Cultural Fit Over EBITDA: How Salas O'Brien Built a 30-Merger Program Without a Single Failure

Background

I grew up in the Appalachian Mountains, in a small town on the border of Virginia and Tennessee. We were on the edge of the Rust Belt, so manufacturing was a big part of the community. My dad worked in a factory at one of those manufacturers and over time worked his way up into a sales role.

He still works at that company today on a consulting basis. He has been there for about 50 years, which is remarkable in this day and age. He has been through multiple LBOs, bankruptcies, offshoring, and everything in between. He has seen a lot over his career and is actually at a conference in Las Vegas for that company right now.

My mom’s job was probably a lot harder than my dad’s. She was a stay-at-home mother for six children while my dad was on the road almost every week. She was often acting like a single parent in a household of six kids in a 2,200-square-foot house. It was bedlam, and she managed it well.

Once we were all in school, she went back, earned a degree in nursing, and became a school nurse in our district. My parents made a lot of sacrifices for my siblings and me. I am extremely grateful for the opportunities they created for us that might not have been available to them.

Although my dad retained his role for over 50 years, many others were not as fortunate. There was significant offshoring, and many manufacturing jobs left our small town. I was exposed at a young age to people who struggled to make ends meet through no fault of their own.

That shaped how I thought about my future. I wanted a career that would help me avoid being negatively impacted by forces outside of my control.

At that stage, my frame of reference was narrow. I thought that if I wanted to make a good income, I should look around and see who was driving nice cars in town. The doctors drove nice cars, and the car dealers drove nice cars. So I decided I would become one of those two things.

My first year in college, I pursued the doctor path and realized very quickly it was not for me. I shifted into business management.

After graduating, I believed the best path to making a good living in business was running a dealership. I ran a Harley-Davidson dealership for about five years. It was a great experience. I learned a lot about sales, customer service, and the lifecycle of a client. That foundation was valuable.

I eventually went back to school and earned my MBA from Virginia Tech. That experience opened my eyes to opportunities beyond being a doctor or running a car dealership. I pivoted into corporate finance and moved to Denver, where I worked for a couple of large firms.

While I was in Denver, the organization I worked for was merging with a firm in London. We were told that some employees would lose their jobs, but we did not know who. We were also told that if we stayed for an indefinite period, we might be eligible for severance if we were impacted.

I decided I did not want to wait to see whether I would be affected. I started looking for other opportunities and was fortunate to find an acquisitions role that brought me to the Phoenix area.

I moved to Phoenix with my wife. We are a blended family with five kids from her first marriage and one together. We have been here for almost nine years. My youngest just turned 10 last week, and I now have a couple of kids out of the house.

Since moving here, I have been working in M&A roles. When I joined SSOE Group a little over three years ago, M&A was handled by me and our CFO. We were doing the best we could and making good progress, but we had an opportunity to build out the team.

Today, our corporate development group has three full-time members, including myself. Over the past three years, we have completed more than 30 mergers with a 100 percent success rate. We also completed a recapitalization, brought on Blackstone as a minority investor, and refinanced our debt multiple times.

It has been a busy and transformative period, but one that reflects the power of building a focused and disciplined M&A capability.

Importance of People in M&A

My experience in Denver made me somewhat skeptical of M&A. Growing up in a small town, I had seen people lose their jobs as manufacturing was offshored. Many of them were never able to financially recover. I saw the toll that took on families and communities.

I did not want to be part of something that created that kind of impact on others. I am not saying those decisions should never happen, but I did not want to be in a role where I was responsible for causing that kind of outcome without careful consideration.

In prior roles before joining SSOE, it was often communicated upfront that no one would be impacted. But in practice, there were frequently team members who were determined relatively quickly not to be a good fit. The message and the execution did not always align.

So when I was interviewing with SSOE, I was skeptical. I had heard the story before. “We don’t lay anyone off.” I thought, we will see. Time will prove whether that is real or not.

Over the past few years, that skepticism has been replaced with confirmation. That is not the approach we take. We are a people organization.

SSOE is an engineering firm. Our primary asset is our people. They leave the building every day and go home. That means we have to take care of them. If fear is introduced into the system—if people feel at risk of losing their jobs—an organization does not just lose underperformers. It risks losing top performers as well.

High performers often think the same way I did in Denver. They do not wait to see if they will be impacted. They take control of their own destiny and look for the right opportunity.

That experience has reinforced why I value working for a company that ensures M&A is a win for all stakeholders—employees, clients, and shareholders—before moving forward with a transaction.

Leadership Retention

To clarify the 93% statistic, that is not an annual retention number. It is cumulative for everyone who has joined us through a merger over the past 15 years. Ninety-three percent of the shareholders from those organizations are still with us today.

Most of the 7% who have left did so because of retirement, often much later than they originally planned. The first person who retired after a merger did so at 83 years old. That is not typical after someone sells a business and stays on for another 10 or 15 years.

We have team members and legacy shareholders who believe in the organization and want to see it grow. That level of retention is not accidental.

We do not compromise on fit. We look at over 200 opportunities each year. Less than a third make it past the first call.

In that initial call, we focus on three core criteria.

Long-Term Leadership Commitment

First, we evaluate whether the leaders are committed to staying for the long term. We are not the right partner for someone seeking a 100% cash deal and an immediate exit. There is nothing wrong with that objective, but it does not align with how we approach M&A.

We want leaders who intend to remain engaged and contribute to the business over time.

Passion for the Work

Second, we look for passion. I often think about my dad in the HVAC world. He genuinely loved compressors. I remember hearing him talk about scroll technology and two-speed compressors at family dinners and business meetings.

That same energy matters here. Whether it is soybean processing, cheese manufacturing, data centers, university HVAC systems, or geothermal solutions, it is powerful to sit across from someone who is deeply passionate about their work. It may sound niche or technical, but that enthusiasm is a strong indicator of long-term engagement and cultural alignment.

We want to partner with leaders who care deeply about what they do.

Cultural Fit and Personal Compatibility

Third, we want to work with people we like. At the end of the day, more time is spent with colleagues than with family. That makes compatibility essential.

I remember after one of my first introductory calls with a potential partner and our CEO, Darren, he asked me what I thought. As the new person on the team, I gave a balanced response and outlined both positives and negatives.

He then asked a simple question: Would you go out to dinner with him and his wife? If the answer is no, it is probably not a good fit.

Those are our initial screening filters. They are straightforward, but they drive long-term success.

These parameters and post-close drivers are equally important to retention. Cultural fit is critical. It is important to partner with someone who fits culturally and who is enjoyable to work with, because there will be challenging days. There will be difficult moments.

If it is someone who is not enjoyable to work with, those hard days become significantly harder. If it is someone considered a friend and a peer, when something goes wrong, both sides rally together, solve the problem, and move forward.

That dynamic becomes even more important because many of the firms we acquire are founder-owned. These leaders are entrepreneurs. They are not accustomed to having a boss.

Post-close integration is just as important as upfront screening. Founder-led businesses are often built over 25 or 30 years of consistent success. They are not looking for a corporate overseer telling them what they have been doing wrong.

We do not acquire fixer-uppers. We acquire well-run organizations. There is more than one way to build and run a successful business. There is no need to go in and drastically change how someone operates simply because that is how another company does it.

If something works, it should continue. Leaders should maintain the autonomy they had before. They should continue making the decisions that made them successful.

The role of the parent organization is not to override what is already working. It is to provide support where helpful—whether that is adding resources, sharing capabilities, or enabling additional growth.

The message is straightforward: continue doing what made the business successful. The reason for the acquisition is to build on strength, not to fix something that was broken.

Exiting Leaders

Now, if there/s a healthy company, financially performing well, we still don’t deal if the leaders fail the criteria. There is no strict rule, but typically we look for leaders to stay on board for at least three to five years. In many cases, they remain much longer.

The founders of our organization, Carl Salas and Dan O’Brien, are still with the company today. We celebrated our 50-year anniversary last year. Neither of them needs to work. They are financially secure, but they are passionate about what they do. They enjoy training younger team members and helping develop the next generation of leaders.

They are not working 60 hours a week. They work what makes sense for them—whether that is 20 or 30 hours—and they take more vacations. But they are still engaged. They want to see the organization continue to grow, and they are actively supporting that growth.

As a general guideline, three to five years is the minimum expectation. There can be flexibility if a leadership transition has already occurred and the next generation is in place. In cases where a founder has stepped into a chairman role and is no longer involved in day-to-day operations, the structure may be adjusted accordingly.

Using Earnouts

We do not want anyone in the organization who does not want to be here. Employment agreements are not viewed as golden handcuffs. If someone does not want to remain, they should not feel forced to stay.

That perspective ties back to the 93% retention statistic. No one is here because they have to be here. They are here because they want to be. Culture and relationships deteriorate quickly when someone feels trapped. It is leadership’s responsibility to create an environment where people genuinely want to stay long term.

If someone were to leave because they no longer wanted to be part of the organization, that would be viewed as a leadership failure. Earnouts may exist in certain transactions, but they are not used as tools to force retention. Long-term success requires voluntary commitment.

From a transaction perspective, alignment is critical. Earnouts can be used objectively to bridge valuation gaps, but they are not the primary mechanism for retention.

A meaningful portion of consideration typically involves equity rollover. There is no rigid formula, but generally 20% to 40% of total consideration is rolled into SSOE equity. This ensures long-term alignment of interests.

Founders often prefer to retain as much ownership as possible, and that commitment is welcomed. When leaders are willing to invest in the broader organization, it demonstrates belief in the long-term vision and reinforces shared accountability for growth.

SSOE operates as a market maker for employee-owned shares. Approximately 95% of employees own shares in the company. While there is a minority private equity investment, the firm remains supermajority employee-owned.

Employee ownership is a foundational principle. It is not limited to senior leadership. Participation extends across the organization, from recent interns to executive leaders.

Each year, employees have the opportunity to purchase shares, and several hundred employees participate annually. In addition, there is a 401(k) matching component provided in SSOE shares.

This broad-based ownership structure reinforces alignment, supports retention, and strengthens the cultural foundation that underpins long-term M&A success.

Deal Sourcing

There are multiple ways we source opportunities. We cast a broad net and typically conduct more than 200 introductory calls each year. These opportunities generally come from four main channels.

Team Member Referrals

The first source is team member referrals. Many of our employees worked at other firms before joining SSOE, or they have collaborated with other companies through subcontracting relationships. Through those experiences, they gain firsthand knowledge of how other organizations operate.

When someone has worked closely with another firm and believes it would be a good cultural and operational fit, they often recommend that we reach out. These referrals are valuable because they go beyond financial metrics. We already have real-world insight into whether the people and leadership teams are the kind we want to work with.

Team member referrals are one of the most significant drivers of our sourcing activity.

Buy-Side Representatives

We also work with buy-side representatives. We clearly define the characteristics we are looking for in a potential partner, and they help identify companies that match those criteria.

Many firms are interested in working with us because of our reputation in M&A. We have built a track record of being disciplined but fair. Our diligence process is straightforward—we are not searching for reasons to retrade the deal. We approach transactions with the intention of getting them done.

That reputation has positioned us as a preferred buyer in the space, which often allows us to see opportunities before they are broadly marketed.

Competitive Sale Processes

As the organization has grown, we have begun to participate more frequently in competitive sale processes.

When I first joined, more than 90% of our mergers were completed through proprietary discussions rather than formal sale processes. Today, we still complete roughly 70–75% of our mergers on a proprietary basis, but we are seeing more opportunities brought through advisors, bankers, and brokers, especially as the size of potential transactions increases.

Direct Outreach

The final sourcing channel is direct outreach. We maintain regular communication with our operational leaders across the organization. Sometimes they identify a need for a specific capability, technical specialty, or geographic presence.

When that happens, we can use software tools to quickly identify 20 or 30 firms that fit those criteria and begin outreach.

Response rates are never 100%, but even a small number of replies can lead to meaningful conversations. Those initial conversations contribute to the pool of introductory calls we conduct each year and occasionally lead to transactions that support the organization’s strategic and operational goals.

For outreach and employee referrals, the first contact typically comes from our CEO in the form of a direct email. If there is no response, we follow up through LinkedIn.

If that still does not lead to a connection, we have tools that identify the conferences those leaders attend. In some cases, we will attend those same conferences and connect in person.

The goal is simple: find opportunities to start the conversation and build relationships that may eventually lead to the right partnership.

Best Sourcing Approach

Employee referrals and buy-side introductions account for the majority of our opportunities. Together, they represent roughly two-thirds to three-quarters of our introductory conversations each year.

Direct outreach currently represents the smallest portion of our sourcing activity. Part of the reason is that we have been fortunate to see a large volume of high-quality opportunities come to us through existing channels. We are not choosing between good and bad opportunities. Often, the decision is between good, better, and best.

Even so, direct outreach is an area I would like to expand. It has been effective when we use it, and personally, I enjoy the process. Going back to my sales days at Harley-Davidson, there is a certain thrill in identifying a target, reaching out directly, and seeing where the conversation leads.

Inbound interest also plays a meaningful role. Approximately 10–15% of our introductory calls come from companies reaching out directly to us.

Part of that momentum comes from how we position transactions. We refer to them as mergers rather than acquisitions because we approach them as partnerships. Even though many deals are legally structured as acquisitions, the intent is to bring together organizations that want to grow together.

That approach has created a flywheel effect. Early in my tenure, we completed a merger with a firm called Plus Group. After that transaction, another firm that had a relationship with the leadership of Plus Group reached out and said they had heard positive things about the organization and wanted to explore joining as well.

That conversation led to another merger. Then another firm reached out after hearing about the experiences of those leaders. In each case, success built credibility, and that credibility generated the next opportunity.

It is similar to what private equity often calls a flywheel effect—success creates momentum that attracts additional partners.

Competitive sale processes represent roughly 10–15% of the opportunities we evaluate. In some cases, we know early on that the fit may not be ideal. For example, if a company is private equity-owned and seeking maximum valuation with limited leadership retention or equity rollover, the structure may not align with our approach.

However, when we do decide to participate in a competitive process, our success rate is strong. Our win rate is close to 50%.

That success often comes down to the priorities of founder-led organizations. Many founders care deeply about the people who helped build their companies—employees who have worked there for 20 or 30 years.

When they see our track record and understand how we treat employees after a merger, it becomes a compelling story. Founders want assurance that their teams will be taken care of, and our experience allows us to demonstrate that commitment credibly.

CEO-Led Outreach in Direct Sourcing

In our direct outreach efforts, the initial contact typically comes from our CEO. Messages sent from the CEO’s email tend to convert at a higher rate than outreach from corporate development alone. When someone sees the CEO’s name in the signature line, it signals that M&A is a meaningful priority for the organization.

Mergers are a core part of our strategy, and our CEO, Darren, is deeply involved in the process. He participates in every introductory call and personally meets with every leader after a merger. Because of that level of involvement, it makes sense for him to lead the initial outreach.

The process is straightforward. Our team drafts the email, shares it with Darren for review, and once he approves it, the message is sent under his name.

The tone of the first email is simple and relationship-oriented. The goal is not to sell a transaction but to start a conversation.

If the opportunity came through an employee referral, we first ask whether we are allowed to mention that person’s name. If they agree, the message might say that we recently spoke with a mutual connection who suggested the firm could be a strong partner for our organization. From there, we invite them to have a brief introductory conversation to explore whether there could be ways to strengthen both businesses.

The outreach is intentionally direct and uncomplicated. The objective is simply to open the door for an introductory call.

If the initial email does not receive a response, we follow up through LinkedIn. Sometimes the connection request or message comes from me, and sometimes Darren will reach out directly. He is very active on the platform and maintains a large network of professional connections.

LinkedIn outreach does not have a high response rate, but it does occasionally lead to conversations.

Another option is connecting in person. Using software tools, we can see which conferences leaders are attending. If we know someone will be present at a particular event, we may attend the same conference and introduce ourselves there.

The goal across all these channels is the same: create opportunities to start the conversation and build relationships that may eventually lead to the right partnership.

We also track conferences. We use a platform called SourceScrub, which was recently acquired by Grata. One of the useful features of that software is the ability to identify conferences that companies and their leaders are attending.

If I am considering attending a conference, I can look in the system and see which firms are likely to be present. Alternatively, if there is a specific firm I want to connect with, I can check whether their leadership team is scheduled to attend any upcoming industry events.

This visibility is typically stronger for larger firms. Smaller companies do not always have the same level of publicly available information, so it can be harder to track their conference participation.

Still, the tool helps us identify opportunities to connect in person. If someone we want to meet is attending a particular event, we may attend that conference as well and introduce ourselves there.

It is a very direct approach, but it works. In many ways, it reflects the same mindset I developed during my sales days at Harley-Davidson—be proactive, show up where the customers are, and start the conversation.

Initial Conversations

My introduction at the beginning of our conversation was intentional. That is often how our introductory calls begin. We start by sharing our backgrounds and the experiences that shaped who we are today.

The goal is to get to know the leaders we are speaking with on a personal level. I want to understand what motivates them, how they built their business, and how they navigated challenges along the way. When you ask an open-ended question like “Tell me about yourself,” you learn a lot about what truly matters to someone.

We lead by example. I share my story first—the good, the bad, and the difficult moments that shaped my path. Then we invite them to share theirs. That exchange creates an environment where both sides can learn about each other beyond the business itself.

Most of our introductory calls last between 60 and 90 minutes. After the introductions, there is often only about 10 minutes left for more traditional questions—what they are looking for in a partnership and what factors will influence their decision.

But in that hour or hour and a half, I usually hear enough to determine whether it makes sense to continue the conversation. Financial performance and other diligence topics can come later.

At the end of the day, we view this process like a marriage. If I cannot enjoy getting to know someone over the course of an hour—or if I would not enjoy having dinner with them and their spouse alongside my spouse—then it is probably not going to be a successful long-term partnership.

Those introductory calls are primarily about understanding the person behind the business: how they got to where they are, what challenges they have overcome, and who helped them along the way. That context tells us a lot about whether we can build something together.

By being open and personal with them, they reciprocate and are more likely to open up to us during that initial call. 

When I was looking for my next opportunity before joining SSOE, I did not come from a traditional M&A background. I did not have an investment banking background or a top-tier MBA pedigree. For some organizations, that mattered. For others, it did not.

As I prepared for interviews, I spent time thinking about how I should present myself. Eventually, I decided the best approach was simply to be honest about who I am. If someone did not like my story or my background, that was fine. It would just mean I was not the right fit for them. But I believed that somewhere there would be an organization that valued my experience and perspective.

That mindset carried into my first interview with Grant. He started the conversation by talking about himself and his family. Hearing that immediately stood out to me. It signaled that the organization valued people, not just resumes.

That approach reflects how we think about relationships internally as well. Work is demanding, but conversations about family, personal experiences, and accomplishments outside of work are often what create genuine connections between people.

Those topics help people understand what motivates someone and what matters to them beyond their professional achievements.

Even during my first interview with SSOE, much of the conversation focused on background, personal experiences, and what people enjoy outside of work. Those discussions created a more authentic connection and reinforced the importance of cultural alignment within the organization.

Signs of an Actionable Deal

The willingness of leaders to share their personal experiences often signals whether our approach resonates with them. When people are open about their backgrounds and values, it creates a stronger connection and helps us understand whether there is alignment.

Our CEO often leads by example in those conversations. He openly shares that he was adopted, which is part of his personal story. When he brings that up, it often prompts others to share similar experiences—whether they were adopted themselves or have adopted children.

Moments like that help move the conversation beyond a typical business discussion. They reveal common values and perspectives that might not surface in a traditional transaction-focused meeting.

Those conversations also reinforce a simple message: we are not approaching the discussion as if we have all the answers. We are simply a group of people trying to build something successful, just like the leaders we are speaking with.

When leaders recognize that perspective, it often creates a sense of mutual respect and partnership. The idea is that together we can build something stronger than either organization could accomplish alone.

When leaders reciprocate by sharing what matters to them—their values, their experiences, and what they care about outside of work—it increases the likelihood that the relationship will move forward beyond the initial conversation. Those signals help confirm that the potential partnership may be the right fit for both sides.

Diligence during Interviews

I am not particularly good at traditional job interviews. In our process, the real evaluation happens during the three months of diligence.

People can say anything in a one-hour conversation. That is why we do not rely on behavioral interview questions during the introductory calls. Instead, we observe how leaders operate over time.

If there is mutual interest in moving forward, something will almost certainly go wrong during the diligence process. That is simply the nature of M&A. When that happens, we get to see how leaders respond.

That period allows us to evaluate behavior in real situations. We see whether someone steps up to solve the problem, becomes confrontational, or pulls back under pressure.

Diligence also provides the opportunity to review the company’s financial history in detail. We examine the past five years of performance to understand both strong periods and more difficult ones.

Those moments often reveal more about leadership than prepared answers ever could. We can ask specific questions about what happened during challenging periods and understand how the leaders navigated those situations.

In many ways, the diligence period becomes the most effective interview possible. Over the course of several months, we see how leaders behave, how they communicate, and how they respond when real challenges arise.

Inbound Deals

We keep it simple. For one thing, we know engineering, we're in the business of engineering, we've been doing it for 50 years, so I don't need to use due diligence to acquaint myself with engineering. Like I know what diligence areas are important and I know which are less important, so I can focus my due diligence on the things that matter.

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And I wouldn't say due diligence is ever easy. It's not, it's always challenging, but I can make it relatively smooth versus a, call it a very broad 500 question list where everything is marked as top priority. I can make it much more specific. Our initial due diligence is 10 questions. That's it. Here's the 10 items I'd like to have.

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If you have all 10. Cool. If you only have three of 'em, that's all right. I'll make it work too. Just gimme what you have. I don't wanna make it hard for you. We'll work with the information you have. If there's any gaps, I'll call you and we'll try and figure out an easy way to fill this gap. And the other thing we do is everyone we speak to, we give them a list of every single merger that's joined the organization with that person's email and phone number.

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And we say, call anyone you want. Ask them about their experience. Ask them about how it's going for them. Ask them about whether or not we've fulfilled our commitments, whether or not they've grown. Things like that. Don't take my word for it. Call people. Our team members, our legacy shareholders from merged entities are getting called off of time and they answer the questions truthfully and honestly.

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If a potential partner does not conduct reverse due diligence, that is a red flag for long-term alignment and commitment.

We provide a list of leaders from every organization that has merged with us and encourage them to reach out. If they choose not to speak with any of those people, it raises questions about how seriously they are evaluating the partnership.

Those conversations are important. They give leaders the opportunity to ask about the experience firsthand—whether commitments were honored, whether the businesses have grown, and whether there were layoffs or unexpected changes after the merger.

In a one-hour conversation, anyone can say the right things. Leaders may say that their employees matter and that protecting their team is a priority.

But actions reveal what truly matters.

When leaders take the time to speak with others who have already gone through the process, it shows that they are genuinely evaluating whether the partnership is the right fit. The more people they reach out to, the more it demonstrates that they care about understanding the long-term implications for their organization and their employees.

How Fast Deals Move

Sometimes these relationships take years to develop. I often think about a firm in New York City that eventually merged with us. We had a relationship with them for 12 years before they were ready to share financials and seriously explore a transaction.

That example predates my time at the company, but it illustrates how long trust can take to build.

On average, if someone is willing to take an introductory call and there is mutual interest in continuing the conversation, the process typically takes about six to nine months from those initial discussions.

When the relationship starts through more informal interactions—such as meeting someone briefly at a conference—the timeline is usually longer. Many people are happy to say hello at an event, but that does not always translate into a follow-up conversation.

In those cases, outreach may take several attempts before a meaningful dialogue begins. If the process starts that way, the timeline often extends beyond a year, sometimes reaching 18 months or more before a transaction becomes a realistic possibility.

Building trust and alignment simply takes time.

Negotiations

Our approach to valuation is centered on fairness and long-term alignment. We are not trying to “steal” deals or create a large spread between what a seller expects and what we are willing to offer.

Starting a partnership where someone feels taken advantage of is not a good foundation for a relationship that is intended to last 20 or 30 years. If either side feels the deal was unfair, it becomes difficult to build trust moving forward.

We aim to put forward a fair and reasonable offer from the beginning. That does not mean the first offer is always the final offer, but there is not unlimited room to move. It is not a situation where we can simply double the offer if expectations are dramatically different.

The goal is to create a structure that works for everyone involved—our shareholders as well as the leaders and shareholders of the firm joining us.

If both sides cannot see the outcome as a genuine win-win, then it is better not to move forward with the transaction.

We have a strong understanding of market dynamics in our sector. After completing multiple transactions and maintaining close relationships with advisors in the space, we have a good sense of what firms typically transact for.

That perspective helps us determine what is reasonable during valuation discussions.

In some cases, a seller’s expectations may be higher than what the market supports. When that happens, the conversation is straightforward. We explain that while we understand their expectations, we cannot reach that level based on what we believe is fair and sustainable.

Sometimes the best path forward is for the firm to test the market. If their expectations are met elsewhere, that provides validation. If circumstances change, we leave the door open for future discussions.

Maintaining transparency in those moments helps preserve the relationship, even if a transaction does not move forward immediately.

Retrading

We use an external provider to conduct the Quality of Earnings analysis. That gives us an independent view of the financial performance before closing.

If the numbers come back dramatically different from what was originally presented, then it warrants a discussion. For example, if a company says their EBITDA is $10 million and the QOE analysis shows it is actually closer to $3 million, that would clearly require a conversation and likely change how we proceed.

However, our philosophy is not to retrade deals. The goal of diligence is not to chase every last dollar.

Our objective is to ensure the deal is fair and reasonable for everyone involved. Performance matters, and we want to see a strong business from the start. At the same time, we recognize that the diligence process itself can be distracting for leadership teams.

Leaders are often managing their business while simultaneously responding to diligence requests. That can sometimes result in short-term fluctuations in performance.

We are not acquiring a company for the next 12 months of EBITDA. We are acquiring it for the next 20 or 30 years. If there are small adjustments or temporary changes in performance, that alone is not a reason to renegotiate a deal.

In rare cases where there is a meaningful issue, we will address it. But those situations are the exception rather than the rule.

Maintaining this discipline has helped build our reputation in the market. In our industry, it is common for buyers to retrade after issuing a letter of intent. Our approach is different.

If someone receives an LOI from us, they generally know that—unless something significant changes—that is the deal we intend to close.

That consistency has built significant brand equity. It is one of the reasons we receive inbound opportunities and referrals.

The long-term view is critical. Winning a short-term negotiation for a small financial gain is not worth damaging a reputation that drives deal flow for years. The focus must remain on the broader picture rather than on a single negotiation.

Deal Story

A recent example shows how closely M&A can align with operational needs.

We have a large client in Texas that values our work and wanted to expand the amount of engineering they were giving us. One of their requirements, however, is that if we perform engineering work in a specific region, we must have a physical office there.

They have a major campus in Charlotte, North Carolina and wanted us to support work there. The challenge was that we did not have an office in Charlotte.

Our operational leaders approached the corporate development team and explained the situation. The client wanted to give us more work, but we needed a presence in Charlotte to support it. Starting a new office from scratch was not the preferred option, so the question became whether there was an existing firm in the area that could be a good partner.

When I joined the organization, one of my first priorities was building a structured CRM system to track opportunities. I checked our records to see whether we had previously identified any firms in Charlotte that might be a fit. We had not.

From there, I used our sourcing tools to identify roughly 10 to 15 firms in the region. We reached out to about five of them.

One CEO responded almost immediately, which was unexpected but encouraging. He mentioned that several years earlier they had considered a transaction and had even met with our CEO. At the time, they decided not to move forward, but they had made a decision internally that if they ever pursued a deal in the future, it would be with us.

When we reached out again, the timing was finally right.

At the time, the company was structured as an ESOP, which added additional complexity to the transaction. ESOP deals require fairness opinions and involve multiple governing bodies.

In this case, we were working with management, the company’s board, the ESOP board, and the independent firm responsible for issuing the fairness opinion on the valuation. Coordinating across those groups made the diligence and negotiation process more involved than a typical transaction.

Despite the added complexity, the partnership ultimately came together, and the firm joined our organization last year.

The outcome has been positive for everyone involved. The leadership team joined the organization and has had a strong experience so far.

Just as importantly, the relationship has already generated new opportunities. That same leadership team has introduced us to additional firms that may also be good partners.

Those conversations are ongoing, and some of them are progressing well. It is another example of how successful partnerships can create momentum that leads to the next opportunity.

We have completed several transactions with ESOP-owned firms, and those deals tend to be more complex.

ESOP structures introduce additional parties into the process. In addition to negotiating with management and the company’s board, there are trustees and independent advisors responsible for ensuring the transaction meets fairness standards for employee shareholders. That naturally adds another layer of diligence and review.

However, we have built a strong reputation within the ESOP community. Many engineering firms operate under ESOP structures, and over time we have developed credibility in that space.

Organizations know that when they engage with us, the process will be fair and reasonable. They can expect a well-structured offer that aligns with what fairness opinion advisors are looking for and supports the long-term interests of employee shareholders.

CEO Engagement During Integration

When I first joined the company, we had around 1,500 employees. Today we have roughly 5,000, so the organization has grown significantly over the past few years.

Early on, I remember discussions about how merger announcements were handled. I was told that the CEO personally visits and meets with every employee from the firm joining the organization. At the time, I questioned whether that was the best use of his time. As a new employee, I assumed there were more urgent priorities for a CEO.

It only took one of those meetings for me to realize how important they are.

Our organization is fundamentally a people business. Without our people, we have nothing. When the CEO takes the time to meet employees directly, it sends a powerful message. It shows that the organization recognizes them, values their contributions, and is committed to their success.

I have participated in many of these meetings since then, and they have become one of my favorite parts of the job. The conversations are genuine. There is a lot of laughter, and sometimes people share vulnerable stories. Occasionally there are emotional moments as well.

What consistently emerges from those discussions is a growing sense of respect among colleagues. People begin to understand each other on a more personal level.

Leaders from the newly joined firms often tell us how valuable these conversations are. They frequently learn things about their own team members that they did not know before.

Someone who has worked for them for 15 years may share a personal experience or challenge that has never come up before. Those moments help people see each other as individuals, not just coworkers.

They reinforce the idea that everyone is navigating their own challenges while working toward shared success. The result is often stronger connections across the team.

As the organization continues to grow, the exact format of these meetings may evolve. There may eventually be limits on how they can be conducted at scale.

However, the underlying principle will remain the same. Creating meaningful connections with employees is one of the most important aspects of onboarding and integration.

These meetings have proven to be a powerful way to build trust, strengthen culture, and help new teams feel genuinely welcomed into the organization.

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