Wake Up and Smell the New M&A Imperative


 

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 Silhouette

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. An entrepreneur and industry veteran since 1991, Aaron founded Paladin fs, LLC in 2007 and launched Golden Contract Coalition in 2016. His invention of the Paladin Blue Book has leveled the playing field in contract negotiations vs. national Core & IT suppliers, gaining his clients more than $300M in cost reduction and $100M in merger value accretion. In 2018 Silva expanded Paladin to include the Fintech Advantage division, now addressing the anticipated adoption of fintech services within the industry. By the end of 2019, the GCC will have more than $1B in combined contract value - the largest banking association focused exclusively on developing a fair "Golden" contract standard that all Core, IT and Fintech suppliers will ultimately adopt in order to do business with this industry.