Salas O'Brien sources the majority of its deals from internal referrals without offering financial kickers. The primary motivation for employees is their status as shareholders. They understand that successful mergers grow the business, directly increasing the value of their own equity.
For direct M&A outreach, the firm uses a specific sequence: a personal email from the CEO, a follow-up connection on LinkedIn, and, if those fail, using software to identify and attend the same industry conferences as the target for a direct, in-person introduction.
The first 60-90 minute conversation with a potential target is dedicated entirely to exchanging personal backgrounds and life experiences. The acquirer's CEO leads with a vulnerable story to build trust and assess three key traits—commitment, passion, and likability—before financials are ever discussed.
Salas O'Brien provides every target with a contact list of all previously acquired leaders. If a target fails to perform this reverse diligence by calling these references, it's seen as a major red flag, suggesting their stated commitment to their team's future may not be genuine.
The firm looks for leaders who will stay for at least three to five years post-acquisition. If a founder reveals they plan to retire in the next year, the conversation is considered 'three to five years too late.' This signals a short-term, transactional mindset incompatible with their partnership model.
The firm avoids retrading after an LOI unless financials are proven inaccurate. This builds significant brand equity as a 'buyer of choice,' which in turn attracts proprietary deal flow. They view this long-term reputational benefit as more valuable than saving a small amount on a single transaction.
Instead of using behavioral questions in initial calls, Salas O'Brien views the entire three-month diligence period as the real interview. How a target's leadership responds to the inevitable challenges that arise reveals more about their character and working style than any prepared answer could.
The firm requires sellers to roll 20-40% of their deal consideration into the acquirer's equity. This is a critical screening tool that goes beyond financial alignment, acting as a 'put your money where your mouth is' test to ensure sellers genuinely believe in the combined company's future vision.
The firm's M&A success, marked by 93% cumulative leadership retention over 55 deals, hinges on preserving the target's operational autonomy post-close. They don't buy 'fixer-uppers,' instead empowering leaders to continue the practices that made them successful, which is as critical as initial cultural screening.