M&A Core IT Contract Negotiations:
Why Planning Ahead Pays Off Big League
Mergers will continue to be a viable strategy as a way to grow — or, in some cases, just to survive. No matter which side of the transaction your franchise may be, Core & IT contracts will impact the deal cost, accretive value, and shareholder benefit. Unfortunately for shareholders nationwide, Core & IT Suppliers will profit by hundreds of millions of dollars each year for services they will never provide as a result of onerous and one-sided termination, conversion and de-conversion expenses embedded unfairly in 2” inch thick, complex IT contracts.
A common mistake made by bank executives is to postpone negotiations with core IT suppliers until a merger has been announced, only to learn all leverage over them has evaporated. Contrary to this popular misstep, restructuring contracts in advance of any M&A deal can make all the difference in profitability, franchise value and shareholder protection.
Many banks depend on their investment bankers or general counsel to handle these contracts only to learn they are either under experienced in this type of deal-making or lack the financial incentive to be vested in changing the results. When banking executives proactively take control of their core relationships and become fully aware of their M&A opportunities, it can add up to monumental savings in operating costs and separation expenses while providing better accretive deal value.
In this session, Aaron Silva will outline the specific steps and strategies banks can follow to implement more profitable and merger-friendly agreements. The presentation will also dispel the notions that Core and IT service providers, such as Fiserv, Fidelity and Jack Henry, are unwilling to partner in banks’ successes, even if a merger could mean the cessation of their services.
AARON SILVA, PRESIDENT & CEO OF PALADIN fs AND GOLDEN CONTRACT COALITION
Mr. Silva is a recognized and respected industry leader and negotiations expert standing
for community financial institutions against the powerful oligopoly of Core & IT suppliers. After spending 15 years selling IT services to bankers across the country, Silva recognized that bankers lacked real market intelligence and pricing data necessary to enter these one-on-one negotiations intelligently. This realization served as the catalyst for founding Paladin fs and the Paladin Blue Book in 2007. With more than 100 successful transactions and $135 million in cost reduction since Paladin’s inception - Silva realized the industry still needed a counter-balance to the oligopoly formed by “The Big Three”. In June 2016, Silva launched the Golden Contract Coalition with the unprecedented goal of aggregating large numbers of banks and $1B in combined contract revenue - manufacturing the leverage necessary to put the power back into the hands of community financial institutions and once and for all disrupt the major suppliers’ business models of one-sided, over-priced, and unfair deals.
Silva is a sought-after, entertaining and accomplished speaker for national banking and credit union events as well as an influential writer and industry-wide resource on both strategic and technology issues facing executive leaders of franchises under $15 Billion. Continually receiving the highest reviews from session attendees, he is an energetic, engaging and thought-provoking professional speaker that will add great value to your event. In addition to his professional accomplishments, his research has been the foundation for highly regarded studies on pricing disparities, hidden costs and defective terms in supplier contracts, developed by the Business Performance Innovation Network and other market analysts.