By Robert Heaton & Toby Tester
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The podcast currently has 89 episodes available.
In recent weeks Rob and Toby have veered slightly off the M&A topic to explore the emerging world of AI and how it might shake up M&A as we know it. In doing that we've arrived at the challenges of adopting adequate regulatory and ethical controls for AI and never mind the slow cumbersome legal system and how that might cope with AI.
The key point is that AI needs global standards for regulation, ethics and legal controls and anyone with a degree of experience knows how difficult that might be to achieve. In Australia, it's almost impossible getting individual states to agree on a standard never mind a global scale.
Rob's view is that ethical and regulatory controls can be embedded into any AI programs at source and that if the big players (Microsoft, IBM, Amazon, Cisco, Oracle, SAP can be encouraged to do this, we might at least cover 80% of the challenge.
What are your thoughts?
Robert and Toby have been clamping at the bit to start talking about the need for strong ethics, regulatory and legal instruments to manage and control the global adoption of AI.
There's no doubt about it. AI has the equal potential to cause untold harm, and the scandal playing out with the UK Post Office is a stark reminder of how ethics can be completely railroaded. That is why it must be developed ethically. And that's what we're going to go into the next podcast. But today, we've been talking about the Post Office scandal because it offers a vivid example of when ethics and ethical principles play no part.
And I think the lesson we need to learn from this is that we must protect people themselves from the very real harm. that could be caused by AI. To do this, we need to build the ethical foundations and the framework around the technology for the common good of individuals, societies, and indeed all of humanity. Furthermore, those ethical controls must be universal.
And that raises the question posed by Robert. Should an ethical framework be built into all AI platforms so that the user is offered no choice? This and other questions at large will be the topic of our next podcast.
This week, the Dynamic Duo of Robert and Toby ponder on whether AI will drive a new wave of AI-influenced M&A transactions - or not. Certainly, 2023 has seen a 40% downturn in M&A volume globally so what evidence is there that AI will offer a stimulus and create a new wave of transactions?
It's not a simple question to answer because AI is still in its infancy, but adoption is accelerating at an alarming pace whilst regulation and legal controls are somewhat lagging and undeveloped.
The duo give this topic a good thrashing and generally come out in agreement with each other that AI WILL drive a new M&A wave. That said, Toby is of the opinion that it might be five years away because regulatory and legal reforms have not been developed. On the other hand, Robert believes that scrupulous organisations might force legal and regulatory controls to be adopted much quicker and the expected wave might be only one or two years away.
Time will tell.
Robert and Toby continue to delve into the topic of AI and in this episode, we start to examine how AI is or will impact each of the typical M&A processes. As the duo walk through the process from Deal Sourcing to Due Diligence and then into Legal Contracts and Valuation it becomes clear that AI is already playing a strong role in some aspects of M&A. But equally, there are other areas where AI might play a supporting role, where the need for human intervention is still prominent in what Toby refers to as 'the art of M&A'
There's also our long-standing view that the current 'narrow' AI is simply another tool that can be harnessed to significantly advance the quality and efficiency of M&A transactions BUT like all tools, it is the quality of input that determines the quality of output. GIGO (Garbage In = Garbage Out.
We've still got more to unpack on the topic of AI in Mergers and Acquisitions, and we hope our thoughts and viewpoints stimulate your own thought processes.
What do you think? Are you in agreement with Robert and Toby, or do you have a different viewpoint? We'd love to hear what others have to say.
In the last episode, the dynamic duo (Rob and Toby) started to talk about the emergence of AI, and this week, we continued the conversation to try and put some definition to AI. And we also tried (but failed) to stay grounded and not get dragged into the stratosphere around AI.
Anyway, this week's podcast was more serious than others as we sub-categorised AI into Machine Learning, Deep Learning, Narrow AI, General AI and Super AI; and that's probably just touching the surface.
We also tried to understand our personal position (as intelligent laypersons) on whether we were optimistic about AI's potential or deeply concerned about some of the dangers that AI might pose. And that ranged from the benefit to humanity as a whole (imagine AI bringing education to everyone irrespective of race, or social standing) right through to AI being harnessed for personal gain by the super-wealthy and politically powerful. And there's the easy leap from trying to define AI into a stratosphere discussion in the space of a few minutes.
The good news is we recognized our distraction and solemnly promised that we would return to AI basics and discuss its use and potential use in M&A transactions. That's next week's topic so tune in to find out if we managed to contain ourselves.
Robert and Toby often get together like old men on a park bench, to discuss a variety of topics. Some of them become podcasts, others don't. And sometimes one topic sparks a discussion on something different. That was the case recently when the dynamic duo was trying to get their heads around AI and what impact it is/will have on the world of M&A.
It was from that discussion we asked ourselves what tools are currently used to manage M&A transactions and we concluded that the technology is not much more than a spreadsheet on steroids with a simple data room and a database bolted on. Yes, I know we're being harsh, but what really came out of the conversation was the idea that the gap between current technology tools and AI is massive and we ended up with a view that AI will have such a dramatic impact that it's easy to equate it to that period where parts of China went from Abacus to Advanced robotics.
But that's jumping ahead of ourselves. We will start to discuss AI next week and we'd welcome anyone to join us who is keen to offer their thoughts and experiences. But in the meantime, we thought it was worth drawing the baseline and explore what tools are currently available and whether they are adding value to M&A transactions.
There is one certainty in life and that is if you choose any metaphor, Toby Tester can link it to M&A, and he doesn't even blink.
In today's podcast, Toby manages to draw a distinction between the behavioral characteristics of pirates of old and those of several modern-day corporate heavyweights such as Rupert Murdoch, Elon Musk, and Lord Hansen. Toby's view is that just like pirates of old, modern-day pirates possess a number of valuable behavioral traits i.e
Moreover, during their conversation, Robert and Toby conclude with several recommendations that the modern pirate (CEO) should add to their M&A toolkit.
And Remember: there’s buried treasure in every M&A deal.
To start with a tongue in cheek disclaimer: If we've offended any Corporate Lawyers or Investment Bankers in the recording of this podcast, we did so with gusto and enjoyed having a dig at your expense :-) But enough of that. When and where did the term M&A originate?
We use the term M&A freely as part of everyday language, but when and where did it all start. Our dastardly duo jump into their time machine and head back to 1602 when the Dutch India Company was formed and became the first truly recognised 'corporate entity'. Fast forward 100 years and the Dutch India Company merged with one of its competitors to stave off a downturn in business.
By the 1800's the world of corporate finance was in full swing and London was the recognised finance centre of the world. And that was the catalyst for companies to trade in shares, raise various forms of finance and start the process of buying and selling businesses. The process we know today as Mergers and Acquisitions.
And since then the world of M&A has literally exploded through what Robert and Toby describe as 7 distinct development stages. And today you won't be surprised to learn that since 2000, more than 790,000 transactions have been announced worldwide with a known value of over 57 trillion USD.
Listen to today's podcast and see if you agree with our 7 phases of M&A.
Just when you thought it was safe. Just when enough time had elapsed that you thought the future was safe and secure - - - THEY'RE BACK!
Yes, after a hiatus of 12 months, the deadly duo of Robert Heaton and Toby Tester have returned to their popular podcast with even more M&A Stories.
Today's episode is just an introduction to give you a flavour of what we will talk about. As always, our intention is to share our experiences, provoke thought and conversation and help other practitioners who are about to embark on an M & A transaction.
It's the first podcast for 2023 from your hosts Rob and Toby and in this episode, Toby focuses on the top 5 post-close questions a CEO needs to ask on any deal. But before we start let's put the CEO's task into perspective. He's just spent the best part of last year focused on the deal, the constant back-and-forth conversations, the massive efforts around due diligence, the stress of negotiating the final deal value, and then the task of ensuring that all the legalities are properly managed and signed of etc etc.
There is, of course, the short-term elation when the deal is finally closed and ink is dry but it's short-lived, because before he can draw breath, that CEO is now faced with achieving the strategic vision, value, and synergies that were part of the deal thesis and a promise to the board and shareholders alike. Here's to another year of stresses that are stopping him from doing his day job.
Well as Toby puts it, there is some relief that can be gained if the CEO approaches the post deal activities by asking 5 simple questions.
From Rob's point of view, these questions might come over as too simple, but in reality, they are the foundational questions that any CEO must be comfortable with if he/she is going to deliver the post-deal promise to the board and shareholders alike.
And the final point in all this is that the CEO must not wait until the deal is closed before he tackles these questions. He should be thinking about these as soon as due diligence is underway. In fact the earlier one can consider these 5 important questions, the better.
The podcast currently has 89 episodes available.
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