Speaking with Outstanding Investor Digest in 2009, former Fairholme Capital Management President Charles M. Fernandez detailed his shareholder revenue–focused investment, acquisition, and restructuring approach. In particular, Charles M. Fernandez emphasized the need to undertake detailed research and analysis in every transaction undertaken.
The reason for this intense M&A scrutiny is that business acquisitions not only need to generate significant revenue to pay off debts, but also need to cover debt incurred during the acquisition process itself. Any major M&A process naturally requires extensive (and expensive) coordination with attorneys, regulators, lobbyists, and other stakeholders. In the pharmaceutical sector, Mr. Fernandez described a complex and time-consuming process of collaborating with leading Washington, D.C., lawyers experienced in lobbying Congress on behalf of the top pharmaceutical companies. He also typically hired consultants with detailed regulatory and law enforcement experience. These experts helped him to understand complex issues regarding government agency investigations, as well as relevant legal issues.
Charles M. Fernandez’s detail-oriented approach has paid dividends, with a sustained M&A strategy with Ivax Corporation over a seven-year period, transforming a small generics company into a major $10 billion international operation.