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Frank Quattrone's Autonomy Pitchbook

Tyler Durden's picture




 

For anyone interested, here is the presentation that Autonomy and its infamous banker, Frank Quattrone (currently of Qatalyst - a bank best known for "borrowing" the templates and stylesheets of the investment banks its current employees previously worked at - and previously of "extended Wall Street sabbatical" which was cancelled so he would bring such quality deals as the sale of Palm to HPQ and, of course, Autonomy to HPQ) used to pitch Autonomy to Oracle, which led to a less than hospitable response by multi-billionaire Larry Ellison.

Autonomy Overview (pdf 1 and pdf 2)

 

* * *

As for Ellison's (who apparently did not become stinking rich by engaging in stupid transactions) take on the Autonomy sales pitch, here it is:

"After HP agreed to acquire Autonomy for over $11.7 billion dollars, Oracle commented that Autonomy had been ‘shopped’ to Oracle as well, but Oracle wasn’t interested because the price was way too high.  Mike Lynch, Autonomy CEO, then publically denied that his company had been shopped to Oracle.  Specifically, Mr. Lynch said, “If some bank happened to come with us on a list, that is nothing to do with us.” Mr. Lynch then accused of Oracle of being ‘inaccurate’.   Either Mr. Lynch has a very poor memory or he’s lying.  ‘Some bank’ did not just happen to come to Oracle with Autonomy ‘on a list.’  The truth is that Mr. Lynch came to Oracle, along with his investment banker, Frank Quattrone, and met with Oracle’s head of M&A, Douglas Kehring and Oracle President Mark Hurd at 11 am on April 1, 2011.  After listening to Mr. Lynch’s PowerPoint slide sales pitch to sell Autonomy to Oracle, Mr. Kehring and Mr. Hurd told Mr. Lynch that with a current market value of $6 billion, Autonomy was already extremely over-priced.  The Lynch shopping visit to Oracle is easy to verify.  We still have his PowerPoint slides.”

and

Another Whopper from Autonomy CEO Mike Lynch
REDWOOD SHORES, Calif., September 28, 2011

 

Oracle issued the following statement:

 

“Autonomy CEO Mike Lynch continues to insist that Autonomy was never ‘shopped’ to Oracle.  But now at least he remembers and admits to meeting with Oracle President Mark Hurd and Doug Kehring, Oracle’s head of M&A, this past April.  But CEO Lynch insists that it was a purely technical meeting, limited to a ‘lively discussion of database technologies.’  Interesting, but not true.  The slides Lynch showed Oracle’s Mark Hurd and Doug Kehring were all about Autonomy’s financial results, Autonomy’s stock price history, Autonomy’s Price/Earnings history and Autonomy’s stock market valuation.  Ably assisting Mike Lynch’s attempt to sell Autonomy to Oracle was Silicon Valley’s most famous shopper/seller of companies, the legendary investment banker Frank Quattrone.  After the sales pitch was over, Oracle refused to make an offer because Autonomy’s current market value of $6 billion was way too high. 

 

We have put Mike Lynch’s PowerPoint slide sales-pitch up on the Oracle website – Oracle.com/PleaseBuyAutonomy – with the hope Mike Lynch will recognize his slides, his memory will be restored, and he will recall what he and Frank Quattrone discussed during their visit to Oracle last April. Yesterday, the Autonomy CEO did not remember having any meeting with Oracle.  Today, he remembers the April meeting and inaccurately describes how it came about and what was discussed (see next paragraph). Tomorrow, he will need to explain his slides.

 

Mike Lynch describes his meeting with Oracle: “On one of my trips to SF (April 2011), Frank Quattrone whom I have known for a long time offered to introduce me to Mark  hurd. Oracle was a customer and I have never met him, so it was a good opportunity. Frank does this from time to time on my visits, he has introduced me to many people. . NOTE: Frank was not engaged by Autonomy and there was no process running. The company was not for sale. I recall meeting with mark and someone else I believe called Doug. At the start of the meeting they joked that frank was there to sell them something. Frank and I made it clear that was not the case. We then met and had a lively discussion about database technologies. The meeting lasted approximately 30 mins. Frank is happy to confirm this.”

h/t nolsgrad

 

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Wed, 11/21/2012 - 16:15 | 3003094 Cognitive Dissonance
Cognitive Dissonance's picture

If at first your fraudulent sale doesn't work, try try again.

<Frank.....HP on line two.>

Wed, 11/21/2012 - 16:55 | 3003217 slaughterer
slaughterer's picture

Haven't all ZHers, including the slaughterer and some of the Tylers, been in Quattrone's shoes at one point, pitching a POS company to some half-retarded prospect?  A little respect please.  

Wed, 11/21/2012 - 17:01 | 3003241 knukles
knukles's picture

I tried to sell my soul a few times and was told it had already rotted.

Wed, 11/21/2012 - 17:40 | 3003338 Cognitive Dissonance
Cognitive Dissonance's picture

So THAT'S what's stinking up the Hedge.  :)

<Mrs. Cog insisted it was my dirty socks.>

Wed, 11/21/2012 - 19:17 | 3003494 quintago
quintago's picture

This was the pitchbook they prepared for HP. They just needed a meeting with Oracle so they can tell HP they were talking to Oracle. Having just lost Mark Hurd to Oracle, HP bit off Autonomy hook, line, and sinker. They got played hard.

The thing to learn with Oracle, is that they buy you, you don't sell to them when it comes to companies, and when it comes to dB software, they sell you, you don't buy their product.

HP is a effing joke. For the amount of money and debt they've spend/incurred on all their acquisitions they should be bigger than IBM. Instead, they've got a current ratio treading water just slightly above 1 and $30B in debt with a market cap of $23.5B.

Somebody better start sharpening the ginsu, because the Chinese are going to buy the PC and Printer business, PE firms will pick off the industrial print, VMW or EMC will pick off data center software, and in a ridiculous irony Oracle is going to pick off their enterprise unit and Mark Hurd is going to skip down highway 101 in his underwear until he gets to Palo Alto to moon HP on Page Mill Road.

Mark my words.

 

PS Why don't you look at how much money HP is spending on their headquarters facility in Palo Alto.....

Wed, 11/21/2012 - 21:07 | 3003584 notbot
notbot's picture

Quattrone is the Johnnie Cochran of investment banking

Wed, 11/21/2012 - 23:48 | 3003905 StychoKiller
StychoKiller's picture

Somehow, that doesn't seem like a good thing to me.

Thu, 11/22/2012 - 01:22 | 3003978 palmereldritch
palmereldritch's picture

 Three-card AutoMonte perhaps?

Wed, 11/21/2012 - 19:40 | 3003547 Eireann go Brach
Eireann go Brach's picture

Mike Lynch is Ben Bernanke's bastard child from a one night stand with Nancy Pelosi!

Wed, 11/21/2012 - 16:17 | 3003098 Relentless
Relentless's picture

Next up, Mike Lynch claims someone put Rohypnol in his drink

Wed, 11/21/2012 - 16:21 | 3003108 ebworthen
ebworthen's picture

Or admit he put it in Leo Apotheker's scotch.

Wed, 11/21/2012 - 16:17 | 3003100 ebworthen
ebworthen's picture

Snake Oil salesman claim to have never been in the town that the Sheriff kicked them out of.

Not that Oracle is that great, but they appear to not have been as dumb as HP.

$11 Billion?  Un-pucking-believable!

 

Wed, 11/21/2012 - 16:35 | 3003143 Skateboarder
Skateboarder's picture

"lively discussion about database technologies"... LOL!

Wed, 11/21/2012 - 22:09 | 3003783 jez
jez's picture

Yeah. "Lively discussion" . . . "database technologies" -- does not compute.

Wed, 11/21/2012 - 16:21 | 3003106 Bastiat
Bastiat's picture

I can't imagine where somebody would get they idea he could commit multi-billion dollar fraud and get away with it . . . jeez.

Wed, 11/21/2012 - 16:22 | 3003110 markar
markar's picture

Larry Ellison is nobody's fool and probably the smartest CEO in SV. And with more money than God, he didn't need to encumber Oracle with a bad acquisition to feather his nest.

Wed, 11/21/2012 - 17:34 | 3003114 fuu
fuu's picture

Best and brightest...

Wed, 11/21/2012 - 16:24 | 3003117 CVfriendship
CVfriendship's picture

To give Autonomy credit...they did pitch to Oracle on April Fool's day.

 

Everybody funny.

Wed, 11/21/2012 - 17:05 | 3003251 ZaphodBeeblebrox
ZaphodBeeblebrox's picture

Darn you beat me to it. :-)

Wed, 11/21/2012 - 16:26 | 3003121 Toolshed
Toolshed's picture

This level of stupidity is hard to accept with the individuals involved. Seems to me that some of the execs at HPQ MUST have had their palms greased in a major kinda way.

Wed, 11/21/2012 - 16:26 | 3003122 mayhem_korner
mayhem_korner's picture

 

 

Tyler...have you resurrected W. Mark Felt?

Wed, 11/21/2012 - 16:28 | 3003123 kalasend
kalasend's picture

So....Mark Hurd happened to be the one that showed Lynch the door. Can it get better than this?

Wed, 11/21/2012 - 16:31 | 3003133 azzhatter
azzhatter's picture

I'm not a tech expert but Ellison has not made many or maybe any bad acquisitions that I can think of. HP, on the other hand seems to be a punching bag for sellers.

Wed, 11/21/2012 - 16:32 | 3003139 mac_daddy
mac_daddy's picture

I work for HP/Autonomy Software and HP management didn't even figure it out until Autonomy's first qtr debacle which was to the tune of about 70% drop in revenue. Only then did they pull the curtain back and take a look.

Wed, 11/21/2012 - 16:35 | 3003146 realitybiter
realitybiter's picture

"and let me guess....I'm gonna go waaaaaay out there and make the following prediction:

no indictments, no trials, no convictions, and no clawbacks."

HP shareholders are a bunch of retarded pussies if they don't show up with pitchforks and torches.

I'd suggest going after Meg Whitman.  As much as I like her, she is likely the only person than can drive this through.  I doubt she is real interested in doing time for crooks like Lynch, Quatrone, and Apotheker.

Those guys should get torched and spend at LEAST 10 years in PMITA prison if they knowlingly misrepresented the financials.  Ditto for D and T.

Wed, 11/21/2012 - 16:49 | 3003194 Urban Redneck
Urban Redneck's picture

If Quattrone is involved there should least be a trial, for old time's sake...

(and to demonstrate that Eric the Bagholder isn't the Wall Street owned nigger his resume, with its lack of convictions, would imply)

Wed, 11/21/2012 - 16:51 | 3003202 Vegamma
Vegamma's picture

Wait, this is the same board that drove out the same Mark Hurd that determined in less than 30 mins that the same Autonomy was a piece of crap. RB, you are correct in that serious jail time is appropriate for this corporate theft...but I'm not holding my breath.

Wed, 11/21/2012 - 16:41 | 3003169 SmittyinLA
SmittyinLA's picture

I think Elllison bought his 8th house in Malibu last month, I want to be that guy. 

Wed, 11/21/2012 - 16:45 | 3003184 drivenZ
drivenZ's picture

holy shit, do you see that Gartner Magic Quadrant on p.7? #1 in "completeness of vision" AND "ability to execute"? 

 

lets just skip the QOE, where do I sign? 

Wed, 11/21/2012 - 17:06 | 3003256 knukles
knukles's picture

The completeness of vision thing has to do with not squinting too hard when waking off to the finagled numbers too much?

OK! Whose got the hair on their palms?

Wed, 11/21/2012 - 17:32 | 3003324 Whiner
Whiner's picture

The seller will try and rely on lack of reps and warranties, that Meg's boys signed off with an independent audit.

Wed, 11/21/2012 - 17:38 | 3003337 rosethorn
rosethorn's picture

Thanks for posting this...maybe some kids in grad school can perhaps learn something.

Wed, 11/21/2012 - 17:40 | 3003342 SoundMoney45
SoundMoney45's picture

One cannot blame Quattrone for trying.  However, after Palm and Autonomy, the HP board should resign.  

"Fools and their money are soon parted", although in this case, perhaps "Fools and other peoples money are soon parted" is more appropriate.

Wed, 11/21/2012 - 17:47 | 3003356 n2dark
n2dark's picture

Oracle.com/PleaseBuyAutonomy

lol  ...And btw, you can't pull these oversized bellinis all by yourself. Obviously a few key HP employees lent a hand to help make this one of the largest corporate heists known so far.

Wed, 11/21/2012 - 18:48 | 3003467 buzzsaw99
buzzsaw99's picture

Oracle thought $6B was too high but then HPQ paid twice that? Give the HPQ execs another bonus!

Wed, 11/21/2012 - 19:08 | 3003487 Satan
Satan's picture

Am I the only guy thinking that Frank is perhaps the greatest salesman in the Valley? Dammit he sold Palm to HP! Autonomy must have been a cakewalk, even at triple it's value...

Wed, 11/21/2012 - 19:15 | 3003499 Dineroguru
Dineroguru's picture

I guess not even Famous Frank can out snake a couple of BIG snakes like Larry and Mark Turd....I mean Hurd...

 

Wed, 11/21/2012 - 20:03 | 3003585 Quantum Nucleonics
Quantum Nucleonics's picture

The only thing bigger than Larry's net worth is his ego, but he is a smart, savvy guy.

Wed, 11/21/2012 - 21:04 | 3003691 Never One Roach
Never One Roach's picture

If the first Sucker walks away, try, try again.

Thu, 11/22/2012 - 01:41 | 3004010 palmereldritch
palmereldritch's picture

The great thing about the HP Board is that collectively (or, by extension, one must then surmise...as individuals or a majority therein...) they have NEVER sat at the poker table, looked around and even had an inkling that possibly THEY were the sucker...

http://www.youtube.com/watch?v=ciWBzhmOC_o

 

Thu, 11/22/2012 - 02:04 | 3004024 fishwharf
fishwharf's picture

I'm boycotting HP until they get rid of Meg Whitman.  I'm still traumatized from her brutal political campaign for Governor of California.  For months I couldn't turn my television on without seeing her ugly face. Thank goodness she lost.  Well, Jerry is doing a good job as Governor and Meg is in the process of hammering the last few nails into the coffin of a once proud company.

Thu, 11/22/2012 - 04:23 | 3004093 Shevva
Shevva's picture

They flashed her mug across the UK tv screens last night, she looks like a pitbull chewing a thistle.

Thu, 11/22/2012 - 19:59 | 3005332 malek
malek's picture

Are you feeling lucky with Gov. Brown?

Thu, 11/22/2012 - 04:09 | 3004087 dough eating squid
dough eating squid's picture

They have a customer reference from the Serious Fraud Office :-|

Do NOT follow this link or you will be banned from the site!