One of Advent’s first operating partners, Dave McLemore is a powerful advocate for the professional rewards and satisfaction that the role can bring. He has worked on multiple Advent investments in Western Europe and North America including Panta Electronics, Moeller and Boart Longyear.“As an operating partner you’re an experienced manager, you’ve sat in the other guy’s chair. Some of the management team that’s about to be acquired will never have been sold before, so that’s a trauma for them. And they don’t know what it’s like working with Advent – they want to know what that means, too.”Dave McLemore
Dave McLemore is an engineer by training. But during a long career at General Electric he learned that he had an aptitude for fixing businesses as well as factories. Advent came across him when we were looking at a deal with GE in Europe – and while that particular partnership came to nothing on that occasion, the one with Dave blossomed.
Dave was something of a pioneer as far as our operating partner programme was concerned. He has worked on two of our most applauded investments (Moeller and Boart Longyear), and is one of the best examples of how well the system works.
For Dave, the role of operating partner is all about the freedom to make decisions and to act quickly to transform businesses – which makes the support of a trusting, trustworthy, competent and skilled team within the private equity firm an absolute must.
How would you describe your business background?
I began my career as an engineer. My first assignments were in test and measurement, which took me into instrumentation in the late 1960s, and then factory automation and early-era robots.
That developed into fixing factories. The more I learned about automating things, the more I realised that people often didn’t understand the processes in their factories – and that if you fixed the processes, they didn’t need the automation. So after five or six years in the automation game fixing factories at General Electric, that turned into fixing businesses.
How did you first become involved with Advent?
I’d become more or less a turnaround guy and I ended up on assignment in Europe. Advent and GE already had a relationship, teaming up on private equity transactions. I was part of a due diligence team and at the end of one project – we were looking at what became the Panta transaction – GE decided it wasn’t a risk they wanted to take. But I liked Advent and they liked me – so we did the deal.
What has been/is your role as an Advent operating partner?
The operating partner role evolved as a result of the Panta transaction. Over the course of that two and half years, I developed a closer relationship with Advent and one of the thoughts when it was over was that it would be good to have a stable of people around who can help look at transactions, evaluate them and if need be move in and run the companies.
With which Advent investments have you been/are you involved? In what role(s)?
In Moeller, Advent had two operating partners – myself and Uwe Alwardt – and initially both of us were going to work on the supervisory board. At the last minute we decided that the gentleman who was supposed to be doing the restructuring for us wasn’t going to make it – so I ended up with a “real” job.
I had a single focus: close down a €400m-a-year business as quickly and painlessly as possible. The theory was to take the working capital out and use it to pay for the restructuring of the rest of the group. So Uwe focused on the business, and in particular the management team; and I focused on closing 15 or 16 manufacturing facilities and 30-something sales offices, reducing the workforce from 12,000 to 8,000. We made all of that happen in a short period of time.
At Boart Longyear, I wore both hats. That was possible because we had an excellent CEO and we brought in a really good operations manager to put together a global organisation and pull off the restructuring.
To begin with it looked tricky. When we were down to the last two bidders, the other private equity bidder walked away because they didn’t believe the management team could pull it off. We more or less agreed with them, but we thought we could get a management team in to make this work. Our experience in doing this kind of project mitigated the risk and we were able to pull it off again.
In both cases you had the complexity and risk of restructuring; Advent’s global reach and operating partner network gives them the confidence to make those things work.
What have you enjoyed most as an Advent operating partner?
Watching the transformation of Paul Brunner [Boart Longyear’s chief executive]. Here was a guy with a good education, but he really didn’t know how to be a really good CEO. To watch a successful 50 year-old guy learn at the speed that he learned and turn into what I think is a world-class CEO – that was a pleasurable experience. You know, most 50 year-old people are through learning, but we fed him with a fire-hose and he just took it on.
What has been your greatest challenge?
Early on, the challenge was learning how to work with Advent! At that point, there wasn’t a lot of structure as to what an operating partner was, you were kind of on the outside. Initially that bothered me – later on, I came to see it as an advantage because I didn’t have to get involved in things that didn’t interest me. Humphrey Battcock [one of Advent’s managing partners, based in the London office], my principal contact, was great – but there wasn’t a structure you could put your hands on.
Over the years, Advent and myself and the other OPs have evolved good strong relationships. We now get invited to the worldwide deal team meetings, we’ve got exposure to more people and we’re doing more work with the investment committee – there’s more focus and structure.
What advice would you offer someone thinking about becoming an Advent operating partner?
As an operating partner you’re an experienced manager, you’ve sat in the other guy’s chair. Some of the management team that’s about to be acquired will never have been sold before, so that’s a trauma for them. And they don’t know what it’s like working with Advent – they want to know what that means too.
So there’s a lot of value add there: putting management at their ease and explaining that these are people you can work with – and you don’t have to keep looking over your shoulder. As long as you’re focused on the job, Advent truly is your partner.
You should also hit the ground really hard at the front end: it helps set the cadence for the new thinking you want in the business. It’s a sense of urgency you can bring, it’s the idea that we all love this business, but if we’re going to make it great, let’s do it today rather than tomorrow. Once we’re all agreed that there’s something to be done, there’s nothing in the way of getting it done except for your own energy.
What does it take to be an effective Advent operating partner?
There’s a big difference between success in a big company like GE and making it on your own – so you need to have the right experience. Craig Kipp, whom I brought in as chief operating officer at Boart Longyear, is a good example. Here’s a guy that GE dropped into Hungary and said, “find a place to build a factory and start making turbines.” He figured that all out in 18 months. That’s the kind of guy you want – someone who doesn’t need a lot of structure around them. If there’s something they need, they figure out how to get it. That takes real energy.
Experience helps, but self-confidence is a must. You parachute in and you’ve got to figure out what to do, and quickly. You also have to believe in the team that you’re working with – you can’t always be looking over your shoulder. If you’re in South Africa and the investment committee is in London and something falls over in Ireland – you’ve got to be able to trust that everyone is doing the right things. And you’ve got to be independent.
Why do you choose to work with Advent?
It’s all about trust.
I’ve had experience with other private equity firms: while they had bright people, other private equity firms often tell you what you want to hear. If they say “I need you to move to Russia and you’re going to be a key player in the team,” knowing that they’re only going to need you there for six months and then they don’t have anything else for you… well it doesn’t engender trust.
The diligence that Advent provides, and the accountability that they hold themselves to on these transactions, is healthy and it makes you as an operating partner feel good about the commitment you’re making.
Advent is a really high integrity group, the quality of the people you work with is really good. They feel right: they’re formal but not stuffy; they roll up their sleeves and get their hands dirty when they need to; and they don’t panic.
Actually, that’s really important. Not all these deals go the way that you plan – in fact, almost none of them does. There are always a couple of surprises, but Advent doesn’t panic. They work with you. As long as you’re still headed more or less in the right direction and they’ve got some faith in you, then they’ll just work it out. It’s just another problem and you’ll solve it, then move on.
Right now in my career I have choices – and I choose to work with Advent. I don’t have an exclusive agreement with Advent – but I work with them exclusively.