first catalyst the mergers & acquisitions challenge:a high … · 2005. 10. 12. · ment...

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1 Embarcadero Center

San Francisco, CA

tel: 415.776.7773

First Catalyst provides pragmatic technical and operational assistance to corporations and investment

firms in all phases of the mergers & acquisitions (M&A) process. Our value-add is to complement an organi-

zation’s strategic and financial objectives of the M&A process with proven technical and operations manage-

ment support – thereby reducing M&A investment risk and maximizing return on investment. We provide

a concentrated band of services tailored to each client and opportunity, and we have an established track

record of excellent results.

The Mergers & Acquisitions Challenge: A High-Stakes, Time Critical ProcessThe M&A process is both time-sensitive and time-consuming, and as such presents significant challenges for

all involved parties – buyers, sellers and their financial advisors / investors. Each phase of the M&A

process involves different decision-makers with different expertise. In addition, time pressures, confiden-

tiality requirements and the need for discretion often make it difficult to share information and optimize

decision-making.

The Mergers & Acquisitions Process

Unless the above-mentioned challenges are addressed, the risk of failure increases. At the least, it can pro-

long the payback and/or minimize the projected return on investment. At worst, it may mean that the

entire acquisition ends up costing more than it will benefit the enterprise.

E X E C U T I V E S U M M A R Y

o Lack of management focusand attention

o Non-specific/ill-defined goalso Limited knowledge of

technology requirementso Emphasis on strategy/finan-

cials without correspondingtechnical/operational input

o Unrealistic objectives/targets/

ROI goals

challenges

implications

implementation discovery due diligence and integration

o Insufficient time/resources tofully assess competition

o Cursory technical evaluation o Unfamiliarity with new

markets ➝ inadequateresource planning

o Under-estimated integrationcosts / process

o Sub-optimal selection of ‘marriage partner’

o Unknown/unforeseen challenges in entering newmarkets

o Changing schedules/ deadlines – chaotic process

o Inexperienced implementerso Unforeseen technical hurdles

o Insurmountable technicalproblems

o Frustrated employees (at riskof resigning)

o Integration costs outweighM&A benefits

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The First Catalyst SolutionThe First Catalyst Group seeks to minimize acquisition risk, by providing measurable value at each phase of

the M&A process. During discovery, we offer a much-needed pragmatic technical / operational perspective

to complement strategic and financial objectives. During due diligence, we ‘go deep’ to expose and analyze

all of the competitors (or prospective marriage partners) in a specific market, to ensure that the best compa-

nies are identified quickly. In addition, our deep domain expertise along with our extensive network of

technical resources in the communications and enterprise software markets – means that we rapidly pro-

vide thorough and sophisticated technology assessment. In the integration / implementation phase, our

track record enables us to avoid common integration pitfalls, develop and meet realistic deadlines, and opti-

mize M&A ROI, with a minimum of disruption to the organization. Equally important, our involvement in

all phases of the M&A process ensures continuity, efficiency and accelerated implementation.

While The First Catalyst Group prefers to be involved in all three phases of the M&A process, we

are committed to meeting the specific needs of individual clients, and can work flexibly to add value in any

single phase.

ServicesThe First Catalyst Group has in-depth experience focused in a number of technology sectors, including: com-

munications and enterprise software. Nevertheless, the M&A process is remarkably "horizontal" and appli-

cable across industries. Our services include:

Success Storiesacquisition-specific corporate development

o Tegal Corporation (Nasdaq: TGAL) is a leading designer and manufacturer of plasma etch and deposition

systems used in the production of integrated circuits.

Since Tegal became a client in late 2002, we have helped manage one acquisition and one additional sig-

nificant transaction. The acquisition is expected to be accretive in the second full quarter of combined

operations.


o Strategic Opportunity Identificationand Development

o Corporate Developmento Partnerships & Alliances

implementation discovery due diligence and integration

o Technical Assessment/Evaluationso Bridge Technology Developmento Technical Operations Managemento Quantitative/Qualitative

Assessments

o Implementation Planning andExecution

o Post-Investment TechnologyTransition and Integration

o Prototype Development

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partnerships and alliances

o Ericsson Radio Systems. Designed and developed a global network of strategic alliance relationships and

market development program with IBM, Oracle, Palm, Symbian, Microsoft, (and others). This $70 MM

investment resulted in sales in excess of $2.2 billion of network infrastructure to mobile operators

worldwide.

implementation and integration

o Invented the TrackPoint in-keyboard pointing device that was integrated in notebooks computers such as,

Compaq, Fujitsu, HP, IBM, Sony and others. Many other innovations supported the market development

for the IBM Thinkpad product line which ultimately generated in excess of $6 billion in annual sales.

Represents a $1.3 MM investment

o Developed the Projection Notebook Computer - generated in excess of $100MM for IBM. Represents a $150

K investment

o Prototype development for user interface and approach for browse and search framework technologies

which became the basis of Google server technology. Represents a $25 K investment

o Developed and marketing WBI, a transcoding subsystem into the IBM WebSphere product offering.

The First Catalyst Team

martin gutierrez – corporate development

Martin has held senior management positions with companies in the telecommunications industry for over

14 years. He has experience in the wireless, wireline and Internet sectors. Most recently as Vice President of

Business Development with Aether Systems, he developed strategy and built partnerships and alliances with

carriers including AT&T Wireless, Cingular, and Sprint PCS, and wireless technology vendors such as

Comverse, Openwave, Nokia, and IBM. Prior to Aether, Mr. Gutierrez worked with Ericsson as Senior

Director of Worldwide Business Development.

Martin designed and developed a global initiative to secure strategic alliances for Ericsson's Radio

Systems division to support market acceptance of GPRS. He helped to design and develop a portfolio of serv-

ices including training programs, an application testing environment, and a market development program.

At Ericsson Martin secured and developed strategic alliance relationships with leading systems integrators,

software companies and platform vendors such as Accenture, IBM, Oracle, Palm, Microsoft, and Symbian.

His efforts were instrumental in securing significant infrastructure contracts with carriers in Europe, the

US, and Latin America.

Before Ericsson Martin was Principal at Catalyst Information Technologies, a business develop-

ment, and marketing consulting company. Catalyst developed strategy and business relationships for compa-

nies such as Mitsubishi Electric Research Labs, NTT Data USA, Cubik Media, Cyber Dialogue, Intershop

Communications, and Cybercash. Martin started his career working in business development with Sprint

Communications.

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hans davidsson – corporate development

ted selker – technical operations

Dr. Ted Selker is an Associate Professor at the MIT Media and Arts Technology Laboratory and the Director of

the Context Aware Computing Lab (www.media.mit.edu/context). Prior to joining MIT faculty, in November

1999, Ted worked at the IBM Almaden Research Center, where he became an IBM Fellow in 1996. He has

served as a consulting professor at Stanford University, taught at Hampshire University of Massachusetts, at

Amherst and Brown Universities. Dr. Selker also worked at Xerox PARC and Atari Research Labs.

Dr. Selker's research has borne fruit in several product lines and has contributed to hundreds of

products ranging from notebook computers to operating systems. His work takes the form of several proto-

type concept products a year supported by cognitive science research. He is known for the design of the

"TrackPoint III" in-keyboard pointing device now found in Compaq, Fujitsu, HP, IBM, Sony, TI, and other

computers. He also created the "COACH" adaptive agent that improves user performance (Warp Guides in

OS/2) and for the design of the 755CV notebook computer that doubles as an LCD projector.

Dr. Selker built the User Systems Ergonomics Research or USER at IBM. It is known for creating

dozens of product visualizations in the form of prototypes and products yearly. USER is also known for creat-

ing dozens of patents, refereed articles and for dozens of articles and other press which feature its work

every year. He created the now famous forum, New Paradigms for Using Computers.

Hans Davidsson is a Managing Partner of Seaboard Ventures, an early stage venture capital firm focused on content, communications and Commerce.

Mr. Davidsson brings an extensive career and global experience as a senior executive at Ericsson, one of the world’s largest wireless infrastructure and services companies. During his career at Ericsson, Mr. Davidsson served in several senior technical and business roles, including: founder and President of Ericsson’s Wireless Internet group; Vice President of Sales – New Product for North and Latin America; Global R&D Director for Ericsson’s mobile phones group; and General Manager of a multi-billion dollar infrastructure business unit in charge of Ericsson’s access products.

Mr. Davidsson also brings an established track record of successful private equity investment, having served in founding, advisory and formal board roles and assisted in raising venture capital for approximately 25 companies.

As a managing partner of IdeaEDGE Ventures, a California-based venture development firm focused on the convergence of computing and communications, Mr. Davidsson led and/or participated in several private equity investments. He remains an active Director and Advisory Board member in numer-ous companies around the world.

Mr. Davidsson is also a Director of the Swedish American Chamber of Commerce. He is a graduate of the Linköping University of Technology and Business Management in Sweden.

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Dr. Selker and his inventions have received more than 30 awards from publications like PC

Magazine, Business Week, and BYTE. He is the author of 17 patents, 20 papers in refereed journals and con-

ference proceedings. More than 40 articles in newspapers and magazines such as the New York Times, the

Wall Street Journal, Business Week, Investor's Business Daily, Wired, and London Times have been written

about Dr. Selker and his work.

tim andrews – technical operations

Tim is a technology visionary and entrepreneur, and has been inventing and commercializing innovative

technologies for 25+ years. He has also applied his knowledge and experience as a technology strategist to

help institutions of all sizes understand and act on the implications of emerging technologies. His ideas and

advice have led to improved performance in many firms including CNA insurance, Pfizer, AXA, GM, Sony,

Compaq and HP. Tim has helped to create software advances that are part of many of the most popular

tools and applications for sale today, for example object oriented extensions to relational databases such as

Oracle, many ‘4GL’ query languages, and many of the ‘GUI’ development tools. Currently Tim is helping sev-

eral early stage companies, and is the founder and Chief Technology Officer of The Concord Ensemble LLC, a

software development firm.

For the last decade Tim has been helping corporations exploit emerging technologies, recently the

Internet as CTO of Viant Corporation, an Professional Services firm providing Strategy, Design, and

Technology services to major corporations making the move to the Internet. During his tenure revenues

increased from 20 million dollars to 120 million dollars, employees increased from 90 to 700 professionals,

and the company raised over $200 million dollars in capital through a successful IPO and a secondary offer-

ing. Before Viant Tim was a senior partner with Diamond Technology Partners, Inc. (now DiamondCluster),

where he worked closely with senior executives of major corporations in one of the earliest multi-discipli-

nary practices, merging technology with traditional business strategy to produced superior results for

clients.

Tim has been widely published over the years in books and periodicals ranging from the highly

technical to general media. He authored Peer-to-Peer: A Point of View, a Viant white paper (2001), Creating

Options in Context Magazine (1998), Technology for Strategists, a CSC white paper (1996), Achieving Integrity

with Relational Databases and Objects, INFO/DB (1993) and was a contributor to the best selling business

book Unleashing the Killer App (1997) and many additional publications.

Tim received an MSEE/CS from Worcester Polytechnic Institute (1980) and an A. B. from Dartmouth

College (1978).

tony clapes – technology law

Mr. Clapes is a leading participant in Hawaii's efforts to diversify its economy through attracting and grow-

ing high-tech businesses. His book, Blue Wave Millennium: A Future for Hawaii, is the seminal work on that

subject. He is on the Board of Advisors of the Manoa Innovation Center, the state's premiere business incu-

bator, and is assisting numerous high-tech businesses in Hawaii to move beyond the seed stage. He also eval-

uates and assists technology-based start-ups for private investors.

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Mr. Clapes was formerly Assistant General Counsel for IBM. Other experience includes internation-

al assignments (Paris), Far East responsibilities (IBM Asia-Pacific), lead counsel communications products

operations unit and PC/mini operations unit. Mr. Clapes has substantial experience in litigation, arbitration

and mediation of technology cases of all kinds.

Mr. Clapes is regarded as an authority on innovation-related legal issues. Mr. Clapes authored two

books on legal protection for software and numerous articles on computer law and Internet law. Mr. Clapes

is frequently invited to speak on these issues in the US and overseas.

Mr. Clapes served as Director of the Computer Law Association, 1994-96, and is a member of the

American Arbitration Association roster of arbitrators and mediators. Mr. Clapes is also a member of the

American Bar Association committees on Law/Science/Technology, Litigation and Antitrust. Mr. Clapes has

been named one of the country's leading high-tech lawyers by the National Law Journal. He earned his law

degree at Yale Law School and BE Aerospace Engineering at Rensselaer Polytechnic Institute.

jan snygg – corporate development

Jan Snygg has 22 years of experience in the information technology, and telecommunications sectors. Mr

Snygg has served as Senior Partner and Investment Manager at Ledstiernan, a leading Swedish venture capital

firm, investing primarily in early-stage IT and telecommunications related companies with emphasis on

wireless and mobility. During his tenure at Ledstiernan, Snygg was engaged in the strategic and operational

development as a senior board member of a number of early-stage companies such as Hotsip, Ticket Anywhere,

Infomakers, and Incomit. Snygg was instrumental in securing later stage funding, selecting merger and

acquisition candidates, as well as channel partnerships with global companies such as Amdocs, BEA, Ericsson,

HP, LogicaCMG, and Nokia.

Before Ledstiernan, Snygg was based in the Silicon Valley and served as Vice President of Business

Development and General Manager of Ericsson’s Datacom Networks & IP Services. Mr. Snygg directed M&A

related activities, software development, as well as managed partnerships with AT&T Labs, Juniper, Novell, and

SUN. His team also lead sales and market development initiatives towards U.S. based and global telecom

operators such as AT&T Wireless, Bell South, SBC, and Vodafone. Snygg also held various management

positions within Ericsson, such as Corporate Product Portfolio management as well as Product Unit manger for

Broadband and Multimedia within Ericsson Business Networks.

Prior to Ericsson Snygg was responsible for establishing a Fibre Optics business unit at a Swedish

electronics components VAR, Gosta Backstrom, which was subsequently acquired by Ericsson. In 4 years he

managed to build and establish a leading and profitable business unit, representing a number of global brands

in the Swedish market place.

In 1983, Snygg received a Master of Science degree in Electrical Engineering from Chalmers Institute

of Technology, Sweden.

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Makmuri has extensive experience in deploying emerging technologies to solve critical business needs

in fast-paced environments such as mission-critical applications in online financial services, network manage-

ment and telecom systems, derivative trading systems, and manufacturing automation.

sukan makmuri – technical operations

Sukan Makmuri is an expert in sourcing and managing offshore product development and support. Mr.

Makmuri, based in the Silicon Valley, has managed development and support projects in 5 offshore countries:

China, Hong Kong, Korea, Taiwan and Singapore.

Previously, Mr. Makmuri served as Chief Technology Officer and VP Operations at eForceGlobal, where he led the

delivery of projects for clients such as Wells Fargo, Bank of America, Nortel, and numerous medium-sized and

start-up companies. He also served as VP of Technology at Bank of America for their Interactive Banking division,

where he spearheaded several significant strategic technology initiatives that enabled Bank of America to secure

a leadership position in Call Center, Customer Relationship Management, and e-Commerce deployment and

management.

Mr. Makmuri has a BS degree from UC-Santa Barbara, an MS in Computer Science from Rice University,

and an MS in Engineering Management from Stanford.

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investment banks with which we maintain working relationships:

o JP Morgan Chaseo Bear Stearnso Deutsche Bank Alex Brown o Lehman Brothers

o Prudential Securities Inc.

o S G Cowen Securitieso CIBC World Markets

o Ledstiernano Capmano Eqvitec Partnerso Four Seasons

o IT Providero Nordic Venture Partnerso Northzone

the Venture Capital firms with which we work closely are:

o Batteryo Greylocko SI Ventureso Hummer Winblad

o Technology Partnerso Crosslink Capital

o Vertex Managemento Osprey Ventureso

o 3io

o Amadeuso

o APAX Partners

Scandinavian Venture Capital firms with which we work closely are:

For additional information, please contact:First Catalyst, LLC

One Embarcadero Center

P.O. Box 26322

San Francisco, CA 94126

tel: (415) 776-7773 [email protected]

ResourcesThe First Catalyst Group has created a network of technologists, strategic alliances with top academic insti-

tutions, and investment firms as a resource to provide a continuous stream of qualified investments and

ensure optimal "fit" to any particular investment.

academic institutions:

o MIT Media Lab – Massachusetts Institute of Technologyo Stanford University

The investors and acquirers engage us for focused corporate development and technical integration

services to achieve required milestones in a greatly reduced timeframe in a few critical areas. The

First Catalyst Team has established a successful track record of helping companies maintain high levels of

performance that enable mergers/acquisitions involving both public and private companies – as well as

achieving liquidity events such as seed funding, venture rounds, corporate financial partnerships, IPOs and

secondary public

first catalyst the mergers & acquisitions challenge:a high … · 2005. 10. 12. · ment...

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