"When I took this programme I was working for a company called Johnson Controls which offers the installation of equipment, maintenance and monitoring for fire prevention, fire detection and security. It sells this to all sorts of organisations from hotels to schools to airports.
The company started a strategy of buying smaller businesses in areas where they didn’t have a footprint.
I’d been working for the company as a commercial lawyer but then became corporate counsel and suddenly had to handle M&A deals. This hadn’t been part of my commercial law training so I sought out the LBS programme to gain a better understanding of what was a new area for me.
The programme was heavily financial. It provided a valuable insight into understanding how deals are negotiated financially, what emphasis is placed on elements of the accounts and books of a company, and the strategic perspective.
The bulk of the work of an M&A deal is in valuation. For my part, the lawyers come in to ensure that certain representations that were made by the seller during the valuation process are correct and true by reviewing the documents provided – which is the legal due diligence part of it compared with the financial due diligence.
For those who are involved in the valuation of the business, I think the LBS programme would help them identify any holes in the numbers that are presented to them and then enable them to make a decision about whether the deal is viable, knowing the industry, knowing the market, knowing the trading accounts of the business. For example, I experienced an M&A deal where a company was valued at £1.2m in terms of the contracts on its books but after financial due diligence it was agreed that it was only worth £700,000.
A lot of lawyers are scared of numbers – and in the past that included myself – but I certainly feel more confident about them now. I can better understand the valuation models used in arriving at the decision that this is a viable acquisition, and not just leave it to the M&A lead.
Also, as a lawyer, one part of the programme that rang true for me was that I realised I needed to have oversight of post-acquisition transition – and make sure it was being actively managed. In the business I was in you can imagine that if one of the clients relying on security services found they didn’t have adequate cover during the contract handover period of two days to a week, it could cause major problems.
The programme was very lively – although there was a lot of information to take in – and the faculty members were fantastic. We would break out into smaller groups of eight and deal with case studies, which was really helpful as you got to interact with people from different backgrounds. I do remember saying to the one other lawyer on the course that if we didn’t have the finance people in our group we wouldn’t have been able to answer some of the questions! But we all came together with our knowledge and skills and gained a better understanding of the issues. There was a big presentation at the end of the week and I presented on the post-integration aspects of the deal, while others punched holes in whether it was a good deal financially for each side.
I handled around seven deals while I was with Johnson Controls before leaving in June 2018. I’m not able to work on M&As with my current company as it has a centralised M&A function but I would definitely like to work on them in the future. They can be hair-raising but also exciting."