Page 148 of 12 Years
‘And?’ Philip said.
‘We can consider it. What valuation will CloudX give us?’ Mudit said.
‘Ah.’ Philip smiled. ‘Finally, the question that matters.’
Mudit and I sat on the edge of our chairs.
‘Your last valuation,’ Max said, as his analyst put up a slide on the conference-room projector, ‘was at two billion.’
‘That was two years ago.’
‘Yes,’ Max said. ‘Our client is aware of that. So, we propose to buy SecurityNet at 2.5 billion dollars.’
Mudit and I stood up, almost in sync.
‘Guys, I think we’re all wasting our time,’ I said. ‘Nice to have met you though.’
‘Wait, Saket, please. Sit,’ Max said. ‘Mudit, please, have a seat. We can discuss this.’
‘There’s nothing to discuss. Word on the street is that we could have a hot IPO and get listed at a five-billion valuation, and you want to buy us at a distress price,’ Mudit said.
Mudit and I took two steps each towards the conference-room door.
‘Let’s make it three billion, if that helps,’ Philip said.
Wow, two confident steps, and half a billion dollars gained. If we played this game right, we and our investors could end up richer by thousands of crores.
Mudit and I turned towards Neeraj and Philip.
‘Let’s discuss our mutual expectations? Much better if we all sit down,’ Neeraj said.
Nodding, Mudit and I walked back to our seats and sat down again.
‘Five billion,’ Mudit said. ‘Half in cash. Half in equity.’
‘Mudit,’ Philip said, clearing his throat, ‘I understand that you both feel your company has a lot of value, and it probably does.’
‘It does have a lot of value. And a lot of future potential too,’ I said. ‘We haven’t even entered that many markets yet. We’re also developing so many new technologies.’
‘You may be right. However, we don’t know all that. To give you a proper bid, we’ll have to conduct a thorough due diligence,’ Philip said.
‘You’ve worked in private equity, Saket,’ Neeraj said. ‘You know how this works.’
‘Fine,’ I said. ‘Do the due diligence. Whatever it takes.’
‘But I’m afraid, even with that, five billion is too much. That is the best-case, market-risk-dependent IPO price in a year’s time. We’re giving you certainty, and we’re giving it now. You’ll both agree we deserve a discount for that,’ Philip said.
Mudit and I looked at each for a second, then I gave him a slight nod.
‘Four and a half,’ Mudit said.
‘Three and a half,’ Philip said, ‘subject to due diligence and with no unexpected concerns coming up during that process.’
‘Where do you think you are to be bargaining like this? Mumbai’s Fashion Street?’ I said.
‘What’s your final number?’ Neeraj said.
‘4.25,’ I said.
