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Dominating strategy always wins out over dominant personalities as Brendan Deely is assessing potential acquisition targets.

One of his biggest M&A regrets is acquiring a company that had a domineering owner, a reality that quickly led to conflict with the acquired company’s employees.

“People who are willing to stay and work with that kind of personality over time are typically not high performers,” Deely says. “We had to rebuild the team over time, and it was a lot more work than we anticipated because we didn’t stress the culture side of the business hard enough.”

It’s one of the few blemishes in Deely’s deep acquisition history. As CEO at L&W Supply, which was owned by Chicago-based USG Corp. at the time, he led 15 acquisitions and helped grow the company from $800 million to $2.5 billion in revenue.

These days, he serves as CEO at Banner Solutions, which was recently acquired by Tailwind Capital.

We spoke with Deely about his approach to dealmaking as both a buyer and a seller.

Be strategic about acquisitions

Acquisitions are typically only as good as the growth strategy that backs them up.

“You can go out and buy a business, but ultimately, your quality of earnings can decrease if you buy the wrong type of business in the wrong market,” Deely says. “A good strategy is having an M&A pipeline that is robust, along with a strong integration process.”

And as Deely learned the hard way, never underestimate the importance of culture.

“If it’s an organization that really has no process, no leadership and just kind of muscles everything through, it’s a hard lift,” he says. “When you have a bunch of different opportunities on the market, why settle for a workout?”

When you’re a growing business looking for targets to augment and build on that success, don’t waste your time on a team that’s not willing to work hard and put in the effort to excel.

“Find the next target,” he says. “If you see something that you’re trying to get into and the company is available, kick the tires a little harder. If it happens this year or next year, find the right one that’s going to really drive your business for the next 15 to 20 years in that market, not a couple of quarters.”

Being owned by private equity, as is the case with Banner Solutions, should not hinder your acquisition strategy, Deely says.

“If we buy your business, you’re part of the Tailwind Capital portfolio, but you’re working with us,” Deely says. “This is the strategy put together by the Banner Solutions management team. If you’re comfortable with that, who owns us or who is going to own us down the road really shouldn’t matter.”

On the sell side

Even if you’re not currently looking to make a deal, it’s always useful to keep an eye on the M&A market to see what’s happening in terms of deal flow.

“You can always not sell your business, but I think it’s just being smarter about your strategic options,” Deely says. “If this is ultimately the biggest way as an owner to create generational wealth, I might want to learn more.”