01:49:05 · David Senra, Luca Ferrari
[01:49:05] S0: No, we talked about this at lunch. I think you have a very unique... Let's talk about this now. You had a very unique approach to negotiation. I'm pretty sure you explicitly said you don't want to come in as like how most people do. It's like, let me just put a really low number right now, and then you say a higher one, and then we go back and forth and back and forth and back and forth. [01:49:24] S1: I think in time, you want to be known as a I want to say generous, because obviously nobody buys a company as generos. But you want to come across or establish a reputation as someone who's trying to get the last penny out of a negotiation, you want to help the seller get good value from the transaction. But at the same time, want to be known as pretty firm. I put a number that I think is absolutely fair and highly competitive on the table. I probably think I could have gotten lower, but I'm not trying to get all the value out of this transaction at all. I wanted to get a lot of the value. But at the same time, I'm not going be available for a lot of back and forth. [01:50:09] S0: Can you tell them that upfront?
01:50:09 · David Senra, Luca Ferrari
[01:50:09] S0: Can you tell them that upfront? [01:50:11] S1: Generally, no. If they ask us, sure, but hopefully they do their research. I can only think of one case in recent memory, is actually quite recent, where we ended up raising our offer substantially because But the reason is so in that case, we were asked, forced really, by the seller to put a number on the table before we had the data we needed. And so, between not even participating or risking to having to change it a lot later, we said, okay, look, we don't know a whole lot based on what we know. We think we'd be happy to do this at between x and y. And then later, as we progressed into, you know, the sales sales process and and we got more data and we finally could form a somewhat complete opinion, we found that we could offer a lot more. And so we we increased that offer substantially. It's really rare. [01:51:07] S0: You increased the offer on your own or they said that's way too low? [01:51:10] S1: You know, don't actually remember exactly how it played out. [01:51:14] S0: How would you do that? [01:51:15] S1: Probably a mix of the two. [01:51:16] S0: How would you... Yeah. How would you do that today? I would imagine if you think this
01:51:16 · David Senra, Luca Ferrari
[01:51:16] S0: How would you... Yeah. How would you do that today? I would imagine if you think this [01:51:19] S1: is an I think I would it. I think I would do it similarly because we just didn't... We didn't have the data and the the data wouldn't be forthcoming unless we put a number on the table. I don't... We're not trying to prove a point and be dogmatic and say we only put a number on the table if we have absolute certainty. So we said, look, we are not highly confident in this number because we don't have a lot of data, [01:51:38] S0: but this is a number. Okay. So let's say in a different example, you have the numbers that you need. You put the number out. Is that number pretty firm? [01:51:45] S1: Yeah. Generally, yes. I don't think we increased it almost ever by more than five or 10%.
01:51:45 · Luca Ferrari, David Senra
[01:51:45] S1: Yeah. Generally, yes. I don't think we increased it almost ever by more than five or 10%. [01:51:51] S0: So did you ever hear about the way Buffett bid for Clayton Homes? No, I don't. The founder of Clayton Homes wrote an autobiography. I can't remember what it's called, but I think his name is Jim Clayton. His son was handling negotiations because he had sat down and his son is the CEO. His son goes to Buffett. He's like, yeah, we'd... They were debating on price per share. He's like, board would entertain an offer at 17. Buffett goes, 12.50 bid. And then the guy comes back, he's like, all right, we talked over. We'll we'll take $15 Buffett goes, 12.50. He goes, all right, went back, we're gonna do $14 And he goes, dollars 12.50 is my final offer. And then his closer was, I can assure you, if every capital market in the world closed tomorrow, he's like, You can still rely on this offer. And they're like, We'll take $12.50 dollars
01:52:39 · Luca Ferrari
[01:52:39] S1: I will not name names, but we have had one or two situations a little bit like that. And look, I think it's easier to do because we're so confident. I don't believe to this day that we have ever been outbid. I don't remember a single case, at least not in the last five years, in which we put forth an offer and then the seller sold to someone else. We have had cases where they chose not to sell. Maybe they thought it was too low. I suppose they thought the offer was too low, but we have never seen that business being sold to someone else. And that... And we have been able to deliver the extremely high returns we have while winning essentially all winnable sales processes because of that massive advantage of an... As an operator where we can deliver such a improved performance vis a vis product equities per merchant and most of your people. When you have that ability to basically bid higher than... I mean, it's fair. I can't say everybody else every single time. Of course, there will be exceptions, but almost everybody else almost every time, then you can be confident in your offer. And we've seen that sometimes we put forth the offer and the sales party thought they could get more and they choose not to engage further. And then maybe we hear back from them, say, nine months later or six months later, and then they're willing to transact at that price because they needed to convince themselves that actually that's what you can get. It's harder to do if you think your offer is weak. Then you need to be much more persuasive and try to get it done before people shop it around. But in our case, we always say, Do you want to shop it Often people try to look for exclusives. They're like, this is my offer, but unless I get exclusivity within five days, the offer is gone. Because they know that their best chance is to win on timing. Like, I'm here now. They know the offer is not that great. In our case, when we're asked, we almost always say, look, if you want to, we encourage you to go and shop it around. Because in fact, once you convince yourself that this is the best offer, it'll be easier for us to. Like, it'll be a lot smoother from we'll sign faster, we'll close more easily. We want you to be fully satisfied that this is the best value for you and your shareholders that you can get. That's me, generally speaking, our approach.
01:54:48 · David Senra, Luca Ferrari
[01:54:48] S0: Think from the outside, I I would ask, like, how much of your business is run by numbers? Remember the discussion we had on jujitsu and MMA? [01:54:58] S1: Vaguely. Okay. Which part? You [01:55:00] S0: mentioned... You may... Named some people that you were fans of in the sport of jiu jitsu and MMA. Then you said the Don't weird [01:55:07] S1: even hire her. We discussed. And [01:55:08] S0: then you said one of the weirdest shit anybody's ever said to me in my life. And you're like, oh, by the way, I don't know what they look like. [01:55:14] S1: Oh, yeah. [01:55:14] S0: Yeah. Yeah. I'm like, how can you be a [01:55:16] S1: I don't remember. Yes. Yeah. [01:55:17] S0: Yeah. How can you be a fan of a sport and not know what the person looks I [01:55:21] S1: wouldn't say I'm a fan of the sport, but I knew something about this. I'm a little bit of a geek for stats, numbers. And so, yeah, Same for for a lot of sports, like, for example, CrossFit. I don't practice CrossFit. I barely have. I've I've probably seen You don't watch the sports. No. [01:55:45] S0: You study the data that comes off [01:55:47] S1: the sport. That's what I'm trying to get to. I would tell you that miss Tumi, she's the greatest prostitute of all time. She probably won, like, eight prostitute games. She only missed once when she was pregnant, I think, a couple years ago, and then she came back and won a game. So I don't know. I just love to... The stats. [01:56:01] S0: But you don't know what she looks like? I'm... If she's walking down the street, would you...