|
ExecutiveBiz: Tell us about your recent award at ACG and what that meant to you?
Chris Torti:
I was very surprised and honored that we were presented with the award. It’s been a tremendous year, with the IPO, acquisitions of Morgan and Techrizon and making Fortune Magazine’s “100 Best Companies to Work For” list.
ExecutiveBiz: What is your title at Stanley?
Chris Torti:
Senior vice president. I am on the corporate development M&A side of our business.
ExecutiveBiz: So in terms of M&A activities what is the ideal profile or what is it that Stanley looks for in any deal?
Chris Torti:
Historically, we have been an organic grower first and an acquirer when the right opportunity is presented. We have approximately a greater than 25% growth rate going back over 10 years. That’s a compound annual growth rate. So when we are looking to acquire, it’s because we want to get into a niche market or bring niche capabilities to our existing clients. Prior to our most recent acquisition of Techrizon, we closed a transaction once every two years, each adding approximately 20-25% of our revenue base. An acquisition at Stanley is an all-hands-on-deck, everyone participates, companywide event. Since going public, we have positioned ourselves to handle acquisitions of varying size more frequently than once every two years. In addition, with regard to our latest deal, Techrizon wasn’t represented by a banker but was rather a company with which we had partnered for a long time. I think you may see us do a lot more of these types of transactions and more frequently now that we are in a better position to handle the integration of the deals.
ExecutiveBiz: Can you describe one or two key things for a successful integration?
Chris Torti:
Culture fit and a management team that’s willing to step up are our number one and number two requirements to even to get in the door with Stanley. Business metrics such as recompete rates and historic growth have to be at least at Stanley’s level. We are not looking for fixer upper properties. We are looking for the highest quality company we can buy. When it comes to integration, what we do is a little bit different from some of our peers. We thoroughly look at both companies and pick a point in the future to merge them together. We don’t walk through the door and start putting up Stanley signs. At the same time, we don’t go to the other extreme and permanently leave the company alone as a subsidiary to operate independently. We take our time, typically six to 12 months and blend the two organizations together to come up with a new Stanley.
ExecutiveBiz: In terms of what’s going on in the government contracting M&A arena, what are some of the trends you are seeing that you didn’t see last year?
Chris Torti:
The biggest change that has hit our specific industry is the new small business ruling. This change addresses the credit that the government can receive for its small business goals. The policy change affects acquisition opportunities, and what we have seen in the last three to six months is that many small businesses that have been contemplating a sale are coming to market prior to the effective date of the new SBA rule. So right now, there are a lot of companies for sale. From a buyer’s perspective, companies like Stanley, certainly the strategic buyers, have become very cautious about companies with any type of small business component to them. Has Stanley really changed its approach? No, not really. We don’t have to acquire, so we are not out there to buy revenues. We are buying high quality companies with strong growth potential. The new rule changes our playing field, but it doesn’t really change our strategy.
ExecutiveBiz: Does that drive down valuations?
Chris Torti:
Logically it should, but what we have seen mimics the broader market. Be it the public market, be it the budget cycles of the government, they typically don’t hit valuations and acquisitions until six months after the event. So I do expect a steady decline in valuation, but I don’t expect them to fall off.
ExecutiveBiz: What is something that most people don’t know about you?
Chris Torti:
I started at the company 17 years ago and my first job at Stanley was as a junior accountant. I was the lowest guy on the totem pole of about 30 employees and I have been very blessed and fortunate to have a full career at Stanley.
ExecutiveBiz: How do you keep on top of the latest trends and news?
Chris Torti:
I’ve found the best way to stay on top of industry developments is to maintain contact with my peers and leaders in the industry. In this era of email and conference calls, nothing replaces a face-to-face discussion.
ExecutiveBiz: What is your favorite business book?
Chris Torti:
I like the book “Winning” by Jack Welch, but to be honest, with my hectic schedule and two young daughters, I am a Wall Street Journal kind of guy.
ExecutiveBiz: What is your favorite restaurant?
Chris Torti:
Tallula here in Clarendon is a great stop. Good wine list, excellent service and a menu to match.
For more information about
Stanley, visit
www.stanleyassociates.com.
Interview with Chris Torti conducted by JD Kathuria.
Enjoy this interview?
Digg It!
Check out more Executive Spotlights ...
|
