​Bruce Milne

Thanks, Jim.

Now finally to Austin, Texas and Allan Wilson.

Allan Wilson

“In business as in life you don’t get what you deserve, you get what you negotiate” This is never more true than in software M&A. So what is the key element that must be in play to get the best deal? The answer is FEAR. Fear in the mind of the buyer that if they don’t get your company someone else will take it away from them. With only one buyer in the mix there is no fear. They are in control, calling the shots, getting it all their own way. They see you as having no option.

One buyer is no buyer, without healthy competition in a managed auction process the optimal outcome for you and your shareholders will never be achieved.

Bruce Milne

Thank you, Allan. Sage stuff. One buyer is no buyer.

Q&A

I think your comment about you get what you negotiate prompted our first question. We have many questions and only a couple of minutes to address them.

That first question is, “Do you expect the Trump Rally to continue, and what will be its effect on M&A?” We can do a whole conference on this. Yes, we expect it to continue. The reason is that the new administration is proposing a 10% holiday on taxes from abroad. Some of you may have heard this already, but when the Obama administration came in eight years ago, they eliminated the 15% dividend tax on foreign earnings, and since a lot of major corporation multinationals have earnings abroad, they didn’t bring the money back. The shortfall was made up by issuing debt by the government, so we didn’t get the normal flow of cash back into the US, and the taxes back to the government that would have come from those dividend taxes.

That has been dammed up and now we have maybe $3 trillion dollars sitting offshore. They are suggesting, proposing that we only have 10% one time to get it back into the US. You can imagine that might bring back as much as $2 trillion, money that could not be invested in stocks, real estate or in getting jobs, all coming into the US. Yes, that will increase our growth and we think that it will have a positive impact on M&A.

Globally and in every single market we are seeing activity. I expect that Q1 next year will see more companies going under LOI than at any time in history.

We are at the end of our time. We had one other quick question here, and we have 15 more that we will get to offline. The quick question is, “I have been approached. How do I know my value, if it is even worth talking to these folks?”

Well, one thing I would suggest you do is attend our annual webcast next month which will cover all 30 sectors and valuation metrics, as well as disruptive tech trends that you can align yourself with. We will have our luminary panel there, we’ve had folks from Google, IBM, Salesforce, SAP, and Microsoft there in the past, as well as all the major PE firms. We’ll be talking value from the buyer’s perspective. We’ll have the buyers group in January, a panel of PE firms in February and we’ll have our annual seller’s panel in March.

To answer your question, we’ll be happy to give you time with our analysts for free just to see if we think you have value and where you might be placed on our buyer’s list today.

That puts us at our 30 minute mark. Thank you for attending today.