Dean Clough

February 9, 2024

Portico Darwin: London Calling, Chapter 2



5 Minute Read

Happy Friday, and this is the second installment of London Calling.

But before that gets started:

OK.  Here we go. 

Upper Ground and Upper Class (Non-Virgin Atlantic Variety)
I had worked for Ernst & Young in Houston in the early 1990s (so in both their and client Chevron's fancy towers downtown) and had already grown accustomed to Genstar's fairly luxe facilities in SF's Financial District.  Heck, I even visited The New York Telephone Company's ornate HQ building in Albany often as a kid in the 1970s (true - my father worked there for years).

Yet none of that prepared me for what became my primary workplace for the next 11 months:  The glamorous Sea Containers House in London.   

Dead-smack on the south bank of The River Thames and directly across from St. Paul's Cathedral, it was here where I and the rest of the Genstar and GE Capital due diligence team first toiled.  We worked long hours in this building (and our hotel) for a solid week. 

I would do it again in a second.  This week began some of the best 11 months of my life, and Julie's.  We just didn't know it yet.

It was also here - 2 floors below that golden Sea Containers House sign - in a conference room that ran the length of those four wide, wide windows, that we met our Seaco counterparts.  This story is nothing without my British friends, some of whom I met for the first time on this trip.  I assure you, we'll get to them later.

And while Genstar's CIO Johnny Fugazi had already been here and had met the principals, for most of us, this was all new.  It certainly was for me.

In 1997 and even in America, most still dressed up for work, and by that I mean suits for men and the equivalent for women.  London?  My LA Law-like Hugo Boss kit was barely good enough, as the Seaco executives appeared to have rarely strayed from Saville Row.  Not having shirts with French cuffs felt like an affront to civilized society here, FFS.
I don't remember everyone who comprised our due diligence team.  It was Fugazi, a few other Genstar folks from various groups, some GE Capital corporate types, and me.  I barely understood what was going on, and remember being overwhelmed by the whole thing.   

The solid oak-paneled conference room was nearly the size of a fucking football field, for one thing.  And then there were the female admins that brought us tea and literally crumpets after lunch; I don't think my British colleagues caught my double-take. 

And more pertinent to the task at hand and despite having co-authored Genstar's IT strategic plan:  I still knew relatively little about the big-time intermodal shipping business. 
That week in London, I got a crash course.

What, Exactly, was Sea Containers Limited?
Genstar's potential merger partner was, at the time, a super fucking cool company.  They owned trick high-speed passenger ferries that plied The English Channel; posh hotels; the Venice-Simplon Orient Express (and other) luxe trains; and Great North Eastern Railway, a regional UK passenger railroad.  


And of course, the shipping containers, which are not interesting to look at.

Oh, and from Wikipedia, the origin story of Seaco:

Yale University graduate and retired United States Navy officer James Sherwood founded Sea Containers in 1965, with initial capital of $100,000.  It was later listed on the New York Stock Exchange.  

We often laughed that this most British of companies - and let me tell you, Seaco was fucking dripping Blighty - had been founded by a Yank. 

Or Septic, in Cockney Rhyming Slang, as I learned that week.

It's a Party and Nobody Cares
There can be no retelling of this story without emphasizing the opulence and decadence that prevailed throughout.  Literally every step of the way and even as an outside consultant, no business class flight was wrong, the better the hotel the better, and for fuck's sake, don't skimp on the food and drink.  It was a good time to be a part of something like this.

And it was the Genstar CIO Fugazi that set the tone for the next 11 months during this first trip, in October of 1997.

How?  Example:  Most of the team stayed at Royal Horseguards, a perfectly wonderful hotel directly in Whitehall.  This hotel would be central to the early days, so you can bet we'll get to this later.

That wasn't enough for Fugazi - he ensconced himself at The Savoy.  Can't say I blame him, but Royal Horseguards was more than fine, Textbook, even. 
And when I wasn't trying to understand the ancient secrets of Seaco's X.25 networking, I was right there with regular Genstar and GE employees on the due diligence team:  At the best restaurants, bars, and shows, in London.  Le Palais du Jardin, Belgo, and OXO Tower were Johnny's favorites at the time, and it was always pedal to the floor.  Or more precisely:  Fugazi's GE corporate credit card to the tab.

Whether it was fine wines at Palais Du Jardin, board after board after board of Schnapps at Belgo, or a French cheese course accompanied by vintage port at OXO, it was all fair game with John Fugazi.  I, of course, loved every single second of it.  

For the record, the first two are long gone, but OXO Tower is still going strong, some 25 years on.  And holy smokes, were all 3 Killer then.

Frankly, it was almost like he wanted us to live it up, with or without him there.  As I embedded myself further and further into the program, I was more than happy to prove that thesis.

And it would help that Seaco was full of enablers.

What, exactly is Due Diligence?  From Lexis/Nexis:  Due diligence is a comprehensive assessment process undertaken by a merger partner to thoroughly understand the operational, financial, legal, and strategic aspects of the target company.  It's the deep dive that aims to reveal any hidden liabilities, risks, or potential red flags that might not be evident at a surface glance.

What Did Our Due Diligence Visit Reveal?
The entire process was a blur, and as above, I hardly understood any of it.  l look back now and realize my part at this point of the merger was of so little significance as to border on irrelevancy. 

Because where the heavy lifting took place in the fall of 1997, on the murky Thames, was in the break-out rooms.  This was where actual brainiacs would delve into the financial aspects of both Seaco and the deal itself.  And the legal teams from both sides were doing the same - I think those people took up a couple of rooms on their own. 

Remember, the higher-ups from both companies had already decided they wanted this merger done.  The respective due diligence teams just had to figure it out, and each company had to ensure the other wasn't hiding anything material.  Or at least overly material.

In my little slice of the analysis, Genstar's tech was old, but we were at the time of the proposed merger actively engaged in a top-to-bottom IT refresh.  Seaco's technology was older, and they weren't planning shit that I could see in terms of wholesale upgrades.  Indeed, I don't think they had ever done things that way.

So that's what I said, verbally, and in writing, at the end of the week:  If this merger occurs, the joined companies will require a new technology platform, and fast, in every office that is retained.

Now I just had to sell that to everybody, and that I was the person to direct the effort.  I would have my chance soon, as Seaco was sending their due diligence team over to Genstar's San Francisco HQ in a few weeks.

And so it was - my first posh international business trip.  It was mostly a lot of work, with some intense eating and drinking thrown in as a diversion.  How intense?  

Towards the end of the week, and after a 12-hour workday and late dinner at the Royal Horseguards, fellow GE due diligence team member Mike Sgroi and I picked up a bottle of Johnny Walker Black Scotch. We walked down to a bench at the base of Big Ben, took a seat, and knocked the whole thing back. We did bring glasses.

I remember much of that evening, especially the earlier parts.

But that was nothing - the carousing integral to this program would become legendary.
Up next:  Limey Bastards Invade SF


Hunter Deuce was succinct and accurate in his response to the death of the World's Most Expensive Man.

Financial planners can be such buzzkills.

And both he and new Portico Darwin fanboy Randy Smee enjoyed the Rainbow pick on KLUF, although Randy got tactile, after a bit of self-reflection:

Rainbow - Rising.  A guilty pleasure.  Richie Blackmore’s guitar and the clear, loud production for that era set it apart.  It makes me feel better about myself that you call it out. 

Often played loudly in the car when I’m on one of my frequent long journeys.  Either taking over from Ronnie Dio on vocals, or wearing out the edge of the car seat doing Blackmore strumming.

Thank you for reading this newsletter.  


Due diligence is akin figuratively to ascertaining the color and the shape of your prospective partner. 

Released in May of 1997, I was crazy about this in London and ever since.  Here is the real Diamond Dave, and his band, Foo Fighters, with the Killer The Colour and The Shape. 

The fact this album's title uses the British spelling of the word "color" makes it even more perfect for today.  As my British friends have always said, regarding the UK and US:  "We are two great nations divided by a common language."

About Dean Clough