The art of the deal: Decisiveness can be better than capital
After 30 years as an investment banker, Mervyn Metcalf knows that capital isn’t always the most important part of a deal. He tells us more in today’s Notebook
Importance of momentum
I have been an investment banker for over 30 years, during which time I have originated, executed and worked on hundreds of deals across almost all sectors in the UK.
We recently acted for one of the world’s leading safety and compliance businesses, PTSG, on the recent acquisition of IDSL. The auction was highly competitive and our client was by no means the preordained winner.
The ultimate success the PTSG team brought to the table was not simply capital but a desire to win and accompanying this was demonstrable momentum. PTSG acted with pace and determination to win. The owners of the asset appreciated the speed of delivery and decisiveness.
Momentum is so critical to any transactional success.
In the case of public to private transactions, the chair of a board is as much focused on the distraction to the company of an approach as the price. Demonstrating to the Chair and non executives that an approach is well thought through, that all public information has been reviewed and that the next stage can be done quickly and efficiently is a critical component to allowing a potential bidder to have access. It is essential the bidder is viewed as serious and will not waste the executives’ time and any work will be done with pace and vision.
Similarly, time is the enemy of any proprietary transaction idea. Capital is a commodity but leaning into an idea and making it a reality is an important part of success, not least as another party might ultimately notice the same opportunity.
In the current environment with low growth, ever changing political environments and global uncertainty, momentum is a tough ask. Waiting a few months might bring more certainty and the opportunity most likely will remain. However, looking beyond the short term and identifying the medium term opportunity might be the differentiator in value creation. Bringing momentum to that vision is a key factor to success. I am confident PTSG will achieve exactly that with their recent acquisition of IDSL.
A Snack in the Tree
As a child you only ever see your mother from one perspective – mum! You never really think she had a life before you!
My mother, Ann Metcalf, recently published her life story, A Snack in the Tree.
My mum writes about her early life in hospital where she was bed bound for five years as a child, to meeting my father and living in South Africa, Zimbabwe (then Rhodesia) and Ghana for two decades. The book concludes with the turbulent political events surrounding the death of my father in 1980.
The true story reveals both the beauty and devastation of her life in Africa, intertwining tales of travel, personal growth and newfound strength. Throughout it demonstrates my mother’s tenacity and drive.
Best described by one reader as “such a beautiful, heartbreaking and inspiring life story” and another “an extraordinary memoir of a fascinating life”.
To me, she’s still mum, but with an incredible story to tell.
Quote of the week
“Grief is the price we pay for love”
HM Queen Elizabeth II, 20 September 2001
A local’s guide to Soho
Dean Street, my firm’s namesake, is also home to some of Soho’s best family owned restaurants and clubs including Prix Fixe (French bistro), 40 Dean St (Italian), Grasso (Italian-American) and Gerry’s Club (the last of the great old Bohemian Clubs). Well worth a visit too is Gopal’s of Soho, on Bateman Street (one of London’s best traditional Indian restaurants).
Mervyn Metcalf is the founder of Dean Street Advisers and chair of The Holburne Museum