Do your homework, before the deal goes through

This month Smart Business is hosting its inaugural ASPIRE Conference in Cleveland — bringing together entrepreneurs, business owners, deal-makers, investors and advisers for a daylong conference to discuss issues in the M&A and business investment world.

Dealmaking is a huge part of business, and that’s why I wanted to put some focus on it here in Smart Business Pittsburgh.

Several of our columnists shared their thoughts on the topic, and I specifically sought out companies with M&A experience for the feature and cover story. (For a little lighter reading, be sure to check out the Uniquely Pittsburgh on PNC Park.)

Interview both ways

John Degory of Knowledge Center Enterprises LLC didn’t have much experience with private equity but now he’s a huge fan.

He discovered that having the right ownership structure, and investors, is key for growth. You can’t grow if you don’t have the right resources to invest in your organization.

One interesting thing I learned from Degory was that he wanted a true private equity partner. He asked just as many questions of his potential private equity investors, as they asked of him.

He also read between the lines, based on the types of questions he got, to infer what were the private equity firm’s priorities.

Get into the nuts and bolts

John Stanik, on the other hand, has acquired a handful of companies in his time first as CEO of Calgon Carbon and now at Ampco-Pittsburgh Corp.

Like Degory, he advocates doing your homework by getting details upfront. He says this helps you eliminate the potential surprises.

Stanik uses the interview process and meetings with the management group to gauge their leadership style.

“You can get a good feel by that interview process or that meeting process to understand the culture, to understand what the company believes, its position in the market, what its strengths are, what its doing, what its strategy is,” he says.

When you’re got your short list of candidates, you can go even further in the due diligence process.

“Now you can really get into the nuts and bolts and the details of the company and get a very good feel for how easy or how hard or how short or how long it will take to move these two entities together into one.”