Give Ivan Seidenberg and his team at Verizon Communications Inc. credit. Though Alltell Corp. was highly attractive as an addition to Verizon Wireless, they also had a well calibrated sense of what the company is actually worth to them and their shareholders. So last year, when debt-fueled private equity buyers bid the price up, they had the discipline to hold back.
"A year ago when this asset was available, it was in auction, and there
were multiple parties bidding on it, and the clearing price to us
would've been a lot higher than the one that we just purchased at
today," the Verizon CEO and chairman said during a Thursday
call.
Although Verizon Wireless "always believed that we were a natural
partner," Seidenberg said, the company took the risk that "rather than
overpaying, there would be a better day."
This is an especially good example of a much broader phenomenon.
When credit was easy and financial buyers were doing the unthinkable and outbidding strategic ones like Verizon, we were often reminded that this isn't supposed to happen, because strategic acquirers have synergies and financial ones typically don't.
But that was just part of the story. Here's the rest: Not only do strategics have synergies, but in recent years they've gotten much better at mapping them and more disciplined about not bidding into them. So when things get frothy, they are more likely to bide their time -- which, as Verizon showed, is once more at hand.
How strategic acquirers learned these lessons -- and how they put them to work -- is the subject of the latest Corporate Dealmaker
cover story, posted on our site Friday morning and available in print on Monday. -
Kenneth Klee
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