Acquisitions are largely about people. Certainly, it’s important to have the right people with the right skill sets, but far more critical is having a group that has the right chemistry.
“It's amazing when you can get the right group of people with the right skill sets together and they also have the chemistry. That's not always the case,” says Pat Bartling, CEO of Conforms. “You can have an outstanding CFO and an outstanding operations guy and they can be the best of the best, but if they can't work together, if they don't have the common vision, you've got a problem.
Because of that, assessments done both individually and on a group are very important. An assessment, he says, can help the parties in a transaction identify any issues.
“Sometimes the people don't even understand it, that they don't gel,” he says.
Similarly, in cases when there’s a move from a private or family-owned company to one that’s backed by private equity, it can mean there will be a different leader or the same leader may only be around for a certain amount of time. But many leaders aren’t sure of what a private equity model looks like, which can create challenges.
“What often times doesn't come through early on is that there's a debt service that has to be taken on by this new entity,” Bartling says.
The organization, operating like they were in the last few years, often don't realize that there's going to be another event in the next five years. They might suddenly not have the cash flow that they used to have and they don't understand that there's a time factor around a private equity model.
“Having a transparent view of what that model is and then having a transparent view and an aligned focus is critically important,” he says. “And I just believe that so much of that can be resolved and understood between the team and the new owners if an assessment is done.”
Bartling, along with Hays Companies Senior Vice President Kristine Olson, Borgman Capital Managing Director David Bartelme, and Executive Search Partners Principal Nick Curran, spoke at this year’s Milwaukee Smart Business Dealmakers Conference about evaluating the people who drive post-acquisition growth. Hit play on the video above to catch the full conversation.
