Palette Life Sciences: Financial and Transactional Insight on Their $600M+ Exit With Teleflex | LSI USA ‘24

Henry Peck  0:04  
Thank you, everybody. And thank you to the panelists for joining me today very excited about this one, not a not every day, we get the chance to talk about such a strong exit in the space and thrilled to have the executive team as well as the financial advisor on the deal. Here to speak to it. I'll have the panelists introduce themselves as we get going here. But first Pearl go over to you to just tell us a little bit about palette, the technology and the problem that we're solving. Sure.

Per Langoe  0:27  
So my name is Per Langoe, I was the chief executive officer for pallet, I was also one of the co founders for the company. So palate was all about improving quality of life for men, children and women, that suffers from certain diseases. And we did that through the commercialization of minimally invasive treatment options. And as you heard during the introduction, barrier gel was one of them, which was also one of the key reasons why we were acquired by Teleflex.

Henry Peck  1:00  
Fantastic. So bring us up to speed James on the journey that led up to this exit first talk about some of the equity and debt financing history and introduce yourself as well.

James Leech  1:10  
Sure. Hi, everyone. I'm James    Leech, I was the Chief Business Officer of pallet part of the founding team with pair, we had a pretty non traditional start at pallet, we plugged the license rights that we had acquired into basically a royalty shell of an investment firm that was going to back us from the outset. That was a large Swedish pension fund. In the early days, it was actually pretty tough for us to raise capital, we had a lot of risks on the table, right? We had clinical and regulatory risk, we had commercial risk, and we had some IP risk as well. Ultimately, we did a $30 million equity raise in 2020, from a pretty non traditional set of investors, mostly Nordic based, the anchor in that round was a large Swedish family office. And that propelled us well through our clearance of Barrett gel, which is Paramedicine was our real growth catalyst for the business. We also did some some debt financing. So we had a facility with Silicon Valley Bank that was around 25 million. And then we did a refinancing and upsizing that facility for 50 million with orba. Med in March of last year. It was at that point that we were also considering raising substantial additional equity to take the business to the next level commercially, and from a revenue standpoint. And that was when things started to capitalize on the exit front as well. And

Henry Peck  2:31  
we'll get into kind of that inflection point decision making process on the financing side. Neil want to go over to you to introduce yourself as well and talk a little bit about the process that a company goes through and that you go through and identifying and partnering with the right financial advisor.

Neil Oberoi  2:46  
Sure. Thanks, Henry. And thanks for having me. I'm Neil Oberoi. I'm a medical device banker. With Guggenheim Securities, I spent all my time on medical device m&a, I've been doing it now for over over 20 years. And part of our our job as bankers and as advisors is building relationships with folks like yourselves, companies are all stages of development of getting to know companies early, building a trusted advisor relationship, if and when there's a time to transact, or if and when their strategic dialogue and you need our formal advice, we tend to get involved and we we compete in a highly competitive business with other firms and other bankers. In some cases, like this one, we get lucky. So we hadn't, we didn't have a dialogue with palette. Before we were introduced to them by one of their board members, they had a relationship with one of our or our dialer with one of our competitors. And we had a situation unfolded where we had had a had a, a situation where we started a dialogue. And we develop that relationship. And, and we had that relationship for probably 18 months prior to the transaction actually unfolding. So it's hard to predict how these things will unfold. But our job is as bankers and as advisors is trying to trying to build a trusted adviser relationship with folks like yourselves, entrepreneurs, management teams, boards, to have the opportunity to work with yours, folks like yourselves in situations like this. James,

Henry Peck  4:19  
when we spoke before the panel about the process of engaging that financial advisory you mentioned, and you can hear it from what Neil was saying about kind of that a traditional way of forming the relationship you mentioned, relatively, you know, early on in your journey. Did you engage Guggenheim talk a little bit about that kind of from the broader context, how you engage them versus maybe when other companies would engage them and run a process like that? Yeah,

James Leech  4:42  
sure. I think we were probably a bit early compared to other companies in terms of the timing of Guggenheim involvement in palette. It was pretty clear to us that there was a decent amount of strategic interest in the business and we were very focused on not distracting men. has written the company from what we were building. We had, you know, products and therapeutic areas that were relevant to a number of companies. And so we engage Guggenheim early to, to kind of help serve as a buffer, when we were in dialogue with strategics. And we were very clear with folks that we weren't running a process, right. But we had them on standby, so to speak, in the case, or in the instance, where someone wanted to be pre emptive and engaged. And so they were involved with us for probably 18 to 24 months prior to the actual exit, we would, you know, meet very often to talk about financial considerations for the business, how we think about exit dialogue that's been ongoing with strategics. And, of course, Guggenheim would add value in that regard throughout the process. But they really dove in significantly when things started to catalyze with, with Teleflex.

Per Langoe  5:50  
And I think, for a company of our size, when you get into a deep discussion with a blue chip company, you need to have the support of an individual like Neil and his team, it's really hard to go through diligence, in a speed of fashion without their support. I think that in our case, that coaching the need provided, I think that was instrumental for for the ultimate success. It comes obviously, that you there's a fee involved, but I mean, based on the work that we did with them, the value they provide is just, it's just so much more than than the than the cost of getting the support like that.

Henry Peck  6:29  
Value isn't free, it obviously comes with with a fee, like you said, so let's talk about you know, kind of fast forward, now, you're capitalized, you talked about the debt facility, the equity financing, you've done the date, how does the relationship with Teleflex get started, we'll go back to two part of start.

Per Langoe  6:46  
So I think James touched upon it. And I think it's critical for any medical device company that you don't, don't wake up one day, and all of a sudden, there's a transaction on the table, we started entertaining relationships with different strategic partners already back in 2018. And it kind of accelerated during the journey, we've probably had around 10 strategic relationships that we kept up to date, initially, maybe once every six months. And once we got commercial, it was probably once every quarter. So we have a lot of potential buyers that know us really well. Which means that once there is a process in place, or there is an offer, we can easily get some competition going. So this is this is something that you have to start preparing for quite early on. And that's probably also why we engage Neil and his team earlier than what you should do. Because Neil can have a different kind of discussion with strategic partners and what we count as a company, and it's just been very helpful to us.

Henry Peck  7:47  
I was gonna say, Can you say more about that, Neil, that different kinds of discussion that you can have?

Neil Oberoi  7:50  
Yeah, so I think, you know, oftentimes, maybe venture backed or early stage companies. They don't always get the balance. Correct. And there's no perfect science to it's more art and science of managing the strategic discussions. And I think what pear and James did really well was they focused on running the business. And that there was, as Paris said, a lot of strategic interest from a number of companies in palette for, for obvious reasons. But they spent their time focusing on commercial launch of bear gel, focusing on the business. And appropriately managing and balancing the information sharing and strategic interactions. I think a lot of that drove more interest in the company broadly for a number of companies. And you don't often see that from from management teams. And that's it's a very important part of why you might bounce things off of an advisor, whether that's legal adviser, or financial advisor, and how to appropriately What do I share? What do I how do I respond to certain inbounds? Do I respond at all? Do I see him at this conference? I just saw them do I give them another update? A lot of those things, I think it's it's people don't always get right. And again, it's not more so an art than it is a science, but I think it's what parent James, and the whole team of Paladin or board did exceptionally well, which I think is what led to a lot of that just the strong interest overall in the business.

Henry Peck  9:23  
So James, we go to that same state kind of around when you're starting to engage strategics these opportunities begin materializing your commercial, and you're likely kind of staring down the barrel of these types of exit pathways versus a potential larger financing with the company kind of talk about the decision making at that inflection point, what's going through leadership's mind and how you make the decision ultimately to pursue a strategic exit versus a larger financing. Sure,

James Leech  9:48  
I think it's important to start with just kind of the capital intensity of our business. To put things in context. We had a shareholder base after our 2020 financing that was, I would say pretty boiled in terms of not having experienced any dilution versus the significant growth that we had driven. And because of that they were very diligent sensitive, and there's nothing wrong with that, right? I think everyone has to protect their interests. But palate was in an interesting situation where we were constantly finding ways to fund the company in a non dilutive fashion. Just to give an example of that, our clearance for burial took longer than we expected in 2021, and then into 2022. And we had hired a full urology, focused sales team that was, you know, just waiting to launch the product. And so we actually struck a co promote deal with a company called Lanthimos. Pharma, that had a an imaging agent for prostate cancer that allowed us to get into physician offices early, talk about another product and also book revenue, that was very non dilutive for us. And I raised that just as an example of kind of the journey we would go through and creatively financing the company even if it wasn't from traditional equity sources. It was really interesting when we reached a critical scale with Barrett gel from a revenue profile standpoint, all of a sudden, we had interest from all the financial sponsors who, you know, didn't want to take the risk on us three years prior, which is not a typical, but the market had also really started to shift from a financial standpoint, a valuation standpoint. And so we were running into dialogues with folks where they were doing all doing the same math, reverse engineering into their turn that they wanted, based on conservative exit multiples in the future. And ultimately, when you're looking at a potential 50, or $60 million equity financing, even if you're at a strong revenue profile, if the expectations of the financial sponsor are, you know, half of yours from an Exit Multiple standpoint, you're going to run into some some valuation challenges and potential dilution challenges. So that was really important for us, when we were considering the timing of an exit the context of when things started to catalyze with Teleflex, I think, lined up well, with those discussions, and, you know, gave us the optionality and the informed perspective to make a decision on optimal timing to exit the business.

Henry Peck  12:10  
And so when when this process gets going in earnest, as Neil was saying, you impair running the business, and you're focused on this power, I want to kind of go over to you and from the leadership perspective, what kinds of things are you doing, or strategic or operational initiatives? Are you thinking about to prepare the business for exit in this context?

Per Langoe  12:28  
Yeah, so that's something that starts very early, I think the best way to have a successful business is to build a business that can be a standalone business forever, may you build the business from ground up, up as you build it to be resilient and to make sure that you can create something great from it, without them m&a events, necessarily, because they may or they may not happen, I think there are some things that are really important to to bottom up quickly, you need to have a solid supply chain. That's one of the first things that a blue chip company will look at. The second one is compliance. Once you go commercial, make sure that you have compliance manuals that people are trained, that you have a record of pretty much everything that's happened. And that's independent on whether this is an m&a event or whether it's is a debt financing. So when we did our debt financing, whether or been mad, we had to spend almost a full day running through our compliance, and they had specialized lawyer looking out at our compliance programs, making sure that everything had been done by the book and there were no deviations. I mean, you can have one or two deviations, and that's going to screw up the entire event for you. So I think that's, that's critical. So I think those are probably the most important considerations to be successful long term. I think it's also important that you show true to know your business. I mean, you need to know it inside out. There's going to be a lot of detailed questions. And these buyers, they will see through an A illusion very quickly. So it's important to know each and every customer that you have, because that's going to be important during diligence.

Henry Peck  14:08  
Thank you. So when we move into the process of Teleflex catalyzing the negotiation process begins and as you mentioned, it's it's an in depth, arduous process. Neil want to go over to you first and to talk a little bit about the process of shaping the deal itself. What kinds of things were particularly important that you were thinking about? And what aspects of the negotiation process can the audience learned from in thinking about potentially exiting their own business?

Neil Oberoi  14:35  
Sure, so maybe I might speak a little more generally, on m&a versus maybe the the Teleflex palette, situation just given not a lot that is public. But as you think about and the criteria are different for pre revenue businesses than they are for obviously commercial businesses. But what are some of the most critical things that you when you're negotiating a transaction, obviously price structure, deal certainty, and just some of the details in your merger agreement. So what do I mean by that? Obviously, pricing structure our people read about and see the sticker price in a transaction. But you want to make sure you see all of those dollars, the dollars that close. And if there's earnouts, the earnouts, and the dollars that closed or different parts of your merger agreement, whether it's working capital or indemnification, that will impact the dollars, you'll see it close. So that's important that you're thinking about some of these things versus just price and structure. And then there are things like deal certainty and this environment, we'll talk about the FTC environment a lot, make sure that the deal closes, and making sure your counterparty is signing up for whatever you think is critical for them to do to get the deal closed. So purchase price, structure, okay, structure, okay, there's earnouts, my transaction are the earnout structured market. And those are different markets different for revenue based earnouts, or clinical base or announcer regulatory based earnouts. And then what efforts is the buyer signing up for to achieve the earnouts in a particular transaction. So you know, thinking about these things, and having make sure you have good legal counsel to help you structure and negotiate some of these things in the merger document, as well as good advisors to help you think about more than just that the price, making sure you're seeing all those dollars, making sure deals getting closed, are critical. And then from a from a, from a buyer perspective. It's pretty similar. So these negotiations, you know, the transaction is announced. But there's probably anywhere from 30 to 60 days of negotiations, once you've agreed on a price and a structure to make sure these some these other aspects of your contract or your deal are buttoned up before it sees the light of day. And in a press release. When

Henry Peck  17:00  
you're kind of speaking about the broader market, I want to maybe follow that thread for a moment. And James could start with you, we'd love to hear some additional perspective as well. Thinking about when this deal got done versus where we are today. How would you characterize the impact of market timing and the conditions then on what ended up happening in this context, versus you know where we are now. And if that was if was happening, a similar thing was happening in today's market conditions?

James Leech  17:28  
Yeah, I think there are two, probably more but two considerations that come to mind for me when it comes to pricing and multiples. One is the broader macro environment and within the actual sub industry that you are focused on, because of course, any acquirer is going to look to historical transactions and where the markets are to inform their pricing. But the second is, of course, what you can mean to them intrinsically. And what I would focus on is the fact that you think about interventional urology is a segment that a number of strategics are pursuing and looking for growth within. I think, regardless of the timing, whether it was this year or last year, the outcome would have been similar. We had a product portfolio that was just attractive to acquires, and we had impressive growth on the revenue side, we had the ability to continue building the business if that was something we chose to do. So I think it's really important to build the business standalone and continue to focus on updating acquires as parent mentioned, but ultimately, what drives value is the metrics that you generate within the business. Obviously, the broader market can have some impact on that. But you need to have the fundamentals within the business

Henry Peck  18:44  
parently any perspective, kind of from this experience to offer to people now that are going to be you know, working in a similar similar concept, but in a different macroeconomic condition? can be for either of you.

Neil Oberoi  18:59  
I mean, I'll give my my perspective, just a bit of maybe on the on the market, broadly speaking, and just in m&a, specifically in med device. I mean, the last year just to quantify for everybody, there was probably 15 or so billion dollars of m&a volume in med device. Prior to COVID, we would see anywhere from 20 to $30,000,000,000. 25 or $30 billion last year on a relative basis was lighter in terms of med tech m&a, probably no surprise anybody in the room. It tended to pick up in the back half of the year last year, which I guess you could argue palette was announced in the back half of the year. And we started to see a higher multiple transactions on a revenue multiple basis. And we also started to see some earlier stage transactions. I think there are three pre revenue deals in November alone. So I think there was a lot of optimism coming into 2024 On the m&a side. The data hasn't really played out to support that there's been two transactions of any real size so far this year. But we still feel that the tailwinds that we felt good about coming into 2024 still there and on the m&a side buyers have strong balance sheets, buyers are saying the right things publicly, m&a has worked. m&a has driven top line growth and top line growth has driven premium P E multiples in the sector. So I don't know that the market has changed yet on the m&a side, we feel so very good about it. But if you look at just the pure data set of what's public so far, it doesn't support it. But there's a lot of the year that it's going to play out. And we're aware of things that are taking place in the sector, we're working on things in the sector. So it continues to be busy on the m&a side, we'd like the the equity, or the IPO side to help that out a little bit. It's anyone's guess when that thaws, but at least on on just pure device m&a, it's still it's still a pretty positive dynamic in the sector.

Great. When you look back at the entire the entirety of the process of building the company, the strategic exit, the integration, all the things that kind of ensued from their parents as CEO, what kind of final learnings or considerations Would you would you share for people, you know, thinking about building their business to that point today, or people that might be kind of in the midst of that.

Per Langoe  21:15  
So I think it's very easy to get stuck on technology and the product, it's so easy to talk about. But from a success point of view, it's really going to be about culture. And people. Make sure that you have the right company culture, a culture that people strive in the culture that people enjoy working in, and then everything else is going to work out. You're coming if you have the wrong culture, but the right strategy and tactics, you're not going to succeed. If you have the right culture, you can be a bit off on structures on strategy and tactic and still win. So I think that's, that's really important. And then what I said earlier, I think it's really important to start to prepare for some sort of an exit process early on. And it's also important to have the ability to say no, because that's your strongest card in a negotiation to be able to say no, and that means that you need to have options, you need to either have sufficient funding or make it or know that you can access funding, or that you have other options for the business. I think no is probably the hardest argument to work around for a strategic without actually improving the offer they have on your business. So those are the things that I would would say, I

Neil Oberoi  22:24  
might add, I think that's what Per said is exactly right. I mean, the you can't predict, when a buyer or buyers are going to come want to buy your business, you might think, Hey, we've achieved this clinical goals or regulatory goals, are we such a differentiated technology, we're such a natural fit for XYZ company, you just can't predict when they're going to prioritize either your space or your your company, or your m&a dollars overall. So running the business, like I said earlier, balancing the Strategic Dialogue is very important. In this situation here. I'm having had the dialogue with with Jamison pair in the in the board for a year and a half or so before the company transacted. There was a significant inbound interest in this company and companies wanted to meet with them wanted to speak with them. And many times I wasn't sure if their email was working, because the some of those companies didn't get replies back. But that's exactly how you have to manage somebody's future gay interactions, sometimes making sure you're running the business. And like I said, balancing these discussions. And that that tends to in itself generate maybe level of mystique, sometimes people want to find out why are in I'm a large company, why is this company not taking every time every meeting I want to have with them or sharing information every time I request it from them? Why are they pushing back? But that's in a lot of the success stories that we're involved in? It's about exactly that. And knowing when to say no, as pear said, whether it's on a negotiation, or just a strategic interaction or just a desire to grab coffee at the next conference, when you just saw XYZ Company A month ago, there's nothing new or to share with them.

James Leech  24:11  
Yeah, and I'll just add to that on information sharing, I think this is where counsel from Neil and his team was really important. You know, shortly after we launched bear gel, we had a lot of folks looking for an update on the business commercially. And we were tempted to to engage in that. And actually the counsel from Neil was well, you're one quarter into your launch, why would you give folks an update right now it's it's unlikely to meet their expectations. It's really difficult right to to catalyze growth that quickly when you're launching a product, so why don't we let the metrics get a bit further, let the the progress take hold, and then engage with folks from a position of strength and that type of restraint, I think is really important to make sure that when you're providing updates on the business, you're kind of skipping periods where there may be a lull in progress. certain natural tendency for the business to take time to mature, it's really important that the news you share is good news. Just like with a public company, right, you're looking to share events that are a real catalyst for growth. And when you're private, it's the same thing. But the benefit is you can choose how and when you share that information you're not, you know, beholden to, to capital market regulations around materiality and, and disclosures. So I just think Neil's point on information, sharing timing of interactions is really important.

Henry Peck  25:30  
There's a seems like there's a very human element of this song and dance of a bit of letting it come to you. And also a bit of running the process yourself outbound. Anything else to kind of add to that I know, you're, you know, we're talking a lot about the information, you share the technical, the financial. But, you know, some of the things you talked about is, you know, the, the urge to reach out to that person, the next conference to set up that next meeting to be hyper responsive to all of the messaging that may be inbound, and that, you know, you may be delivering, you'll how do you kind of counsel, from the interpersonal perspective, how you manage that relationship building process, from, you know, what you do outbound versus what you take inbound, and how frequently you're communicating as people?

Neil Oberoi  26:14  
You know, it's, it's interesting, because certain companies will have a certain level of dialogue with their obvious counterparties. Sometimes there'll be companies that they hadn't thought about, or that don't have the conversations with have the dialogue or the right level of dialogue with a certain within certain organizations. So oftentimes, we will we're partnering with a company, either informally or formally, we'll find out where's your conversation been? With with whom and each organization? And how often? And what's been the depth of that? And do you need to elevate it in a certain organization? And how can we help with that? Or do you need to involve other companies that you haven't had a conversation yet? And how do you do that? When do you do that? And what's the message to them that you're trying to bring in that introduction. So if and when there's a time where you're going to run a maybe a broad process, by the way, not every exit needs to be abroad process, sometimes these these exits are bilateral, sometimes they're they're two or three companies, sometimes they do go broad, not much broader than that, and med device, it all just depends on every situation is different. But you at least want to have an informed view of the landscape before you make a decision on how you're going to pursue your path. And just making sure you've checked the boxes appropriately. And with the right individuals, these organizations will help you best inform the path forward.

Per Langoe  27:39  
And I think for us, it was very useful to work with nail from that perspective as well. Because if you talk to 510 Different companies, we don't know who the ultimate decision maker is. It's going to be the board and the CEO at some point. But who are the people that we need to convince and communicate with along the way? It's just not only the one individual or the few individuals that we have initial contact with, but what's the decision process? And you know, what are they Yeah, hang ups that the you should have and hurdles and needs coaching was phenomenal. From that perspective.

Henry Peck  28:11  
Awesome. As we kind of wrap up our time here. I want to end with end with a couple things. One, Neil, you kind of opened this box moment ago, but broader m&a outlook for 2024 and beyond a little bit, you know, put this in the broader context of the med tech space, obviously an extremely attractive product portfolio in this case, and, you know, large strategic interests, but what do you see as you know, as the m&a outlook going into this year, and what would you kind of leave our audience with thinking about the the broader state of m&a?

Neil Oberoi  28:41  
You know, we still feel good about m&a in med device. As I said earlier, some of the things that we look at what are what are med device buyers of all sizes telling us? What are they telling the street publicly? It's not always the same? What's their level of interaction with folks like pear and James at their, at their companies? And what are we seeing in terms of loi, it's being submitted and dialogue that's taking place and things that we're actually working on. Things that we're actually asked to maybe pitch for are not necessarily a winning in certain situations that we're aware of. So the Act there's a lot of activities. There's a lot of m&a dialogue and and activity taking place. Last year, and this year so far, it tends to be a little more focused on commercial stage businesses. Now, that doesn't necessarily mean 50 plus million dollars in revenue. But there has been less focused on taking on regulatory clinical risk and ultimately, EPS dilution. It's not to say there's been no appetite for that. And that's no surprise given just where rates have been and given how m&a is cyclical. That being said, as I said last year, we sell for pre revenue deals three in November alone, and and an m&a and met Tech buyers, they all there's always a dumbbell approach. We need to we need the pre revenue, pipeline opportunities. And we need the commercial stage opportunities to help our drive our top line. But also in certain environments like this one, we need to make sure we're managing EPS appropriately. So I would it would be extremely helpful if there was an IPO at active IPO market to help the m&a dialogue and anyone's guess when that comes back. It's all a cyclical again, we've seen this movie before it will come back. And but from from our perspective, we expect a busy year and med device m&a, it's hard to predict where it all ultimately ends up. But it feels good. I wish I'd seen more data points. See the hit the tape already this year?

Henry Peck  30:47  
Great. Well, I want to make sure we also leave some time to talk about what you guys are working on now. Perry, why don't we start over you tell us a little bit about what you're working on now and how some of this experience is feeding that? Yeah,

Per Langoe  30:58  
sure. So I was recently appointed to CEO for GT medical technologists. It's a company that is primarily owned by MBM capital and jilda. phenomenal company, mission driven company. So we improve quality of life. For people that suffer from brain tumors, we have a device that can be used to control tumor regrowth in patients that have had a resection of a bigger tumor in the brain. So earlier clinical results are phenomenal, significantly better than standard of care. And the journey that we have ahead of us is to continue to improve execution, making sure that there is more clinical data available and ultimately get into the standards and guidelines and become the true standard of care for these patients that suffer tremendously from this horrible disease.

Henry Peck  31:50  
James over to you. Sure.

James Leech  31:51  
I recently took a job as Chief Financial and Strategy Officer at a company called Moxie med. We have a commercial stage product for knee osteoarthritis. So we have an implantable shock absorber that acts as a bridge for patients who have failed conservative therapies like injections, or weight loss, but are not candidates or not ready yet for a knee replacement. So a very large market a space that hasn't seen innovation in over 30 years. We have some similar shareholders to GT. So Gilda is in our company, also NEA, Advent and a deep history with Morgan Taylor, and vertex ventures as well. And we're currently raising a series D financing. So if that sounds interesting, feel free to connect with me after this.

Henry Peck  32:34  
Did you tell me maybe tell us a little bit more. Again, you know, when we had talked early about this deal with pallet? You talked about looking at that larger financing looking at the opportunity to sell raising a series D Now how are you thinking about that? You know what the experience of having kind of stared down that barrel before,

James Leech  32:49  
I think you just need to know what you're signing up for. You know, at a certain point, the capital into the company is a determinant of what you are expecting to get out of the company. And that's the math that investors do. Then, of course, that's assuming you're in a successful scenario where you're continuing to drive growth on the revenue, side and drive value that acquirers are willing to pay for. So it's the right the same math, we did a pallet, which was okay, if we don't sell now we take this money, what do we need to sell for later to get the same value for existing shareholders that we would get today if we sold today. So those same dialogues and thought processes happen within boards and within companies, and it's no different M Oxymat. As we raise a series D. When you look at the ortho industry, I think from our perspective, it's clear that we need to show revenue traction, especially given when we've launched a disruptive device. We're building a new market, and we have some reimbursement opportunities ahead of us as well. So it's always important to think about how a deal drives the eventual needs from a capital return standpoint, later on. But ultimately, if you need money, you need money. And you have to move forward. Right?

Per Langoe  33:57  
Absolutely. And I think it's that when you look at medical device companies, startup companies, smaller companies, I think it's just hard to do a transaction north of a billion dollars, because the buyer universe just decreases. So that tells you that if you look at the normal returns that shareholders are looking for, you can calculate how much money you can raise. And that's going to dictate, you know, what kind of execution that you can can have for the business. So important to keep that in mind when you do your long range business planning.

Henry Peck  34:25  
Great, as we wind down and give folks the opportunity to come up after the panel and talk to you guys asked questions. Want to just go down the line pair? We'll start with you just final thoughts on the entire process, the journey with palette and things you want to leave the audience with?

Per Langoe  34:39  
Yeah, so I think it was phenomenally rewarding. I mean, we were thinking about the exit, but we weren't. So we were all about execution and working together as a team. I don't think that we had one single day maybe one or two, but very few days where it actually felt that you left home and went to work. Because it was just It's it's such an exciting journey. And again, the one thing I would highlight is the company culture and the people make sure that you hire the right people, and you have the right company culture. If you do, most things are gonna work out.

Neil Oberoi  35:15  
We were thrilled to work with para Jas and an a, in a, in a very experienced team across the board. And we got to witness the culture, the parents mentioned a couple of times firsthand, and the camaraderie amongst his team throughout the transaction, closing dinner, et cetera. So I, I can't haven't worked with number of companies in m&a over how many years having the right team around you. Because not only for just building your business, but when a buyer comes. What are they? Who do they interact with? And what's the reflection of the business, it's the people that they're talking to the people that are facilitating the due diligence, and they're excited about the opportunity for more. Um, so I would, I would echo everything Paris said so far Mikesh, and continue to make sure you are building your business and not trying to time your exit.

James Leech  36:09  
Yeah, and I'll just add to that, obviously, an exit is, is what most folks strive for. And that's fun, and it's great. But when you look back, it's actually the company building process that that was the most fun and where you had the fondest memories. So what I would say having been through the journey now and come out the other side, and this is something that I'm definitely taking forward into other businesses now Oxymat is to just enjoy the process. Enjoy the challenges, have fun every day pirate mentioned PAL and almost never felt like work. And most of the management team and just general team of pallet continues to be lifelong friends because of the bonds that we formed during the the period where we're running the business. Great.

Henry Peck  36:51  
Well, we'll wrap up there so that way so folks can come up and ask questions. Do you guys thank you so much for joining us today for sharing that insight on the ballot palette and the company building journey, the deal process and looking forward to the success with your next ventures and your next set of deals. Thanks. Thank you