“I’m in a cab en route. Got the books with me,” I say holding my BlackBerry to my right ear while the box of bake-off decks sits to my left.
“I promise I left them on his porch. Exactly where I’ve always done it when I deliver to his house,” says a distraught Kwame.
“I screwed up. I moved desks earlier and forgot to tell you. The box on my old desk was a bunch of deal toys. The box on my new desk had the decks. Did you get the flight info?”
“JFK—6:17 a.m. departure. JetBlue, terminal five,” says Kwame.
“Can we pass this guy? Left lane is open. We’re in a right-turn-only lane,” I say to the Uber driver.
“Did you try Masters?” says Kwame.
“Called him twice—no answer. Sent him an email telling him I’ll meet him at airport with books.”
“You know what he looks like?”
“Behemoth guy, angry default face,” I say.
“And bald,” says Kwame. “Can’t miss him.”
“Need you driving with some urgency.” I lean forward, addressing the Uber driver as we cross the Brooklyn Bridge—4:23 a.m. read the neon-green digits displayed on the dashboard of the car. One would assume commuting in the wee hours of the morning would be quick, but it appears the perpetual construction on the Van Wyck Expressway kicks into high gear right around now.
“Can you check if there are any more flights?” I say to Kwame. “If I can’t find him at the airport, I might have to just fly there.”
“I’ll take a look.”
Traffic is bumper-to-bumper at exit one on the Van Wyck, with only one lane open. By exit three, the second lane is open, and by exit six, we’re screaming down the left lane, passing Queens in a blur all the way to JFK.
The Honda Civic screeches to a halt at the terminal-five departures drop-off. I snatch the box of decks and haul ass to the JetBlue curbside check-in desk as the sun pokes its first few rays in the horizon.
“Masters,” I say. “Has a Rick Masters checked in for a 6:17 a.m. fli—”
“Not authorized to—” begins the guy standing next to the desk. I sprint by him and inside.
And that’s when I spot Masters at one of the check-in kiosks.
He turns, boarding pass in hand, and our eyes meet. I lift the box of decks slightly as if to say, “Here they are.” He walks toward me, and without a word exchanged, he takes them nearly mid-stride before continuing to the security check-in line. The last image I have is that of the linear scar on the back of his head stretching from ear-to-ear, a relic of a now-abandoned attempt to salvage his hair.
My BlackBerry buzzes on the ride back to Manhattan—new staffing. I figure I’ll have just enough time to shower and throw on my suit once I get home, then back to the office.
The skyline of Manhattan comes into view as I sit in the thick of the rush-hour morning commute, horns honking and arms flailing out of windows. At one point, I think I spot the Deutsche Bank building, then I realize I don’t give two shits.
I can’t help but smile when a new email pops up on my phone—the receipt for my $94.78 Uber ride to JFK—and I realize that, at least this time, I’ll be reimbursed.
* * *
The bake-off goes well. Too well—DB is selected as the lead-left bookrunner. The term refers to the location of where the bank’s name appears on the prospectus, which is the official document filed with the SEC outlining the transaction. The bank on the farthest left (and usually in the biggest font) is lead-left. It’s responsible for nearly everything (creating roadshow/marketing materials, drafting offering documents, leading diligence sessions, and so forth) and is thus rewarded with the best economics. There are a couple “active” bookrunners (including the lead-left bank) that handle the majority of the deal, while another group of banks act as “passive” bookrunners and do next to nothing. Their role during the brunt of the transaction consists of dialing into phone calls, announcing they’re on, then going on mute. As the deal nears closing, their role consists of jamming the newly issued stock down the throats of their clients, but this is more of a sales and trading and capital markets job, so the corporate finance team doesn’t participate much.
As a junior banker, getting staffed on a deal as a passive bookrunner is the dream. It goes on the staffing log as “IPO” with no mention of the bank’s role. You could literally go through an entire week without doing a single thing, except maybe dialing into a diligence call if you’re working on a deal as a passive bookrunner. On the flip side, every week as a lead-left bookrunner is like drowning in a bag of shit—not even your own shit. Which brings me to where I am now.
“I bet you guys can see him from Kwame’s desk,” says Steve over speakerphone as I stand behind Kwame, who’s seated in his cube, a PowerPoint file open on his computer.
I arch my back slightly, tilting my head even further, and catch a glimpse of Masters, who sits in his office with the door closed.
“Yeah, I see him,” I say.
“Okay, I’m gonna try him again. Keep an eye out,” says Steve. I crane my head again as Steve puts our call on hold and dials Masters.
“Hear it ringing,” I say to Kwame, who remains tucked into his cube. “He’s looking at the phone…okay, definitely sees it and hears the ring…and he’s back to looking at his computer.”
“Any movement?” asks Steve as he comes back on the line.
“I could hear it ring,” I say. “Definitely went through, but he’s looking at his computer still,” I say.
“Would you say he looks pissed or just disgruntled?” asks Steve.
“Somewhere in between,” I say.
“Bill, how much would I have to pay you to walk into his office and tell him to answer our calls?” says Steve.
“A hundred Bitcoin,” I say.
“I’d do it for fifty Bitcoin,” chimes in Kwame.
“Shit, maybe I should just put my life savings into the crypto market,” says Steve. “Where’s Bitcoin trading—”
“Wait…I think I see movement to the phone. Looks like he’s dialing,” I say as I spot Masters stretch his arm to his desk phone.
“Yep. Dialing me,” says Steve. “Will loop him into our call.” Moments later, Masters is on.
“You got Bill and Kwame on the box,” I say after Steve conferences us in.
“Management wants these pages this afternoon, so need to turn quickly,” Masters says as his greeting. “Page two…multiple on the Tronox deal looks off.”
“We double-checked the calculation and get one-point-four times book value,” I say. “Cross-checked with equity research and they have same—”
“It just looks wrong,” says Masters.
“Alright,” I say, “So should—”
“Page three…need pie charts on end-market exposure for each segment.”
“Rick,” says Steve, stepping in before the call spirals out of control with unreasonable demands. “We’ve looked into the segment exposure, and we don’t have the data. We can put place holders or list the end markets in bullets, but we don’t have the percentage breakdown.”
“Put placeholders,” says Masters. “Where are we at with the benchmarking pages? This needs to be right and need it in the next two hours.”
“The guys are finishing up the analysis. I’m going to review in next thirty minutes,” says Steve.
“Fine. And we need that standard benchmarking page with all companies in sector,” says Masters.
“We’ll get it updated and slot in,” I say.
“Fine,” says Masters. “That’s it.” Then he hangs up.
“Kwame, Bill, you guys still on?” says Steve.
“Yep,” says Kwame.
“All clear on those comments? Don’t worry about that multiple. It’s right—leave it.”
“Think we’re good,” I say.
“And just make sure that standard benchmarking page has the full set. Masters will check that page and get all sorts of rattled if it’s not complete.”
“Will do,” I say.
The “standard benchmarking page” of which Steve speaks is a clusterfuck of numbers—in this case, 535 unique numbers on a single page. While not overly difficult to market-update the page, it’s M&A activity that creates headaches for juniors on “standard” pages like this. If a company makes an acquisition or sells a division, the financials and multiples need to reflect the new company. This is known as the pro-forma entity. Finding the data to pro forma a company is a witch hunt, and even when there are publicly available figures, you’re dealing with imperfect information.
Oftentimes, we’ll reference prior decks we’ve done for a given company. Everything is archived, which means I’ve been able to sift through decks from the 1990s, when Excel and PowerPoint weren’t even used. These decks from the ’90s had 50 percent of the information that comparable decks have on them now. I can only imagine what decks looked like in the ’70s, or if there were any decks at all. With the computing power of the programs we have now, coupled with the innumerable resources we have access to (FactSet, MAKS, and so forth), senior bankers can demand juniors slap every number in the world into a deck and see what the client gravitates to, instead of putting thought into the deck beforehand and thinking through what could be important. So we’ll run fifty-seven sensitivities on growth, forty-nine model scenarios, and throw a zillion pie charts on a page, and hope something grabs the client’s attention—your classic “throw some ramen noodles against the wall and see what sticks.”
John Bukowski: let's rip down to Florida for some golf this weekend
William Keenan: what?
John Bukowski: got eyes on a 2:09pm flight from LaGuardia on Friday
William Keenan: you realize there's no chance of that happening
John Bukowski: yeah, but fun to at least fantasize a little
William Keenan: get in early evening Friday, play a twilight 9 before a late lobster dinner, then 36 on Saturday
John Bukowski: can you give me a pity LinkedIn view, haven't had any in like 3 days
William Keenan: if you give me your leftover fries that are in the fridge
John Bukowski: leftovers command a premium—pity view plus message
After knocking out some of Steve’s text comments, I return to Kwame’s cube.
“How we looking?” I ask.
“All done except the benchmarking page. This guy,” says Kwame tapping a company’s logo on the screen, “bought a performance-materials division recently, and I’m having trouble finding details on how they financed it.”
“Think I saw a presentation on their website that shows shit on it,” I say.
“Yeah, but it just shows pro forma EBITDA,” says Kwame.
“Do we know the multiple they bought it for?” I ask. Kwame nods. “So we can back into the target’s standalone EBITDA, then multiply by acquisition multiple to get enterprise value for them. Then we can just make an assumption that they used seventy-percent debt or something.” I pause, wondering if that makes any sense.
“But Steve said Masters looks very carefully at this page,” says Kwame as he rifles through various PDF documents and websites in search of detail on the deal.
“There are five hundred and thirty-five fuckin’ numbers on the page,” I say. “And we have thirty minutes to get this out. Just hardcode the assumed-acquisition debt and you can even write in note, ‘As per Bill.’”
“No,” says Kwame as he turns in his chair and looks at me, his face full of concern. “If I hardcode, it will screw up the flow of the page when we update it. I need to understand this.”
Like most tasks on this job, my philosophy is get it done now, and maybe later try to understand it, if there’s time or interest. Not sure I have much of either these days.