Q&A: Mergers and Acquisitions

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Sean Walker is a managing director at Salem Partners.

How did you become a managing director in M&A?

My route to managing director was somewhat atypical. After graduating from the Wharton School of Business, I entered the US Navy on an NROTC Scholarship from the University of Pennsylvania and spent eight and a half years there. After my first tour of duty, I finished my commitment to the Navy as an NROTC instructor at UCLA, while simultaneously earning an MBA from the Anderson School. Next came a few stints at boutique advisory firms, then more than eight years at McGladrey Capital Markets in Orange County, Calif., where I helped close deals in healthcare services and aerospace and defense. I left as a director, joining Salem Partners in 2009. At Salem, I spend most of my time establishing the firm's fledgling aerospace and defense practice and assist with our healthcare services group.

What's a typical day like for you?

The M&A business works in ebbs and flows. You are either trying to get a deal completed or working to get the next deal in the door. Since joining Salem, I spend most of my time on marketing. Each day, I'll review my calendar and have a briefing with an associate about marketing documents, upcoming pitches, or publishing industry articles in order to get Salem's name out there. The rest of the day is spent on the phone calling prospects, talking to accountants, lawyers and private equity investors. Being in the middle-market is different than being in the bulge bracket. We generally don't get mandates because of the firm's relationships. We have to personally cultivate our own relationships and that's not easy work.

When we're in the market with a client we spend our time trying to get books (50 page books that describe our client's business) in the hands of private equity and corporate buyers, setting up meetings with those buyers, and trying to provide a compelling offer for our clients. All the while, we tailor an "acquisition thesis" that may be unique to each potential acquirer or investor. Ultimately our objective is to get best deal possible. This involves a lot of jockeying over the course of a couple of months. We obtain as many strong offers as possible and come to a decision. Only through a comprehensive process can we assure our clients that they have left nothing on the table. The ultimate indicator of success is a wire transfer, once the transaction has closed.

Any advice for an up and coming M&A professional?

Currently it's very difficult to enter this business. It's tough to get the training and development in M&A at a boutique firm. For someone fresh out of college I'd recommend starting at a large bank with a training program in place. In that environment, you're better able to hone financial modeling and presentation skills. You need to be classically trained to appreciate how quickly these tasks are performed. You'll work long hours and perhaps feel a bit underappreciated, but the training you'll receive is superb and you'll make some solid relationships. Having that experience will make you more marketable, and help you stand out compared with other candidates if you decide to move to a boutique firm or more entrepreneurial environment.

What are the most important skills for a career in M&A?

It's important to be even tempered because almost every deal is an emotional roller coaster. Nothing is ever as bad or as great as you might want to think. To get a deal done, you must manage client expectations, which requires a steady type of personality. You're always an advocate for clients - if you can't do that, then you shouldn't have taken the mandate - but you also must advise them appropriately. Often times, middle market clients are people who've built a business from scratch and poured a significant part of their life into making the company grow. At that point, you're not dealing with a CNBC-style CEO or a dispassionate board. You're dealing with people that are wedded to their businesses, and you have to be well versed in helping them achieve their goals.

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