Most every dealmaker can recant a story of extreme dealmaking. The tougher the challenge -- whether posed by technological change, globalization or competition -- the more innovative the deal structure often needs to be. What hurdles have these innovators had to clear? What have they learned?

Answering those questions at the Corporate Dealmaker Forum Thursday were Kenneth Kharbanda, SVP of mergers and acquisitions at AOL LLC; Joy Shih, director of corporate development and M&A with Motorola Inc.; and Philip Brandes, a partner at Mayer Brown LLP. Josh King, VP of business development and general counsel at Avvo Inc., who is also a frequent contributor to Corporate Dealmaker's quarterly features, moderaed the panel.

King began the discussion on complicated deal structures: "[What] we're talking about here is complicated deal structures. ... In the past few months, the gun-to-the-head government intervention types of deals certainly fit the category well," he said. "Massive deals are happening, with federal regulators, etc., and they have tight time frames."

Brandes agreed, commenting the trend has been toward doing more diligence. "The past month has been astonishing with J.P. Morgan and WaMu, and Bank of America Corp. and Merrill," he said.

So how should dealmakers get these deals done with a lot of "debt and toxicity out there?" King asked,
"How do you balance diligence and speed?"

Brandes answered: "We're factoring in massive write-downs. There's a trust factor in these slap-together deals as well."

Kharbanda agreed: "There is a great knowledge of the business between these bankers. You negotiate the best you can and then see how badly you need to do the deal. There's a balance of price and the risk of buying into the unknown."

With the price and the economic climate in mind, King asked, "How do you deal with buying early-stage or small companies?"

Kharbanda said that on pricing, there are a lot of factors. "You could, say, pay $1 million per person and go from there," he commented.

Smith noted: "IP [Intellectual Property Management] is the prominent factor for us to look at."

Extreme dealmaking also involves private equity players. On managing PE divestment, Kharbanda said bankers come in handy. "You need a marketing mentality," he commented.

But Brandes sees a lot of opportunity with the headwinds right now. "In LBOs I've closed, sponsors were incredibly committed, willing to take risk because of attractive valuations."

Kharbanda warns: "Every deal has your 'Wow, I didn't see that.' You battle through them."

King asks if smaller firms are attractive. Kharbanda remembers a deal when GE got into a family-owned business in Europe and ran into numerous barriers including a language barrier and figuring out the family run books. "It took a year. You have to peel back layers with those kinds of deals."

Brandes agreed: "It's very emotional; families identify themselves with these companies, and changing the name over the door can be tough. It's easy to understand, but it's hard to overcome."

Smith said: "I once felt like a family therapy counselor, or a kid saying 'You always loved him more than you loved me.' " - Baz Hiralal

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