Dough Waiting for "Go"

Folio: The Magazine for Magazine Management, June 1, 2003 by Jeffrey L. Seglin

SMOOTH OPERATOR

Koenig seems as reserved as you'd expect a publicity-shy partner in an equity fund to be. But that reserved nature belies someone who moves fast, someone who holds a Wharton MBA and who pilots a powerful BMW 540i around the narrow streets of Beantown.

"Peggy understands these businesses," says Dan McCarthy, CEO and president of Network Communications. "When she does not understand, she's willing to dig in and learn. She moves with speed." McCarthy, who worked with ABRY to find the Network Communications deal, adds that "from the first communication with the sellers to the close, only 90 days expired. That's an incredibly rapid deal cycle."

He chalks up that rapidity to what he lists as Koenig's personality traits: "Very smart, pragmatic, focused, and respectful of the autonomy of the operator." The latter, translated loosely as "once she applies her brilliance, she gets out of the way," is obviously crucial for McCarthy in his current role. Based on his discussions with one of ABRY's banking partners during his due diligence, McCarthy also knows, he says, that ABRY "stands behind its companies and is not going to let any of them go under water."

Of course, he also recognizes that "if as an operator you're not doing a good job, they're very realistic about that." Being held accountable as an operator doesn't trouble McCarthy. "I've also got a significant amount of capital in this deal," he says. "I've got a lot of risks. She's got a lot of risks.

"One of Peggy's biggest strengths," McCarthy continues, "is that she is very, very clear about what's important and what's not, in terms of deal structure and in terms of return. I want to work with realists, with people who will be honest with themselves about what they see right in front of them. Peggy is very reality-based. I trust her."

Ultimately, perhaps the debate over who is best poised to pounce on deals as they emerge is a red herring. Koenig now knows the real prizes in the M&A battle likely won't come from those that are being aggressively shopped around. "More often than not, the opportunities we end up doing are opportunities that we've pursued ourselves. People do approach us, but we go knocking on doors."