Chapter 67: The cost of ownership

Damian had learned one thing about buying a company.

Every time he thought he understood the situation, somebody handed him another document.

By Tuesday morning, his acquisition folder had grown from a few spreadsheets and financial statements into something that made his laptop fan sound like it was fighting for its life.

He stared at the latest email from Maya.

Subject: Preliminary Review of Rachel Morgan Agreement

The message was short.

The implications weren’t.

Several provisions in the original agreement required further legal interpretation. Until the lawyers finished reviewing them, nobody could confirm whether Meridian had sufficient rights to continue developing and commercializing its core software without Rachel’s involvement.

Damian read the email twice.

Then he called Maya.

"Please tell me there’s some good news."

"There is."

"Go on."

"We’ve identified the problem before you bought the company."

Damian leaned back.

"That’s your good news?"

"It’s better than identifying it after you’ve paid two million dollars."

"Fair enough."

Maya continued, "The attorney wants the original agreement, every amendment, and the documents relating to Rachel’s departure. We also need to know whether Northstar’s investment agreements refer to the same intellectual property."

"Can we get all of that?"

"From Michael, probably. Whether he’ll be happy about giving it to us is another question."

Damian glanced at the message he’d received the previous evening.

Michael had asked whether he’d made a decision about the offer.

"Send him the request."

"I already have."

"Of course you do."

Maya laughed.

"Try to keep up, Damian."

The call ended.

He closed the email and opened his notes.

Outstanding issues:

Ownership of the original software architecture.Rachel’s retained rights.Northstar’s approval rights.Customer concentration.Existing debt and recurring expenses.Final purchase price.

He stared at the list.

The two-million-dollar question was becoming a two-million-dollar headache.

Still, he wasn’t ready to walk away.

Not yet.

He wanted to know what the company was actually worth before deciding whether it was worth owning.

Michael Reeves looked tired when Damian arrived at the Meridian office that afternoon.

He was sitting behind his desk, reading a document. Two empty coffee cups stood near his keyboard.

"Damian. Come in."

Damian took the offered seat.

"Thanks."

Michael set the document aside.

"I received your request for additional information."

"Good."

"That’s quite a list."

"I know."

Michael rubbed his forehead.

"Some of those documents are old. I’ll have to check with our accountant."

"That’s fine."

"And the Rachel situation is complicated."

"I gathered that."

Michael looked at him.

"She told you about the agreement?"

"Yes."

A pause followed.

"What exactly did she say?"

"That she retained rights to parts of the original architecture."

Michael leaned back.

"That’s technically true."

Damian waited.

"She left years ago," Michael continued. "The company has continued operating since then. We’ve served hundreds of customers. We’ve developed new features and maintained the platform."

"I understand that."

"So the situation isn’t as alarming as it sounds."

"Maybe."

Michael frowned.

"Maybe?"

"Michael, I’m not saying the company can’t be sold. I’m saying I need to know what I’m buying."

"You’ve seen the financials."

"I have."

"The customer base is stable. The revenue is recurring. We have an established product."

"And a licensing agreement that might affect the product."

Michael’s mouth tightened.

"Rachel has never tried to interfere with the company."

"That doesn’t answer the question."

For a few seconds, neither spoke.

Damian hadn’t intended to sound confrontational. He simply wasn’t going to spend millions of dollars based on assurances that couldn’t be verified.

Michael picked up his coffee, discovered it was empty, and put it down again.

"What do you want from me?"

"Everything related to the agreement. The original documents, amendments, correspondence about the transfer of her shares, and any legal advice the company has received about her rights."

"Some of that is confidential."

"Then your lawyer can determine what can be shared and under what conditions."

Michael studied him.

"You’ve thought this through."

"I’m trying to."

The older man gave a tired smile.

"You’re making this harder than it needs to be."

"Maybe. But I’m the one considering paying $2.1 million."

Michael looked away.

Damian continued.

"If the documents show the company owns what it says it owns, great. We move forward. If there are restrictions, we figure out what they mean. If the deal doesn’t make sense after that, I walk away."

"You’d really abandon the deal over this?"

"Yes."

The answer came out more quickly than Damian expected.

Michael noticed.

He slowly nodded.

"All right. I’ll speak with the lawyers."

"Thank you."

Damian stood.

As he reached the door, Michael spoke again.

"For what it’s worth, I never intended to mislead you."

Damian turned.

"I hope that’s true."

He left without saying anything else.

Outside the building, Damian called Daniel Hart.

Daniel answered on the fourth ring.

"Damian. Everything all right?"

"I’m not sure."

"That usually means no."

Damian explained what he’d learned about Rachel and the agreement.

Daniel listened without interrupting.

When Damian finished, Daniel asked, "Have you paid anything?"

"No."

"Good."

"That’s all you have to say?"

"What else do you want me to say?"

"Something encouraging."

Daniel laughed.

"You haven’t bought a company yet. You’re investigating one. There’s a difference."

Damian walked toward his car.

"Michael thinks I’m making the deal unnecessarily complicated."

"Of course he does. He wants to sell."

"That’s not exactly reassuring."

"Look, Damian. You don’t have to convince Michael that you’re a good buyer. You have to decide whether his company is a good investment for you."

Damian stopped beside the car.

"That’s what I’m trying to do."

"Then keep doing it."

Daniel paused.

"And don’t let the time you’ve already spent on this influence your decision. If the deal is bad, walking away is cheaper than being stubborn."

Damian smiled.

"You’ve been waiting to tell me that, haven’t you?"

"Since you first mentioned buying a company."

"Thanks, sir."

"You’re welcome. Now go eat something. You sound hungry."

Damian looked at his phone.

"How did you—"

"Because you always sound irritated when you’re hungry."

The call ended.

Damian laughed as he got into the car.

That evening, Ethan found him sitting outside a café near campus.

"You look terrible."

"Thank you."

"Anytime."

Ethan dropped into the opposite chair and stole one of Damian’s fries.

"So, what’s wrong?"

"Acquisition."

Ethan chewed.

"That company you’re buying?"

"Trying to buy."

"What’s the difference?"

"One of them means I own a company. The other means I own a folder full of problems."

Ethan nodded seriously.

"Sounds expensive."

"It is."

"How expensive?"

Damian gave him a look.

"Don’t start."

"I’m just asking."

"You’re always just asking."

Ethan grinned and reached for another fry.

Damian moved the plate out of reach.

"Get your own."

"You’re a millionaire."

"And you’re annoying."

"Both can be true."

Damian laughed despite himself.

For a while, they talked about classes and an upcoming football match. Ethan complained about a group assignment, Damian offered an unhelpful suggestion, and Ethan threatened to stop inviting him anywhere.

It was ordinary.

Damian appreciated that more than he expected.

Eventually, Ethan leaned back.

"So, are you going to buy the company or not?"

"I don’t know yet."

"Then don’t buy it."

Damian stared at him.

"That’s your advice?"

"Yeah."

"Brilliant."

Ethan shrugged.

"If you’re not sure, wait until you’re sure."

Damian considered that.

"You make everything sound easy."

"Because you’re the one making it complicated."

"There’s a legal issue with the software."

"Then fix the legal issue."

"What if it can’t be fixed?"

"Then don’t buy it."

Damian opened his mouth.

Closed it.

Ethan pointed at him.

"Exactly."

"You’re irritating."

"Yet you keep paying for my food."

"One day, I’ll stop."

"Then I’ll know you’ve gone broke again."

They both laughed.

Later that night, Damian returned to his apartment and opened the acquisition folder.

A new message from Maya was waiting.

The intellectual property attorney had reviewed the preliminary documents.

The initial assessment was cautious. The agreement might be manageable, but the company would need to establish exactly which rights it possessed and whether Rachel’s consent was required for future development or a change in ownership.

No final conclusion yet.

Damian read the email, then opened his financial spreadsheet.

The proposed purchase price remained $2.1 million.

His liquid balance remained $5,099,924.32.

He had enough money to make the purchase.

That wasn’t the same as having enough information to justify it.

He closed the spreadsheet.

The golden System screen appeared above his desk.

[MAJOR CAPITAL ALLOCATION: UNDER REVIEW.]

Damian glanced at it.

"Still working on it."

The screen remained unchanged.

He looked back at his notes.

There were plenty of reasons to like Meridian. Hundreds of customers. Recurring revenue. A product people relied on. Room for improvement.

But there were also reasons to hesitate.

He didn’t know the full cost of fixing the infrastructure. He didn’t know whether the biggest customer would renew. He didn’t know the extent of Rachel’s rights.

And he still hadn’t resolved Northstar’s position.

Damian opened a new document and typed a heading.

Conditions Before Purchase

Underneath it, he wrote three requirements.

First, independent legal confirmation of the software rights.

Second, a full review of Northstar’s agreements and approval requirements.

Third, a realistic assessment of the money needed to modernize the platform and retain its customers.

He read the list.

Then added a fourth.

Rachel Morgan must be part of the discussion if her rights affect the deal.

Damian saved the document.

He wasn’t going to buy Meridian because he’d already spent weeks investigating it.

He wasn’t going to buy it because the idea of owning a company sounded exciting.

And he certainly wasn’t going to let the possibility of losing a good opportunity push him into a bad decision.

If Meridian was worth buying, the evidence would support it.

If it wasn’t, he’d find something else.

His phone buzzed.

Ethan:

Football tomorrow. Don’t come with another excuse.

Damian smiled.

Damian:

I’ll be there.

Ethan:

Good. And bring money.

Damian:

For what?

Ethan:

Food, obviously.

Damian shook his head and put the phone down.

For once, he had a decision to make that couldn’t be solved by spending more money.

He needed patience, good advice, and the willingness to walk away.

Tomorrow, he’d see what the documents revealed.

For now, Meridian could wait.