Chapter 92. M&A (2)

In fact, even 20 billion dollars is practically a bargain when considering its future value.

The problem is that we are short by a staggering 160 billion dollars from the money we currently have. We've only managed to earn 50 billion dollars (hardly) through all our efforts so far, and we need to earn another 160 billion dollars.

No matter how much I've regressed, this is still an unreasonable task.

But...

This is an opportunity to acquire the world's largest company.

In my previous life, I couldn't even imagine such a thing. But now, it's within reach if I just stretch out my hand.

I could probably list 100 reasons why it won't work. But if I had done that, I wouldn't be sitting here now.

Whether it will work or not is a problem to think about later.

What I need now is the courage to seize the opportunity right in front of me.

Having finished my thoughts, I opened my mouth.

"Alright. But there are a few conditions."

Alex looked at me with surprise, clearly not expecting me to accept. David also showed signs of shock.

"The deposit is 20 billion dollars. The remaining 180 billion dollars will be paid one year later. The condition is that you step down from management immediately after the contract is signed."

Once the contract is signed, if I can multiply the remaining 20 billion dollars by nine within a year, the problem will be solved.

"You don't seem to have the means to pay the full amount right away."

"Isn't the deposit usually 10 percent of the purchase price?"

Just like in real estate transactions where the contract date and the final payment date are different, in large-scale M&As, the contract is signed first, and the remaining payment is made later.

In reality, it's not uncommon for the deal to fall through due to a failure to secure funds during this process.

Of course, if you have the money, paying immediately is the best option.

"Wouldn't the terms be different if you're asking me to step down from management right away?"

"Eventually, you'll have to step down from management, it just takes time."

Because we already have 51.16 percent of the shares.

After a moment of thought, Alex spoke.

"The deposit is 50 billion dollars. And 75 billion dollars six months later, and 75 billion dollars one year later."

"50 billion dollars for the deposit?"

"Didn't you just say there are many places to invest in the market? You need to recover the invested money quickly to invest in other places, right?"

I sighed inwardly.

The deposit has increased, and the deadline has shortened. It's one thing to raise 75 billion dollars in six months, but I don't even have the 50 billion dollars for the deposit right now.

"I think this is a significant concession."

Alex has a point. From his perspective, he can't just sit around waiting for the remaining payment.

"Since you're making concessions, could you make a bit more?"

"How so?"

"The deposit is 40 billion dollars. 80 billion dollars six months later, and 160 billion dollars one year later. However, the condition is that you step down from management immediately, and we won't recognize any breach of contract on the seller's side."

"You don't even have 50 billion dollars, do you?"

I shrugged.

"It just takes time to raise the funds."

"What if you can't raise the funds by then?"

"Then, according to convention, we'll have to forfeit the deposit."

In the event of a breach of contract, the buyer usually forfeits the deposit, and the seller returns double the deposit received.

However, since this involves management rights, there are several conditions to prevent the contract from being breached.

Alex nodded.

"Alright."

David quickly interjected.

"Then we agree to these terms. I understand there will be no further changes or additions."

If we were to add more conditions here, the negotiations would fall through.

Alex did not object, and David revised the contract. Once the contract was finalized, the opposing lawyer reviewed it.

Alex signed first, followed by me and David. We each received a copy of the contract.

I sighed in relief.

Is this finally over?

"Thank you for the good deal."

I extended my hand again. This time, Alex took it.

He looked at me and spoke.

"Why specifically CoolCloud?"

In fact, it was quite a stretch. I acquired a company worth 100 billion dollars with just 50 billion dollars.

While it's true that I bought it cheap by exploiting its weaknesses, I now have a debt of 160 billion dollars.

Moreover, CoolCloud isn't a company that can immediately generate profits; it requires further investment.

If anything goes wrong, Continuum Capital will go bankrupt. I took this risk to acquire it.

Now that the contract is signed, there's no need to hide anything.

"Because it's a good company. I plan to grow it into the world's best company."

You probably can't imagine how much this company will grow. If you knew, you wouldn't have sold these shares no matter what.

"How did you find out about the Premus Fund's insolvency, the Thomas Motors fraud, and Rolf's lies?"

I answered as I had to Rolf.

"I was lucky."

Alex smiled faintly.

"Luck... Ah! One more thing. What do you plan to do with Rolf Butch?"

In a way, he is the one who suffered the most due to Rolf. Naturally, he wouldn't feel good about it.

"I don't know. The truth will come out eventually, won't it?"

* * *

The acquisition contract is signed, but everything isn't over yet.

In M&A, the acquisition is just the beginning. The real work starts now.

David received the company-related documents as agreed. Alex willingly handed over all the documents, files, and contracts.

Afterward, we gathered in the hotel room with Seed to discuss restructuring plans.

When you hear "restructuring," you might think of layoffs first, but it actually refers to a comprehensive reform of the entire management.

Of course, people will be laid off in the process.

There are two ways to invest in a company.

One is to invest money without interfering in management, and the other is to actively intervene in management and personnel to change the corporate culture.

The former is just a change in shareholders and doesn't matter much, but the latter is different.

While some companies improve through this process, others can be ruined.

Generally, when venture capitalists (VCs) invest in startups, they provide advice and support on management but don't directly interfere.

Startups have their unique corporate cultures, and meddling with them can damage their competitiveness or cause key talent to leave.

Therefore, we have taken the former approach with the companies we've invested in so far, but this time it's different.

It was an M&A, not a share investment, and it was done in a hostile manner.

Since we're replacing the CEO, we need to reorganize the personnel and the organization.

The three most important positions in a company are CEO (Chief Executive Officer), COO (Chief Operating Officer), and CFO (Chief Financial Officer).

In CoolCloud's case, Alex Preston was the co-CEO and CFO, while Rolf Butch was the co-CEO and COO.

Rolf Butch was essentially just a figurehead, and Seed had been handling everything, so his departure won't be a problem.

The developers all trust and follow Seed, so there won't be any resistance.

The issue is with the sales and finance teams.

These teams are tightly controlled by Alex Preston and his people. We can't continue with them.

Fortunately, I have a rough idea of who should stay and who should go.

Because CoolCloud will become the world's largest company in the future, and I know a lot about this company. Additionally, Silicon Valley has a relatively free labor market.

We've settled the personnel issues, and the next step is to restructure the business.

Continuing with the existing business isn't a problem. However, Seed had a different idea.

"We need to go our own way without worrying about the Big Three."

Alex focused on stable management.

Therefore, from the early days of the company, he formed alliances with the Big Three and cooperated with them, avoiding encroaching on their territories.

AMZ's ZWS, NS's Azure, and Gubl's BigStorage are in a competitive relationship, so they don't share data stored in each other's clouds.

However, CoolCloud obtained the right to access data by forming alliances with them.

For example, if Company A and Company B collaborate, and Company A uses ZWS while Company B uses Azure, CoolCloud can access and analyze the data from both clouds in real-time with their consent.

This was CoolCloud's greatest strength. However, Seed's suggestion is to abandon this strength and go independent.

"That way, we can save some money."

Currently, the largest expense for CoolCloud is the money paid to the Big Three.

David raised concerns.

"Wouldn't that put us in an adversarial relationship with the Big Three? There's a risk of losing customers."

That's a common concern.

But this is because they don't know Mimir's capabilities and Seed's skills. I, however, do.

Seed confidently said,

"We just need to move all the data to CoolCloud's servers."

Using a specific company's cloud means more than just storing information there.

It means using all the programs provided by that company.

Due to this lock-in effect, changing the cloud service you use is not an easy task.

"Mimir's algorithms are unmatched. Besides, there are many services we've developed but haven't launched because we were wary of the Big Three. Once we launch them, customers will have no choice but to use CoolCloud."

I supported Seed.

"There might be some customer attrition, but it won't be significant. However, the Big Three's scrutiny will increase in the future."

"Anyway, their services are garbage."

Seed is probably the only one who can say that about the Big Three cloud companies. Of course, he has the qualifications to do so.

"From now on, it's your company. Do as you wish. Once the restructuring is complete, I won't interfere with management."

"Hehe."

David looked a bit skeptical, but I wasn't worried at all.

CoolCloud really started to grow after Alex and Rolf stepped down and Seed became CEO.

Some people excel at following orders, while others perform best when doing what they want. A predator's true value is only revealed when its leash is removed.

I handed Seed a document.

"Ah! Sign here."

"What is it?"

"It's a stock transfer agreement. I'll transfer 10 percent of CoolCloud's shares to you."

This isn't a stock option but an immediate stock transfer. This will increase Seed's share from 20 percent to 30 percent.

Seed looked at me with wide eyes.

"Can you just give away the company's shares like that?"

"It's my stock to give."

"I guess so."

Seed signed the document I handed him.

10 percent is worth about 10 billion dollars at the current value, but thinking of it as an investment for the future, it's not a loss at all.