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private equity
john larkin
private equity firm
acquisition targets
equity advisor
string of words
full attention
familiarity
million dollars
ceo
A Private Equity Initial Contact Checklist
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I had just dialed the first number on my list of acquisition targets. Today I was a private equity advisor. It was my first day on the job. My heart was racing as I imagined my conversation with the CEO of my first conquest. The phone was picked up after the first ring.

“Hello, Memorial General. How may I direct your call?” The breath would not leave my chest. I dug into the depths of my brain in an effort to remember how to speak let alone breath.

“Hello?” I was asked again. This time the air came, and with it a string of words,

“Hi, my name is J. Pullman and I am a Private equity advisor. I representative of Mirandello investments which represents a private equity firm out of Chicago. I am wondering if you all are interested in a partnership, or even a total buyout by the organization that I represent. It may be possible to keep your leadership…that is if they are deemed appropriate. “ I did not want to come off too strong to one of my future employees. “So basically we would be bringing some money…(I muffled a nervous laugh), well it really could be as much as one hundred and twenty five million dollars.” I let that sink in a bit. There was no immediate response. How could that be? I had just delivered a near seamless presentation about being bought out by a huge and powerful private equity firm.

“Sir,” she began meekly. “Is there someone I could connect you to? I am only an operator here. I don’t really make those decisions.

“What?” I was not sitting at full attention. “Ah, yes,” I tried to build a recovery.

“Could I speak to your CEO,” I checked my notes. “A Mr. John Larkin?

“I will connect you now.” “Thank you,” this time I was meek. “No trouble, sir.”

“Administration.” I again could feel my heart beat in my chest.

“Yes, I would like to speak to John.” Familiarity on my part would get me past I hoped.

“And who may I say is calling?” The voice sounded like it belonged to a middle-aged woman of dashing looks. A bit of grey in her hair, but not too much, and she probably kept herself in great shape doing Pilates or some other highbrow exercise routine. I imagined her feet were perfect. I have a thing for feet, so this is one of the things I always picture. People I like will have nice feet. Those that don’t will have feet akin to a Neanderthal-combined with a sloth.

“Tell him J. Pullman of Mirandello Investments.” I had to get focused or John would know what I was thinking and dismiss my call as that of a lunatic.

“Does he know you, sir?” Her voice was like velvet.

“No, ma’am. No he doesn’t.” “I will see if he is in, sir.” I knew that she would be looking from her desk through a door to his. I imagined that he was sitting there listening to the call and shaking his head no. I knew I needed to have a little more gas to my delivery, so I quickly added, “Tell him I represent private equity.

“Yes, sir.” The line went quiet. I waited.

I lost my job six weeks prior. I had been the executive at a local hospital. I was successful on any objective scale. The facility made money, where it had not in the past. The patients were “very satisfied” with their care as was now becoming the mantra for the new Medicare Value Payment system. the doctors thought I was forthright, helpful, and able, a regular boy scout, and lastly the employees, all 542 of them that I knew by name, thought I was doing my job. On top of that, I considered myself a nice guy. I genuinely cared for my facility, the employees, the patients, and doctors. This may seem like the right way to do business, but the folks that ran the facility deemed me, “not a fit,” and I was let go. They gave me a bit of a severance package (nothing to brag about), and sent me on my way. I was not, or have ever been, bitter about my firing. I never felt as though it would be worth the energy. Now, however, four weeks from being employed, and attempting to buy a hospital that was not even listed for sale, I missed my old job.

“I am sorry, sir.” The line came alive with the velvet voice. “Mr. Larkin is not in. Could I take a message?”

“Yes,” I said. I spelled my name and newly fabricated investment company, and told her to “please” have John to call me. I thanked her profusely for her time, thanked her for all of her efforts (Perhaps she would remember me as the nicest voice she spoke to that day) and bid her goodbye.

I was filled with immediate regret for not getting her name or direct line number. I reviewed my to-do list and was relatively satisfied with my first call, even though I had forgotten to get her e-mail address. After all, this was only the first call, and I had been coached that it would take about 11 calls total to get through. This is from cold-call to conversation, with the calls being spaced out evenly every two to three days.

I wiped the sweat from my face, and looked at my list of 100 identified companies from my list of related industry segments. These were healthcare businesses that fit my criteria of having at least a five million dollar EBITDA (Earnings before Interest, Taxes, Depreciation, Amortization) and100 million dollars in gross income. I would be responsible for improving their operating margin by 30 %, but this was something I felt that I could do. After all, I did have a twenty-year history of start-ups, mergers, take-overs, and leading organizations to new levels of profitability and performance. It’s just that I had always done it for a company before, and not for myself. I took a deep breath and looked at my list again. I knew that I had to get my calls going to get any response. It was not that I was shy or afraid it was just that I felt in new territory. I would make 20 calls a day to my selected targets. I would talk to secretaries and get to know them, I would gain trust, my name would be familiar to the CEO, and finally after calling enough to know that I would call again, I would get a response.

A response was only the first part of the orchestration. The next was to actually speak with an interested party. Non-disclosure agreements would need to be signed and then actually looking at the numbers to see how I could improve profitability. I have Six Sigma experience and I have a history of successful turn-around situations I told myself to build confidence for the next call. I could do it.

“One in a hundred chance,” I was told. “One in a hundred. “

Ninety-nine more first calls to go, an average of 11 follow-ups, 1,100 calls for one to go through, the ABC’s of private equity initial contact, and this is only the start of the conversation. This new life was going to be exciting even if it never happened. After all, to merely call myself a private equity advisor had been on my bucket list, and now successful or not, I could cross that one off.

If you know of a company that meets these criteria, please let me know. I would be happy to unsuccessfully try to acquire them.

Thank you for reading,

J. Pullman


Street Talk

This could go into The New Yorker. It has the tone of a informational piece but is ripe with the nuances of the complexities of human behavior in the world of money. It is a great read! William P

Reply
  about 1 decade ago

I am not sure about the standards of conduct for commenting on articles that you have submitted, but thank you Street Articles for publishing my first article. I am attempting a new endeavor and appreciate the chance to write and submit. J. Pullman

Reply
  about 1 decade ago
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