“It should be an interesting day.”
“I can’t wait to see Wright’s face when we turn up.”
Chapter Nineteen
Kent and Kirkland had one of the firm’s drivers take them down from Cambridge to Henderson Wright’s offices on the North Colonnade at Canary Wharf, a few miles east of the City of London. It was only a sixty-mile drive and so much easier than taking the train to London; getting out to Canary Wharf from the City was a pain in the neck as far as Kent was concerned.
They were early, so they walked from the car park over to the office building — fifty-two floors of concrete and steel. It reminded Kent why he’d chosen to locate CBC in Cambridge. That city has real character, not like these plastic-looking skyscrapers — modern-day factories with no character or sense of permanence. He stared at the hundreds of people going to work, and was reminded of ants running backward and forward into the various tower blocks.
They joined the line for the security desk; another thing he detested about these buildings. It always took ages to get through the security procedures and up to the meeting floor. Worse than some airports.
“You don’t know how much I’m looking forward to seeing our friend,” said Kirkland, finding it difficult to suppress her smile.
“Me, too,” said Kent.
They made their way up to the meeting room level on the fiftieth floor and announced themselves to the receptionist. “We’re from Tritona for Mr. Wright,” said Kent, winking at Kirkland.
“Mr. Wright’s PA will be here to collect you in a few moments. Please take a seat,” she said, pointing over to the waiting area.
What an absolute jerk, Kent thought. Wright’s soon-to-be eighty percent owners have just arrived and, rather than collect them himself, he expects us to wait while a PA comes along. The man’s a fool.
They waited five minutes, compelled to listen to the oversize flat-screen televisions in the waiting area. Kent had noticed many large professional services firms installing televisions in their reception areas in recent years. Why this was supposed to enhance the visitor’s first impression of the firm was beyond him.
“If I ever suggest putting in one of those bloody screens at CBC, you have permission to shoot me,” he said, smiling at Kirkland.
“Mr. Wright will see you now,” said the officious young woman who came to collect them.
Does she think Wright is doing us the favor? Kent thought.
They followed her through to an enormous meeting room. It was filled with lawyers and representatives from Henderson Wright’s banks. Kent estimated there were fifty-five to sixty people in the room, running about, shuffling papers. Wright was holding court in the middle of the crowd, full of his own self-importance.
“You’d hardly suspect this is the same man who’s brought his firm to the brink of collapse,” whispered Kent into Kirkland’s ear.
“What the hell are you doing here?” shouted Wright across the room when he saw Kent. The room fell silent. Kent could see he was struggling to process the situation.
“We’re here to complete the deal, of course,” Kent said to the silent audience.
“You’re mistaken. We’re doing the deal with Tritona,” said Wright.
“We manage Tritona’s private equity investments.” That was true, but Wright didn’t need to know this was the first deal to be managed on Tritona’s behalf. “Did no one tell you?”
“Over my dead body!” Wright’s face reddened. “There’s no way I’m going to sign this deal if CBC effectively controls eighty per cent of Henderson Wright. The deal’s off.” He looked across at a group of senior bankers. They did not jump to his support.
Kent shrugged his shoulders. “Then we’ll have to leave.” He put his papers back into his briefcase and walked toward the exit.
“Please. Can we persuade you to stay for a moment?” said one of the senior bankers sat at the conference table. “We represent most of the banking lines extended to Henderson Wright. If this deal doesn’t happen today, then early next week we’ll be appointing an administrative receiver to sell off this firm bit by bit.” He turned to Wright. “Is that what you want, Doug? You’ll be spelling the end of Henderson Wright.”
All eyes focused on Wright. “I will not work with CBC. It’s that simple,” said Wright.
This confirmed what Kent already knew. Henderson Wright was up against the wall with no real choice but to do this deal. He knew he could not work with Wright. He was too much of a hothead, who managed by the seat of his pants. After all, it was Wright’s decision to do the German deal with insufficient non-compete protection that caused all of this mess in the first place. Wright was an expendable commodity, and this was Kent’s chance to remove him. What he didn’t want to happen now was for the banker to persuade Wright to work with CBC for the sake of the deal.
“Our position has changed,” Kent announced to the room. “We will only complete this deal if Mr. Wright is no longer part of it. After all, he’s made it abundantly clear he won’t work with us as controlling shareholder. That’s obviously an untenable position.”
“Could you please let us have a few minutes, Mr. Kent?” asked the senior banker.
“Of course. Joanna and I will go out for a coffee. We’ll be back in half an hour.”
Kent and Kirkland went down to the ground floor, where they found a big-brand coffee retailing concession that took up most of that level. “This will be one of the first things to go,” he said, looking round at all the wasted space. “I counted three coffee shops in the two hundred yards we walked from the car park. I cannot understand why they need to waste a whole floor of this building on another.”
“Do you think Wright will fall on his sword?” asked Kirkland.
“I’m certain of it. It’s really a decision for the banks at this stage, anyway. They’re calling the shots. They’ll be up there now squeezing him hard. He has nowhere else to go. He will say he resigned, but he’s just been fired.”
They finished their coffee and returned to the meeting room. Wright was no longer there.
“Mr. Wright has decided to step down from the firm as senior partner with immediate effect,” said the banker. “I trust this will now allow us to proceed?”
“Just one more thing,” said Kent.
“What’s that?”
“Our equity stake has gone up from eighty percent to eighty-five.” The papers Kent had read overnight said that Wright was going to have five percent of the equity, with the other senior partners sharing the remaining fifteen percent. At a stroke, he’d increased the attraction of the deal for Tritona without taking away anything from the remaining senior partners, with whom he would have to work. Indeed, Kent thought the other partners were likely to be delighted with Wright’s departure.
“Very well. Let’s get this deal done,” said the banker.
Chapter Twenty
The spring and early summer months were busy for the team at CBC. Since completing the Henderson Wright deal, the firm had been flooded with new deal inquiries. That transaction raised CBC’s profile and proved that the firm was back in business. The market’s reaction to CBC’s new, expanded checkbook was phenomenal. Kent was back on the map and now regarded as a major player, with investment banks bringing him ever-larger deals. The recession was throwing up more and more great deals, and his team could pick and choose the transactions they wanted. In the space of just three months, they’d completed twelve buyout transactions across the globe, investing ten billion pounds of the twenty billion pound new fund. They were making a lot of money for Tritona and themselves. Kent was like a dog with two dicks, strutting around the investment market.
Baumgart was delighted with the way he’d sweetened the Henderson Wright deal at the last moment. On top of this, the accounting firm was hitting all of its numbers and was flourishing under the new CEO Kent had appointed after firing Wright. Baumgart demonstrated his absolute confidence in CBC’s judgment by coinvesting in every one of their deals, mo
ving a further eighteen billion pounds of Tritona’s monies, in addition to the amounts invested via the CBC fund.
In late June, Baumgart asked Kent to join him in Geneva for a general catch-up meeting and dinner. Kent traveled alone this time. The last thing he wanted was a repeat of the hotel episode. To Tara’s credit, she’d never mentioned it and had been a complete professional. Nothing really happened.
“Great to see you, John,” said Baumgart as he met Kent in Tritona’s reception area. “Where’s Tara? Is she not with you on this trip?”
“Sadly, she wasn’t able to make it, but she looks forward to seeing you when you’re next in the UK,” said Kent, thinking on his feet. Tara never mentioned Baumgart, but he didn’t want to disappoint his main investor. He knew Baumgart was besotted with her.
“That is disappointing. Maybe next time.” They walked through to Baumgart’s office. Kulpman was already taking notes.
What the hell do they do with these notes? Kent wondered. Maybe it’s Kulpman’s way of justifying his sad existence.
Kent ran through his presentation on CBC’s investment activity. Then he compared the actual financial performance of each acquired company with the projections for each one compiled by CBC when the deal was completed. Every company in the rapidly growing portfolio was trading on or above target. The early indicators were this was going to be a superb fund, vindicating Kent’s judgment that having plenty of investment firepower in a downturn was the route to great returns.
“I’ve been keeping our investors up to date with your performance at CBC. They’re very pleased,” said Baumgart.
“That’s good to hear. We’ve been working hard to put away some great deals for you. Our aim now is to keep up the momentum. Having bought well, we need to be good owners of each company so we make the most of each investment. We want the best exit price when we come to sell them.”
“That’s one of the reasons I wanted this meeting. You know we manage a number of different assets from these offices. Before we came into the CBC fund, we made a small number of direct private equity investments of our own. Since then, we’ve made many more direct investments as the market conditions have been right.”
“You’ve been busy, Dieter.” Kent had no idea Tritona had still been investing in other private equity deals on their own in addition to the monies they’d been putting to work through CBC. How much money do these people have?
“We see this as the right time to be making new investments while acquisition prices are low.”
“I couldn’t agree more. In years to come, we’ll look back at this time and see it as a golden buying opportunity.”
Baumgart was a kindred spirit as far as investment timing was concerned. It had always baffled Kent how most investors reduced their investment rate during recessions and increased it again in the boom times. A savvy investor would do the opposite, buying cheaply in downturns and selling high in upturns. He couldn’t understand why most investors didn’t get this. Baumgart was an exception.
“We’ve been very impressed with your handling of Henderson Wright. That would have been another one within our direct portfolio, had you not been able to take on its management for us.”
“We were delighted to help out on that one.” Kent meant it. Not only did he enjoy completing a good deal, but also he’d taken great pleasure in removing Wright. That was a real bonus.
“As you can imagine, these direct investments take up a lot of our management time, and we’re not really set up to do this properly, attending monthly board meetings, dealing with consent matters and so on.”
“I know how much time they take up. More than people imagine if the job is being done properly.” Where’s Baumgart going with this?
“We’d like to hand over the management of all our existing direct investments to the team at CBC. We know you’re best placed to extract maximum value out of these companies on our behalf.”
“That’s great news.” More money.
“Of course, CBC would receive the usual monitoring fee income and some form of performance-related reward linked to the increase in their value under your stewardship.”
“How many companies are we talking about?”
“Currently, we own sixty-five companies directly, with a combined investment cost of almost two hundred billion dollars.”
That’s an incredible portfolio, Kent thought. Taking it on would more than quadruple CBC’s assets. The carried interest and monitoring fee income on the investments would be enormous. His team would have to expand; maybe even move into larger offices to accommodate the extra staff. This achieves ten years’ growth for CBC in a single move.
“We’d be delighted to take on this portfolio for Tritona. With such a large number of investments, there’d need to be a transition period while we expanded our team, but this needn’t take long. I’m sure we can handle it.”
God knows where we’re going to find enough good people quickly.
“I’ve already given this some thought, as you can imagine. The most effective way to deal with this is for CBC to acquire Oakham Fiduciary Services, which handles much of our group structuring and the administration of our holdings. You dealt with them briefly on the Henderson Wright deal. They could take over much of the additional admin work. In this way, CBC could continue to focus on what it does well, leaving the routine administration to Oakham.”
“That makes sense. They came across to us as good people, but is Oakham for sale and would the team be happy to join CBC?”
“There’s no problem with Oakham. Tritona acquired that business last month. We’ll simply transfer it to CBC. We can discuss the details over dinner this evening. I have another good restaurant to show you.”
On the flight back to London the following morning, Kent pondered the events of the previous day. He thought how fine the line was between business success and failure. Just a few months earlier, he’d been facing the very real prospect of losing his business and having to let his staff go. Now, he was the CEO of what was about to become the largest private equity firm in the world. With the certainty that Tritona would invest as much as he could ever need, there was no deal too large for him to consider. He’d be able to go hunting for targets among the largest companies on the planet.
Kent smiled as he gazed out of the plane’s window. This would be a poke in the eye for all of CBC’s competitors and those who’d written him off after the Grampian disaster. Now he’d show them all how wrong they’d been underestimating him. He was about to become a truly global player and, just as important, he was on his way to becoming a billionaire. Of that, he was certain. He could taste it.
Chapter Twenty-One
The jet landed at Biggs Army Airfield, a few miles north of El Paso International Airport. Dressed in a black suit, Merriman felt the intense heat the moment he left the aircraft. Halloran and Camplejohn came down the steps behind him. A black SUV drove up to within fifty feet of the jet, and the three of them climbed in. There was little conversation for the one-hour drive north to Las Cruces in New Mexico.
Merriman gazed out of the window as the car turned into a street off University Park. The houses were all single story with parched, brown lawns and pickup trucks parked on some of the drives. A small Catholic church sat at the end of the street, next door to a two-story motel that had seen better days. The paintwork on the white wooden balcony running along the length of the upper floor was peeling, and the driver had to take care to avoid the potholes as he pulled up in the motel car park. Merriman and his two colleagues walked across to the church. They joined the back of the line of people filing in. The place was packed with more than one hundred worshippers. Merriman’s team stood out as the only white faces in a crowd of Hispanics as they made their way to the few remaining seats at the back.
It had been three months since they’d learned of the death of Special Agent Luis Santiago, who’d been known as Arturo Vargas when working undercover. Since receiving the package of body parts on M
erriman’s birthday, there had been no further contact with the agent. Merriman’s other undercover agents had learned through their networks that Vargas had been killed shortly after he transferred from Corolla Currency Exchange in Monterrey. None of them had actually seen a body, but the intelligence was clear. He’d been killed by the cartel. Merriman needed no further proof; the diamond stud earring in the bloodied ear had been the Caruana cartel’s way of showing him they knew who he was. There was no information on how he’d been compromised.
The memorial service lasted an hour. Santiago’s father spoke about the family’s move from Mexico before Luis was born and how he and his wife were so proud when their American son graduated from college. He recalled how excited Luis had been when he won a place at the DEA’s Intelligence Center in El Paso. They’d watched his career develop with such pride.
Merriman spoke of the important work their son had been involved in, and how he was much respected by his colleagues. Luis had been a rising star, and would be missed by all who knew him. He was one of the best. He meant every word. Merriman felt a strong sense of personal responsibility for Santiago’s death. He’d trained him and assured him he was ready for the difficult and risky challenge of working undercover. Too many good people had paid a heavy price in the war against drugs.
“I promise you, your son’s life was given for a noble cause. His sacrifice will not have been for nothing. I will do everything in my power to finish his important work,” said Merriman before leaving the podium.
As he walked back to his seat, he made eye contact with Mr. Santiago. Merriman knew his words would never make up for the loss of his son. He promised himself he would not stop until he’d seized all of the cartel’s assets and wiped them from the face of the earth. That would be the way he’d honor Luis and the others who’d made the ultimate sacrifice.
Merriman and his two colleagues stayed for an hour at the Santiagos’ home after the service. It was difficult to share in any detail the work their son had been doing. They seemed to understand; they told Merriman they knew Luis was involved in sensitive work. Merriman found it hard to explain why there had been no body. He did his best to strike a balance between telling them enough without compromising security, but he found it challenging. As he talked to Mrs. Santiago, he could tell she was hanging onto a slim hope that Luis would return one day. She kept telling him that because there was no body, there was no certainty her son was dead. He had to tell her he was certain Luis was not coming back, but he hated himself for removing her last shred of hope.
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