Peer Talk Profile: Travis Posey
When Travis Posey stepped into his role as vice president of Strategy for HSI Sensing, an industry leader in the development and manufacturing of switch and sensor technology, one of his duties was to pursue mergers and acquisitions of other companies. Unfortunately, neither Posey nor his company as a whole had much experience with the process, and they quickly ran into a number of challenges. “After about a year of pursing potential targets and having a couple of deals fall through,” Posey explains, “I went to the board and requested some additional education to clarify our approach.” Once he got the green light, Posey began to explore executive education programs.
Finding the Right Fit
Posey’s research eventually lead him to Chicago Booth and the Executive Education Mergers and Acquisitions class. “Right away I could see that the curriculum was everything that I wanted to learn and exactly how it was going to be relevant to our company.” Immediately upon entering the class, Posey found that his suspicions were correct. “The overall experience was positive right away. I was on the edge of my seat the entire week just soaking up everything.”
Posey was immediately struck by the way the course was structured and how it was equally beneficial to both those who were experienced with the subject and relative newcomers like himself. “Some of the participants had completed over 30 mergers and acquisitions, but they were still getting these “ah-ha” moments. At the same time they were also asking great questions that were completely relevant to myself.” Posey goes on to say, “I almost want to go back and take the class again now that I’ve been through it. I’m sure I’d get something completely different out of it.” But aside from the organization and structure, what really impressed Posey were the lessons he learned.
Just What the Doctor Ordered
When HSI Sensing pursued a merger in the past, they continually ran into a few problems. First, they were never completely comfortable with the value they attached to the company there were considering. “We would get to the point where we felt pretty comfortable, but there was always that air of unknown and uncertainty.” Another major issue was their general approach to mergers and acquisitions. “We were kind of all over the map in terms of the kind of company we were looking for,” Posey explains, “we weren’t sure if we wanted to go horizontal or vertical and as a result we were looking at so many different options at once.” Fortunately, the course had solutions for both of these common problems.
The very first day of the course dealt with a strategic approach to mergers and acquisitions, guidance HSI Sensing desperately needed. “A big message that all the professors hit on was making sure your strategy was well defined and then sticking to it throughout the M&A process,” Posey said. Upon returning from the course, a focused strategy was Posey’s first priority. “Our search is now much more intentional,” he says, “we have a process laid out for us that we built instead casting about in a number of directions."
In addition to a new philosophy, the course also had a number of practical takeaways. The class learned a series of financial evaluation models that allowed Posey to dig deeper into a company’s financials, run them through different scenarios, and make more informed valuations. “I was able to build Excel sheets off of these models and valuate a company within a matter of hours,” Posey says. “After the course we were able to look at companies through these strategic filters and if they didn’t make the cut, we didn’t spend any more time and resources on them.”
Roughly a year after taking the course, all of the lessons and strategies came together. HSI Sensing identified Gensico as a company that fit their strategic model as another manufacturer of electronic components. Their process began in February of 2013, and the deal was closed just four months later. “Everything felt so much more focused and intentional,” Posey recalls, “and definitely much less risky for us.”
Once the company had been acquired, Posey was able to draw on another of the course’s offerings. “At first, beyond getting them into the company, we hadn’t really thought about integration,” says Posey. He received several integration models during the course and was able to craft a distinct process for his company. Due to the pre-planning and strategizing, the integration has been a success. “Our accounting director here likes to say, ‘I don’t want to say it’s been easy, but it has been really smooth.’”
Due to the success of this initial acquisition, the board has given Posey their blessing to pursue additional companies. In the future, HSI Sensing plans to focus on larger companies.
If Posey has any regrets, it is not taking the course sooner. “For anyone even thinking about mergers and acquisitions, I would suggest going through this course first to save them the headache and heartache of trying to close deals without this type of information.”