All else equal, PE firms prefer operators with well-rounded M&A experience – as both a buyer and a seller. But experience is only half of the equation. Executives must showcase their M&A intangibles during an interview to advance toward an offer.

Leadership Evaluation Criteria

Inorganic growth is a key investment thesis element of most PE-backed deals.  Therefore, sponsors will usually show a strong preference for leaders who have M&A experience.  Most sponsors prefer candidates who have led M&A exits and add-on acquisitions.  However, for consolidation deals, integration experience will be favored over exit experience.  Similarly, exit experience will be favored for deals that are primarily betting on organic growth.

M&A experience accumulated under private equity ownership can be preferred, especially a winning exit.  However, earlier career add-on experience in a non-PE setting will be equally valued by a sponsor if the executive can demonstrate a rigorous integration process.  Rob Huxtable, Partner with Falcon, shares an important wrinkle: “Sponsors are looking for executives who go beyond integration synergies by unlocking commercial upside through cross-selling and other growth levers.”

Overall, sponsors tend to rank M&A experience in the following way:

  • The gold standard: Candidates with both buy and sell-side M&A experience. These are candidates who have led both the acquisitions and successful exits within a PE-backed environment.
  • Secondary: Candidates who can demonstrate successful PE-backed exit experience despite a lack of buyside M&A experience.
  • Tertiary: Strong add-on integration experience in both PE and non-PE settings
  • Fourth: Candidates with non-PE backed experience on both buy and sell side M&A experience.
  • Last: Candidates who have neither worked in PE nor have M&A expe...