In the nineties, working on the tax side of M&A transactions there came a point where things seemed very slow and we harkened back to the many transactions that happened in the eighties and thought those days would never come back. But they did and I had a chance to work on many transactions since. But one day, in one particular transaction in the nineties, the rallying cry of the deal team was S-Y-N-E-R-G-I-E-S. One late evening in the late nineties, while the deal team reported out on the potential transaction synergies that sub-teams were considering, my mind wandered while I waited for my turn. As the deal kings went around the room, team by team taking in the potential synergy capture and by that time having many transactions under my belt, I pondered, if SYNERGIES was an acronym, what was its extension (that for which the acronym stands for)? As I scribbled hurriedly, between my synergy notes and the term, I reflected on how many merger transactions ended up with two people in the same roles and how these people interfaced in particular deals. In some cases the teams would merge together harmoniously, but in most deals there was only room for one, and that then led to a synergy capture or cost savings on that individual. I had seen deals where the severance packages available caused people to lose focus and become undisciplined in the day to day efforts. I had seen deals where the circumstances of an unknown future ate away at people and they also lost focus or became undisciplined. From these experiences and seeking to put some meaning to the term for future deal teams, I developed the following somewhat dark acrostic poem revealing the secret to capturing transaction S-Y-N-E-R-G-I-E-S in large scale M&A deals. It has served me well over the years and now, I share this poem here in this important work. While it does not have anything to do with the GAAR, it highlights the singular purpose for most transactions is not motivated by taxation.
