluate pay structures benefits seniority classifications and all other aspects that will affect the employees being integrated to identify potential misalignment And dont expect to suddenly become a combined business that can operate cohesively Even the most amicable deal partners take time to mesh FRANCIS A MURACCA II A S P I R E 2 0 1 8 C O N F E R E N C E P A N E L S P E A K E R S STEPHEN J GURGOVITS JR Tecum Capital HOWARD W HODDY HANNA III Hanna Holdings Inc Howard Hanna Real Estate Services MATT HARNETT Tecum Capital JOHN HAYNES iNetworks Opportunity Fund CHRISTOPHER HEPLER Wabtec Corp KRISTY KNICHEL Knichel Logistics INVESTORS DEALMAKERS ENTREPRENEURS AspirePIT What is the biggest mistake you ever made when making a merger or acquisition and what did you learn from it Letting the team outsource commercial due diligence to an ill prepared consulting group Its OK to have extra arms and legs to do the analysis and support the team but the owner of the business going forward needs to drive the analysis DAN MILICH PRESIDENT AND CEO SHRUGGED ENTERPRISES LLC In my early stage life sciences world deals are usually structured with milestone earnouts Depending on the stage of the company the earn outs can range from 20 percent to 80 percent of the total transaction value Be sure that your earn outs are well thought out and achievable If they are not you may be shortchanging yourself and your shareholders PETE DECOMO CHAIRMAN AND CEO ALUNG TECHNOLOGIES INC Too much was assumed and not enough verified I learned that trust and verify is an essential part of the process BOB PETRINI PRESIDENT CHICK MACHINE CO LLC