Having joined ACME Business Consulting just over a year ago from Deloitte, David Ehlen has already made a name for himself at the Portland- and Seattle-based firm, putting his extensive M&A experience to use at the helm of ACME's new Transaction Services practice. Under his leadership, ACME has grown to 50 people, and this yea r is positioned to reach a growth target two times larger than last. Ehlen says the recent flurry of activity in the M&A market is continuing this year as confidence in the economy continues to improve. Ehlen says the practice is aggressively staking its claim in the space, and that it could represent 10 to 15 percent of ACME's total revenue in the next few years. Consulting One on One caught up with Ehlen recently.
Consulting: Heading into this year, M&A activity was starting to heat up. Is that a trend continuing so far this year?
Ehlen: I think we're seeing a continuation of that, whether it's driven by cash reserves on the balance sheet or rising valuations, between those two and some confidence in the economy as well in terms of saying, these are going to be viable things to do over the next 18 months. All of that is contributing I think to a pretty marked rise in M&A activity. It's not that we're looking at explosive growth, I think people are looking at predictable growth. At least we're not going to flatten out or dip down too far. It may not be the run-up we saw earlier in the 2000s but at least it's consistently moving forward and up.
Consulting: What are clients demanding?
Ehlen: In terms of the projects themselves and our engagement, really senior project leadership, and very specific thought leadership in the M&A integration space. How can I execute these types of deals in my environment? In the Portland market we primarily serve, we're strongly focused on middle-market companies, say between 500 million and 2 billion dollars, that's our sweet spot. These are companies that do deals and integration work that looks a lot like the companies that are $25 billion in size because it's a lot of the same movement and machinations. What they're hoping to do is really bring us into the fold and use their team for leverage. Our go-to market model with project leadership is pretty unleveraged, but what they're looking for us to do is really get in and get their team organized and focused on the right things.
Consulting: What's in store for the future of the practice?
Ehlen: To be opportunistic when we can. M&A is deal-driven. Unless you're a conglomerate that you're doing these things every day, doing M&A could be a once in the history of the company type of proposition or you could be a serial acquirer, but there are certain irregular events for most companies. We want to position ourselves to be the first one that our client and market base calls when they're doing this type of deal. I think our other focus is how do these companies prepare themselves and what can we offer them in the in between times? So a lot of our go-to market focus is on what I'd say are M&A playbooks, preparing the team and educating them on what to expect from an M&A and really just upping everyone's game so when they go out and do a deal it can be as effectively as possible.
Consulting: What are some special challenges facing clients these days?
Ehlen: The real issue is that most of the companies that we serve in our clients don't have a deep bench to actually go do these deals by themselves or have the background in doing it effectively. A lot of companies have tried this, I think where they end up is, boy this is going to be the primary challenge of M&A for most companies is I still have to do my day job and all this integration work and planning, so I think if I was to say that's the biggest challenge, we know we have to do things but how do we do them effectively without either backing up a bus of consultants that doesn't seem feasible and really where ACME is really well suited is based on our experience, our structure and preferred project approach. I think what's been beneficial to clients we've worked with over the last year or so in this space is prioritizing and doing the right things, minimizing business disruption and achieving the objectives that are first and foremost on our plate. Another key challenge I think is this information gap between the marketspace and what ACME can deliver. We're really turning up the heat on this service offering and capability. We're spending a lot of time and have dedicated significant resources to getting out and doing the type of business development that builds awareness and makes sure people understand what we do and what we offer.
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