On Working with Acquirers

Stan McKee, Former CFO EA and Former Board member of Arcsight

Until retiring in 2002, Stan McKee served for over 13 years as the Executive Vice President and Chief Financial and Administrative Officer of Electronic Arts Inc., the world’s largest developer and publisher of interactive entertainment. Mr. McKee served on the Board of Arcsight, which eventually sold to HP for $1.5 billion, as Chairman of its Audit Committee. He has also served on the Board of Leapfrog as Chairman of its Audit Committee since 2003.

Summary Notes on Working with Acquirers

Are companies bought or sold?

Both, but the focus should be on building a great business
As a public company, Stan had to vet the market for the best possible deal
He had existing relationships with most potential acquirers, and companies and shareholders ended up benefitting from the bidding war between buyers

What is the mindset of the enterprise when thinking about acquisitions?

There are several approaches:

Some want to grow via acquisition
Some are looking for strategic or tactical fits to help grow a business silo
At EA, the business development group sourced deals that may be helpful or strategic
As a larger company, it’s very easy to acquire smaller companies, but very difficult to make them work
Cultural fit is important
An individual champion for an acquisition within the company is crucial
Trying to blend cultures is challenging

The importance of developing relationships with potential acquirers

These relationships are developed over time
Industry conferences are a good place to meet key players