Closing Project Velocity has taken a turn for the worse. Or, I should say, the larger issues that have always been contained within Project Velocity have begun to emerge.
From the beginning we suspected that the involvement of other private equity firms would either price Velocity beyond the scope of reason, or make the process too prolonged and difficult to manage. Both are now true.
Velocity's management has responded to our letter of interest, and more particularly to the pricing range we offered, with the mergers and acquisitions equivalent of a Walther Mathaeuesque grumpy frown, a long whiny letter. It is three pages but boils down to "We think it's worth more," and is highlighted by this absolute gem of business literature:
"In our conservative estimation the cash portion of remuneration contemplated by your letter of [Date] may be in need of some adjustment."
No wonder this company pissed away so much money. They must a committee of seven attorneys writing letters by committee or something. What I wouldn't give one day to get a letter more like this:
April 3, 2006
Sub Rosa, LLC
Re: Valuation of Velocity, Inc.
Dear Equity Private,
Of course, I know exactly which firm it is that's pushed Velocity's expectations into high Earth orbit. I suspect it is pointless to pen a letter back pointing out that the cash in our offer is unlikely to shift downward much, while others are. I'm not even really supposed to know who else is interested, but I do. Since it's been a bit slow, I am going to write the letter anyhow.