Raymond J. McGuire maintains his cool despite the billions of dollars on the table. Even the slightest miscalculation could be disastrous, but that doesn’t faze him. Like a chess grandmaster, he’s planned ahead for every contingency with a meticulousness that would make Garry Kasparov envious.
At stake: the $21 billion buyout of wood and paper processor Georgia-Pacific Corp. by privately held Koch Industries Inc. Wichita, Kansas-based Koch is offering $48 per share to Georgia-Pacific stockholders for a total of about $13.2 billion in cash. The remainder of the deal’s value is Georgia-Pacific debt, which Koch will assume. Citigroup Inc. was retained as Koch’s sole financial advisers, and McGuire, who was appointed managing director and co-head of global investment banking in July 2005, is leading the investment banking team.
McGuire firmly believes the marketplace undervalued Georgia-Pacific and that the buyout price represents a premium of nearly 40% of its stock — a handsome profit for Georgia-Pacific shareholders that should cement the deal. Having an M.B.A. and a law degree from Harvard, he quickly grasps the potential legal and antitrust challenges, allowing him to head off any potential legal pitfalls.
While this transaction marks a milestone as one of the largest such deals headed by an African American, McGuire is simply elated that the deal (completed in 2005) went down without a hitch. After all, he followed his own advice about the way to get what you want from a negotiation: “One, is to be completely prepared. Two, is to anticipate each potential tactical move. Three, assume that the people on the other side of the table are equally as smart. Four, keep perspective. And five, recognize there’s no margin for error.”
McGuire is a perfectionist, no doubt. As an investment banker who’s managed to not only stay in the game but play at its highest levels, anything less than perfection is unacceptable. William M. Lewis Jr. knows this too. As managing director and co-chair of investment banking for Lazard, Freres & Co. L.L.C., an international financial advisory and asset management firm with $88 billion in assets, Lewis has his own share of blockbuster deals. Lewis made his mark in 1989 with his achievement of two simultaneous firsts — becoming the first black partner at Morgan Stanley and accomplishing that feat in seven years — the fastest promotion to partner ever at a financial services firm.
At Morgan Stanley, Lewis’ department accounted for more than $2 billion in revenues. Over the span of his career, his deals include the $720 million acquisition of Envirodyne Industries Inc. by Emerald Acquisition Corp. in 1989, the $355 million sale of Moog Automotive to Cooper Industries in 1992, and the $1.79 billion sale of Maytag to Whirlpool in 2005.
Lewis moved over to Lazard in 2004, where he was named managing director and co-chairman of investment banking. It wouldn’t take long before he made a name for himself. In 2005, mergers and acquisitions revenues at Lazard increased by 40% to $674.5 million.
Interestingly enough, the two have been friends for more than 30 years, having