Partnering Before Purchasing: How Booz Allen Wins Proprietary Deals Early

Most buyers treat pre-LOI like a transaction. The best ones treat it like a partnership. As one member explained, I prefer the M&A Science Intelligence Hub over Google and generic AI because it's grounded in practitioner sources—people who've actually done this. When you're navigating early relationship building with the seller, the Intelligence Hub shows you how operators establish trust, structure partnership terms, and set expectations before the deal even starts. How do you signal you're not just a buyer, but a partner who understands their business? The Intelligence Hub compresses years of relationship-building experience into minutes. It's how you move from cold outreach to collaborative diligence. Professional members get full access at mascience.com/intelligence. Again, that's mascience.com. If you're on the buy side, you already know most M&A tools aren't built for you. They're built for sellers, and it shows. That's why we built Dealroom. It's the number one platform for buyer-led M&A, designed to help you lead the deal from pipeline to diligence to integration without the chaos. You get real-time project management, AI-powered contract review, templated deal rooms, and live collaboration all in one place. No bouncing between tools, no duct tape workarounds, and definitely no hidden fees. If you're serious about executing smarter, check it out at dealroom.net. Now back to the episode. I'm Kisan Patel, and you're listening to M&A Science, where we talk with deal professionals and learn valuable lessons from their experience. This podcast focuses on stories, strategies, and what actually happened during M&A deals. Hello and welcome to the M&A Science Podcast. This podcast is part of a mission to rethink how M&A is done. The old school sell-led approach, it's dead. Buyer-led M&A is about strategy, alignment, and efficiency, putting value creation at the center of every deal. And let's be real, it's not just about closing the deal, it's about making it successful. We uncover what truly works in M&A by learning directly from the best I'm your host, Ihsan Patel, founder and CEO of M&A Science. Today we're joined by Chrissy Cox, vice president and head of corporate development at Booz Allen Hamilton, traded on NYSE under the ticker BAH. Chrissy leads M&A strategy for this 112-year-old technology powerhouse that's gone under a remarkable transformation from traditional management consulting to an advanced technology leader, building, partnering, and investing in areas including AI, cyber, quantum computing, and unmanned systems with nearly $12 billion in annual revenue and deep roots serving government and commercial clients. Booz Allen has been a longtime industry growth leader and has made several strategic acquisitions under Kristi's leadership. What makes her story particularly fascinating is that she's been instrumental in building the corp dev function from the ground up over the past decade, and she's done it twice at Booz Allen, having returned as a comeback kid after gaining M&A experience at Ingility and Renaissance Strategic Advisors. The Association for Corporate Growth recently recognized her team as Deal Team of the Year for public companies in the National Capital Region. Today we'll be discussing strategic approach behind their culture-first M&A philosophy, and their shift toward proprietary dealmaking and partner-first approach.

Chrissy, how you doing? I'm doing great. Thanks for having me. Really excited to be here.

Thank you for taking a break from doing deals to have a conversation with me.

I love this break.

Can we kick things off with a little bit about your background?

Really didn't start in M&A and started on the market side. About 10 years into my career, I got my MBA at Duke and went to Renaissance Strategic Advisors where that's where I got into the world of M&A. I didn't know what I was getting myself into, but I loved it, really supporting strategic clients and private equity clients in the aerospace defense and government services side. And then I transitioned to Ingility Corporation on corporate development team and loved that transition just to be able to do end-to-end deal-making, not only from sourcing, but also to the integration. And then I came back to Booz Allen about 10 years ago.

That's the key thing with your story is that you left Booz Allen, you got M&A experience at other organizations, and then came back to build out the corp dev function. What are the key things that you saw from the outside that you knew that you could bring back into Booz Allen?

What I was really excited about coming back was at the time it was around Vision 2020 strategy and really transforming the organization from a consulting firm to advanced technology leader. And now we're really focused on our Volt strategy and doing that all over again. Why I came back was around the culture and the values of the organization and a market leader, but I was really excited to really build a corporate development function. Historically, most growth had come from organic growth and we really hadn't used the M&A muscle. We had done a few acquisitions here or there, but as Booz Allen was thinking about the strategy going forward, they knew that M&A had to be a key part of that strategy to get to where we wanted to be and transform.

Easier said than done. I feel like I talk to a lot of corporate leaders and especially, actually I just talked to a friend before this call who's on his third assignment to build out a corp dev function from scratch. And you've also worked at a very well-established company, over 100-year history, and you're standing up M&A function. What were the challenges? Like, what were the top challenges? You had resistance to get that muscle and culture of doing M&A in the organization?

M&A was a new muscle for us. As you think about it across the lifecycle, so from standing up a diligence function with functional teams, how do we think about diligence? I know when I first came in, a lot of our diligence was being done through trackers, and it was like, we have to get on a call with the other side. We have to like press with each of the functional teams and actually have conversations to really dig in and understand. You cannot do M&A through trackers or through just redline turns. The other challenge was really how do you build the pipeline that makes most sense? And we're really focused on actionable targets that expand our strategy going forward. And how do you cultivate those relationships so that we're the preferred buyer and can either win in auctions or can go proprietary?

So it's like two parts. There's essentially deal readiness, get the team ready to actually take on the organization you're going to bring in. And then developing the pipeline. Tell me more about that deal readiness. I feel like this is the biggest challenge for a lot of organizations, and you get the push versus pull that you're really pushing folks. Maybe they're hesitant, they sort of like, ah, I already got enough things to do. Now you want to do M&A? How did you get people on board and actually get them ready?

Well, it comes from our top, from our leadership, making M&A a priority. That helps a lot. Giving focus and attention. The other part of it is that M&A is a long game and understanding that if we're not cultivating these relationships, if we're not really thinking about our pipeline and targets, quite frankly, if we get a banker inbound for a company and we've never heard of it before, or it isn't part of our inorganic strategy, it's probably too late. We look at hundreds of companies a year. We know what our priority targets are. How do we really think about cultivating those relationships or finding like companies so that when they are actionable, we're ready to move? It's just become part of the cadence of our market leaders, which has been the muscle change in M&A over time.

Leadership has to really advocate it, make it very clear to the organization as a whole that this is going to be a core part of our strategy to do acquisitions. You're absolutely right, because I feel like if you don't do that, that's when you get What's the resistance and why are we doing this? And then you're really pushing. So that's got to be a key element. I take it you may have a range of experience because obviously you have M&As of practice within the organization, but in terms of getting the muscle developed where it's almost like working out at the gym, you got to get your reps in to actually be able to do this. How'd you manage that? Or you may have folks on your team that didn't have any reps in at all, versus you're able to pull in resources? Like, what'd you actually do to burn your learning curve?

I think we have a mix, like on the corporate side and on the corporate development team itself, we really hired from the outside for people that had different perspectives and whether it was ex-investment bankers, ex-consultants that had been around deal processes. Our legal team that supports us all have extensive M&A experience from the outside. So we brought in the outside experts and then working With the market leaders, it was really around reps and cultivating relationships and orienting teams to what the playbook looks like. And some of it just takes reps. Like the first time they do a diligence process, everything's new, but the second time it's, oh, okay, Kristi's going to ask for this next. This is what we're going to need to build a business case to really get through diligence and really start thinking about an integration strategy and plan. We're really focused on where we're working with our market leaders on inorganic strategy. Not everything's a priority inorganically for us. There's portions of our strategy that are a priority for inorganic investment, and those are the market leaders we're working with on a weekly basis, cultivating those relationships and building reps and muscles.

Get the reps in, your team's naturally gonna start building out playbooks and templates because if they know they're gonna do more deals, they're They want to make it easier. Let's talk about building the golden pipeline here. Everybody's always trying to be, especially now, every organization is working on proprietary pipeline. Also, I want to clarify too, because you mentioned if they come through a bank process and you haven't heard of it, that's a problem. In terms of deals you participate in now, like what's the range or percentage between bank processes versus proprietary?

It varies. I would say. 50/50, but I want to caveat that with a lot of times with the bank process, they're coming to an auction, but we've already heard about them. We've already started cultivating those relationships. So we're not going in blind going into the process. So that's where we're spending the majority of our time. If we're getting a bluebird in and haven't heard of an opportunity, we rarely spend time on those companies. I would say less than 20%. Are things that we've never heard of and are taking the first meeting. But back to building the pipeline, we really work closely with our market leaders to understand their strategy and gaps and really focus on where do you want to buy, build, and partner. What comes out of that are hundreds of potential targets across the firm that we really are being thoughtful around of, hey, this is a great inorganic target that's going to lead progress in certain areas of technology, and we have gaps that we really need in-house that we need to buy? How do we start looking at companies that have those capabilities and build a pipeline around those companies? Because we can't just have a 1-inch deep pipeline. We need many targets to come through. That's really where we're working with those business leaders to cultivate relationships, understanding cultural fit, and understanding if the capability is really going to help leapfrog us where we want to go.

We gotta work with the business unit leaders, understand what their strategy looks like, and they've probably identified a number of opportunities. So that's sort of a natural lift right there.

I would say that a lot of our pipeline comes directly from business leaders, and then we're also talking to the bankers and seeing what's out there, what they think is actionable. Obviously, PEs are natural sellers as well, so we know what's in their portfolios and what fits with our capabilities, and we bring that all together to create one pipeline.

Do you do your own sourcing on top of that? We do. How do you approach that? Do you just have some AI that does that for you these days?

We do leverage AI. Look, in the market that we're in, we're able to understand there's a lot of federal procurement data that is out there on what companies are participating in the federal marketplace. That's one area that we look to source. In commercial cyber, we're constantly going to conferences, trying to understand what the landscape is, and identifying targets. But a lot of our pipeline comes directly from our business team. They know who to partner with. They know what the up-and-coming companies are that are changing the industry, and they're bringing that directly to us, and we're evaluating that pipeline.

And you want that because ultimately they got to own that deal through close. Absolutely. You want that, that— so if they bring stuff to you, that's actually good. You got a true champion. Then you have— you supplement it with your own in-house research, and then you network with the bankers. Which shouldn't be too hard because you're activity, so they, they want to know you and you introduce yourself. And then the private equity firms, how does that work with the PE firms? What's your approach to networking with the PE firms?

We have spent a lot more time across all the PEs that invest in our space to understand their portfolios and also share with them where we're interested in and what we're trying to build. It's a really an open dialogue, two-way dialogue, whether we're working with their portfolio companies and partnering with them, Or we're going directly to the PEs to better understand what is in their portfolio, where it could potentially fit, and sharing our strategy with them. They're an important partner to us. We've bought from financial sponsors. We've also sold to financial sponsors too when we've divested companies.

Your outreach is, hey, let's connect and compare notes. We're obviously in the same space. Get to know each other, build a relationship, and then see where things go.

I feel like the M&A community in the aerospace defense and government services space is a pretty small community, and we all cross paths and we've all worked together through various venues.

The best deals come from business unit leaders, I take it.

Absolutely. They start with the business unit leader, and they're the ones cultivating those relationships and building the trust with the founder. Most of the time we're working with these companies before we actually start an acquisition conversation. I want to talk more about that partner-first approach.

One of the deals I know we talked about before was this Liberty IT Solutions that you told me that was like, took years before you finally acquired them. It was in a pipeline. I wanted to use that as an example too, because a huge part of this is relationships with these potential targets. And it's something that I even find myself falling short on. I've had it before where there's a company I knew I should have like followed up in 6 months, I forgot to follow up. At the end of the year, I hear about a competitor acquiring them, but then I'm kicking myself pretty hard. I want to learn about that, but maybe you can talk about that deal as an example of one that you've managed to get through the finish line, even though it took years.

It's a great example. So our health market leader at the time, who now runs our civil business, he had talked about Liberty IT for years. He had seen them in the market at the Veterans Administration, and what they were doing, bringing digital transformation, low-code, no-code to the veteran mission. Really thought fondly of Liberty and what they were doing, but years before we acquired them, didn't meet some of our thresholds in terms of scale and what they were focused on. But over time, they had really grown at the right scale and had the right technology. I think of M&A as a long game, and this was certainly one of a long game. We had Liberty on our watch list for many years. When we ended up pulling the trigger from a proprietary basis, we were really focused on filling a low-code, no-code digital transformation gap, software development gap in our strategy. There were probably a handful of targets, 5 to 10 that we were focused on, and Liberty was our number one target, and we were able to make it happen. And it was definitely through those market relationships and how well they knew us in the market and how well we knew them and that trust that had been built over time.

Were you partnering beforehand?

We were partnering here and there. I would say with Liberty, we saw each other and admired each other in the market and worked really closely. You're industry friends.

Yes. And then you see each other at conferences and then maintaining the relationship. I'm just curious about this too, of when you've got that deal really actionable, obviously there is this point when you wanted to find something in that space, what did that look like when you approach 'em and really build that, hey, we're better together story, or did it just— was it easy sell?

They were probably in a place in their journey where they were thinking about what the next step was. So it was an opportune time for us to sell that being part of Booz Allen and having access to broader channels and being able to scale the technology and really the cultural fit around our mission and values. I remember when we were at the integration kickoff with Liberty, we put their core values next to our core values, and the themes were all consistent, even if the words did not, you know, passionate service is one of our core values. They had a core value that was like passionate service, but called something else. It was just a really unique, great cultural fit. And it was so aligned with the mission on the ground when we bought that. So I don't want to say it was easy to convince them, that we were the right home, because it never is easy. They saw that we were a really good home for the business as well.

That's right. Because you were— it sounds like you're really proactive. Like sometimes I'm always curious, like the philosophy of making deals actionable, where a lot of times you're building a relationship, you pitch the better together story, and then it's wait for them. You want to be the first phone call, ideally before they call a banker in the process. But here in this case, you had a relationship, you've been cultivating it for a number of years. And then you got to the point like, we really need to get something in the space so we can be the market leader. And then you, you sound like you're much more proactive at that point to pursue them. You know, it's like there is actually some convincing involved.

Yeah. And look, in the case of Liberty and a lot of founder-led deals, obviously value matters. When I think about founders' companies, it's their baby and they want to know it's going to a good home and that fits in with the strategy and their vision and ultimately what's going to end up with it. And our market leaders really had a vision for how it fit into our broader health strategy and our broader low-code, no-code digital transformation strategy. The Liberty founders and their leadership team found it extremely compelling in terms of where we could take the business together, where I don't think they would've been able to do it on their own, and I'm not sure we would've been able to do it without an acquisition.

What didn't go so well in that deal?

What didn't go so well? It was during COVID So it was the first deal that I did fully remotely. Fully remote. Okay. So it went fine, but it was definitely unique circumstance just across everything, like management meetings, all remote, just a different process. So Actually, it was a pretty smooth process considering, but it was definitely, uh, hopefully a once in a lifetime experience.

I'm going to come back and pull more threads on that because I feel like the thing I'm really curious about is the culture side and then onboarding. Like, how do you onboard employees completely remote? But from the other side of the table, if you are that founder and you're thinking through optimizing your exit, Ideally, the strategic is the best path to go. There's clearly, you get the right strategic, you're going to get a strong market value, but you can optimize timelines and really make a smooth transition. I'm curious from that seller's point of view, how do you think through that? Because I feel like oftentimes I hear, we just decide to sell. The board decided to sell. Now we're going to go hire the banker, run an auction process, and try to maximize valuation in a 6-month timeframe. And I want to flip it around from your experience on the buy side, if you were that founder itself, how would you think through planning and executing your exit?

You really need to have a solid understanding of what is your 5-year and 10-year vision and where do you want to take the business? And also understand, can you do it alone or are you really going to be able to scale faster with the right partner? And for us, that's where we're really focused. Some of our acquisitions that are founder-led, it's the right timing for a founder where they see the opportunity that Booz Allen together can be a platform to scale their business and have broader reach for their capabilities and their talent. That's one thing that a larger business can offer is more opportunities for talent to really be able to be driven through the business. I'll say with Liberty, their talent is across the Booz Allen business now, not just in the VA. That's been great to see that really come to fruition. I get that.

There's a sort of— here's this vision, there's a point that you can accelerate it partnering with the right strategic partner. I'm wondering from the founder's point where you want to optimize valuation, there's almost this view of, okay, I know I can do this alone to get to this far where I have confidence I'm going to keep this high growth trajectory. And then there's got to be this point because if you hold on too long and your growth starts slowing down, now all of a sudden valuation and everything works against you. So you have to have some high level of confidence. How do you think through that? Because they've seen that before where some of these companies are like, whoa, you think you sold way too early because the company went 100x after they sold. I don't know. That's where I'm always curious.

I think about it from a buyer side, maybe a little bit more. I've never been a founder, but from a buyer side, when we're seeing companies, we really want to see that we believe in the trajectory and that they have a history. So a lot of times you'll get these books with hockey sticks, They're about to hit an inflection and it's like, well, you probably need to wait until you've hit some of that inflection and have seen some of that to optimize value and also optimize strategic interest.

So it's like a balance between, hey, we have a strong history of trajectory and then we still have this future potential. I feel like that thing of if you hold it too long where it's like, okay, their future looks a little grim now. We've majority market share already. Things are obviously going to slow down, then you probably see the same thing and then it's counters. So I feel like there's got to be an in-between point to optimize for value.

Yeah, absolutely. At least for the companies that we look at, a lot of times they are hitting a threshold of scale where to get to the next level, they're really going to need to invest in more infrastructure and more business development, et cetera. That's where it might make more sense to have a strategic partner. They have the momentum they need from the client, but that they need more channels to market, et cetera.

Going back to the culture, you've walked away from deals where— this is the thing I truly struggle with— you walk away from deals where the finances, the strategy, the business case really looks good, but then you're like, the culture doesn't fit. Can you walk me through, like, what does that valuation look like? What are you really testing for before you make that decision that culture is the breaking point?

I think that Cultural fit starts from the beginning of us cultivating relationships. Every single interaction that we have with a company, we're testing, is this the right cultural fit? Are they really motivated by mission? Like we're motivated by mission. Do they have a set of core values? Do they align with our core values? And we're constantly testing that in processes. Most of the time we're working with these companies before we get to an M&A process. So even testing it there. When I think about deals we've walked away from, they're not cultural fit. I have one story that pops in my mind. Gosh, it was probably almost a decade ago, and we were in a management meeting, super interesting company, super interesting capability. But you, towards the end of the management meeting, we asked a question around, hey, can you talk to us about your core values and culture? And the CEO made a comment and was like, oh, core values. We have them somewhere on a wall. In a cafeteria, and that did not align with us. We live our values every day. We walked out of that meeting and that was the end of us moving forward in the process. And so what I think he thought was a joke, it just did not align to a good cultural fit for us. I like that.

You were pretty direct, like talk through core values because you should have— if you truly embodied it, you'd be able to clarify it. Actually, I'm going to try that. I had a deal where this CEO, it took me a while. It took me a few meetings to realize this only thing he cared about was himself and the outcome for himself. You kind of realize like that's not going to be a good transition when things are said and done. Then I did a reference and found out that was exactly the case for the last deal he did.

Yeah, we're pretty direct about it and then constantly testing every diligence call. We don't necessarily talk about core values each way, but every interaction you can assess cultural fit.

I mean, I like that direct question, talk to me about core values. Is there any other questions that help surface a sense of it or just things you observe and look? That's why it goes back to the remote thing, because for me it was always going on site. Like it was going on site and you just walk around the office and you could absorb what that culture's like. Is it buzzy? Are people moving around? Are there water cooler conversations or is everybody just super structured? And you can tell like there's walls everywhere.

The site visits are so important. Getting in a room with the other side is so important and really understanding. We do a lot of dinners, really getting to know the team better, to also assess the management team and whether it's a good cultural fit. Also for them to have an opportunity to get to know us and our culture as well. We get a lot of questions around that. Every interaction you have with the other side, you have to be thinking about and assessing culture. And cultures are going to be different, but how do you work through the change management to have a successful integration and drive value? I like the food and alcohol approach.

I feel like that sometimes surfaces some interesting information.

Having dinners with management is always worth the time and better able to really understand that leadership team and what motivates them. Culture's driven from the top. Our belief is that if the culture and values and mission is at the top, that's probably part of the entire company.

Do you ever sense like there's definitely a strong cultural difference, but still compatibility. Sometimes I look at a company page and you can tell every employee's hardcore aggressive sport, they're into some extreme sport, and that's a core thing of their culture. I look at our company, I was like, no, we do pickleball and that's it. Have you ever come across that where it's, whoa, there's definitely extreme, but I can still see this working out?

Yes, there's definitely different nuances to culture and what fits and what doesn't fit. For us, that gets back to, do you share the same core values and do you share the same passion for mission? There are going to be different cultural nuances, even thinking about different geographies around businesses and different business units. There's different subcultures in a culture. For us, really thinking about the same passion for mission and the same core values tend to be a good cultural fit, even if it's different subculture.

When you think of an organization, there is like subcultures within the culture, like different departments could have different cultures. Have you had it where you, you get to LOI, you sign the LOI, and then you start identifying your issues?

What we really focus on as we think about integration planning and change management is really identifying, we call it the secret sauce of the company. And part of that is things around culture as well that really drives the value of the organization. And as we think about that in integration planning, we really want to think about what are the aspects that we want to make sure we're keeping and learning from another company, because even as a large company, we absolutely want to learn from who we're acquiring and make sure we're pulling the best of the best. Through our company. The other area that we are really focused on is being transparent. Like, we're not going to be able to keep everything the same as we integrate a company into Booz Allen, but what's really important is transparency around the process and making sure that we are thoughtful around things that make the culture special and drive value.

Tailor the integration plan around the organization's culture. And make sure you preserve and don't break stuff that's important. Yeah. Can we talk about this PAR Government deal that you worked on? Because I got the gist that it's a carve-out of a carve-out, and it's a complex deal, basically. Can you walk me through that deal, and what were some of the lessons learned?

Interesting. PAR Government had been on our list for a while, but at the time, it was a subsidiary of a publicly traded company, PAR Technology. and we were interested and then it became actionable through a process. And we worked with the sell-side banker at the time. It was Baird and we were really interested in most, most of the perimeter. However, part of the perimeter just didn't align with our strategy. We conveyed that we've been working with Baird for years. They were the sell-side on a number of our deals that we've closed. And really worked closely with them of how do we structure something where we can still buy that part of our government portion that we really were interested in. What was unique about it was they were willing to have the conversation and the seller was willing to have the conversation that they were still able— they were actually able to maximize value through the structure. What also helped was the structure itself. They were already— the part of the business we didn't buy was really operating separately already. So there wasn't much overlap between the two businesses, which made it a lot easier to carve out that portion of the business.

You're making it sound too easy. What's like the hard part of doing a carve-out?

Oh, it was, you know, getting to the quality of earnings and making sure you agree with the adjustments and really understanding the cost of that business is always a challenge and making sure you're getting all the assets that you need to run the business. That's really where we spend a lot of time and energy of carve-out.

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We negotiated a transition services agreement and it was a multiple transition services agreements. Anytime you're dealing with a carve-out. It was getting our arms around the assets that were coming with the business and making sure we had the assets to deliver the business is always the most complicated part of the carve-out.

Did things land smoothly?

Yeah, it's been a great deal for our defense technology business. The technology that Park Government brings to the mission has been incredible. We've achieved more synergies than we probably realized we were going to achieve. Coming into it. It's been a really good cultural fit as well. We, from an integration standpoint, tuck that business into our defense technology business, and they've been a core part of our technology stack.

It was worth the pain. It was. You worked through a bank process on that. I know a previous conversation you mentioned that you actually encouraged targets to hire bankers even on proprietary deals. Is that true? Yes. Why would you do that?

We live M&A every day and speak M&A language, know the process, are comfortable with the process, but founders and business operators, this might be the only deal they ever do. It's a new process to them. They still have to run a business and they still need to grow the business for a successful deal to happen. We rely on our advisors and we find that typically when a banker is brought on the other side, the process is much smoother. They're the ones that know the playbook, they're the ones that can help guide the founders around what do they need to do for diligence? What is market? Help them with their data room, help with the negotiation. And I think as you get to critical points in the deal, deals can become emotional, especially if this is the founder's baby, but to really help them navigate the emotion and getting to a signed deal.

Wouldn't you be worried that it turns into a competitive process by doing that?

It hasn't. Yes, there's always a risk. Do you put any guardrails in place to prevent that?

Or—

Look, when we're putting in our LOIs and negotiating that, typically we're in exclusivity. So—

Oh, so you could get to LOI and then saying, hey, you might want to bring a banker in to help with the process.

We usually recommend they bring a banker in a little bit earlier than that, but if you've built a relationship with these founders, they understand the vision and you can get to alignment on value. We've had success from a proprietary deal perspective.

I need more convincing to, to do that. I, well, and you know, the problem is I did advisory and I've done a lot of sell side and on the banking and sell side, golden rule is you keep unsophisticated buyers unsophisticated and you entertain the sophisticated buyers. You don't like try to sophisticate unsophisticated buyers. And I feel like that same applies on the buy side, but I get your point. You're going to spend and rack up a lot more brain damage and time if you literally got to go through so much more back and forth, all the information requests and all that stuff. I get it.

It streamlines the process for us. We can move much faster. When folks have the right advisors on board.

Somebody should have like a flat fee service to do that where they actually package up a deal and just offer it like as a flat rate or something based on headcount or something. Anybody else want to partner in a new startup? Let me know. I'll snap attack. Oh, you know what, actually partner first. I want to talk about that. So it's like our main topic. Can you tell me a little bit about that? Curious, like percentage of deals that you've partnered first on with the philosophy on it versus Like the other example you had, you've known about it, it was an area, you've had the friendly relationship versus a true partner relationship. That I'm curious about too, because I feel like what I've learned is just partnerships are really difficult. You spend a lot of effort, almost probably as much as the M&A effort to enable them and make them successful.

I want to say that 80% of our deals, we've probably had some sort of relationship partnership in the past. In aerospace defense and government services, there's a lot of partnering that's part of our business model. We work with a lot of different companies across the board that helps develop our pipeline, and we've had success in coming in when you're just getting to know the company in a diligence process. We get a lot more excited about companies that we know and we've seen on the ground and that we know what capability they bring and what gaps they fill and why we've been more successful partnering first.

So that's just general, like you find a company, it's interesting and it's like, Hey, we should try to figure out how to partner with them first. What does that look like?

Our market leaders are bringing companies to us. A lot of times they're already partnering with these businesses, and then they're coming to us and saying, hey, this is a great partner to us. We think they would make a great acquisition candidate and really can articulate the why they fill a certain gap and why we're partnering with them already, but why we really, as you think about the buy-build-partner framework, why it might make sense to actually acquire the company.

So what does that look like when you build the business case for that acquisition? Is it like, here's, we have these points of validation because of that partnership? Is that, what does that specifically look like?

Yeah, that's part of it. From a business case perspective, it's really thinking about what capability gaps the company is going to fill. And we already know in the market today where they're filling some of those gaps as a partner. but that being able to bring the technology in-house where we have more of the IP ownership and are able to build on top with our own IP can really scale that business in a more meaningful way.

Got it. So there's some real synergies of going beyond partnering that you're gonna accelerate some growth and value. Let's talk about SnapAttack. This is a company that you spun out with venture backing and then eventually sold it to Cisco. What was the thinking behind that? How do you decide spinout beats traditional acquisition or building internally?

Yeah, the Snap Attack, it was super interesting. It was a great team, a great technology, and we thought it had a lot of potential. When we spun it out, the technology was still nascent. It was opportunistic. We felt like it made sense to spin it out at the time because we felt that it really needed venture backing for it to be able to scale and grow in a much faster way than we were going to be able to do it internally. And that the really successful spinout and through the spinout, we've maintained a strong partnership with them and a channel. So we were a customer of Snap Attack while they had spun out as well. We partnered with them in the marketplace, but they were able to scale much more rapidly through the venture investment and spinout than we would've been able to do internally.

How do you think through that as a firm traditionally known for consulting? And you've seen this happen where consulting firm buys software company and then a year or two, they basically dies on the vine. How do you think through that in terms of your businesses between software and services?

I think in this case it was about the technology and scaling the technology. So Snap Attack was really this crowdsourced platform, but wasn't it because it was a software business, because we have software businesses and products at Booz Allen. However, in this case, because it was more of this crowdsourced platform, we felt like it needed a different investment profile to really scale.

Got it. So it's unique. It doesn't fit into the playbook of your other product lines. Yes. What do the terms look like of actually doing that, actually spinning it out?

And roughly, you don't have to give me a term sheet, but We were able to find the right venture partner and they were able to help us also and vet and build a leadership team with founders of the business, the great team that went over with the business and really scale it. That was what was really important to us. It was a startup within a 30,000-person company, and the team was extremely passionate about the technology and what they were building and the potential. But the venture was really able to help guide the company in a way that was able to scale that business and had a successful outcome.

One thing we haven't talked about is Booze Island Ventures. Like, you actually have a formal venture group that I know has expanded to $300 million. On top of it, you recently announced that you've taken an LP position in A16z's growth fund. Can we talk a little bit about that? Like, how do you look at the venture that feeds into M&A pipeline, or are they just completely separate strategies?

We really see our venture investments in a different stage of the life cycle, and how do we partner and scale and bring that technology to the mission and the warfighter? Some of our venture investments could potentially be M&A targets one day, but I think that would be the exception, not the rule. Most of our venture investments are seed to Series B, and really, as we think about bringing technology to the warfighter, we're partnering with these venture companies to really help them scale and bring cutting-edge technology to the mission.

So it's more about getting access to the technology versus getting an option to buy the business later?

Absolutely. That's where we're focused from a partnership perspective. Working with the founders, integrating technology, building on top of the technology as well with our own IP and bringing solutions to the warfighter. Interesting.

So access to the tech— but couldn't you get that other way? Couldn't you just do a commercial license and still get access to technology? Is it different when you actually are on the capital—

It's different when you have a seat at the table and that you're a true believer and an investor in the technology.

Then you can actually help shape the roadmap and really have a say in the future. Mm-hmm. What is partnering with another very prominent VC firm like, and why would you do that?

So we have a long relationship with a16, and it's been a great relationship working with their portfolio companies over time, co-investing. And what we really wanted to do was double down on that relationship. Our venture fund really focuses on seed to Series B. But we also know for scaling technology, getting the technology to the warfighter much faster, we really needed to start focusing on more growth-oriented companies and where they were in their life cycle. This was a great opportunity for us to partner with A16Z, world-class VC, to be able to partner with them and really partner with their portfolio companies on bringing solutions to the mission.

So it helps you get more access to technology. Absolutely.

And when we started the conversation, we were already working with a number of their portfolio companies. So this really just solidifies the relationship.

Very cool. Look forward to hearing more about that. A couple of topics, I know, before we run out of time here, but we haven't talked about integration, which I feel like is where rubber meets the road. What's your philosophy on integration? What are some of the big lessons learned? Do you just hand it off to an integration team and wave goodbye? How does it happen over there at Booz Allen?

Ultimately, the business team needs to own the successful integration of a deal, just like they need to own the business case. And of course, every company has learnings on the integration side, and every deal brings its own learnings on the integration side. For us, the most important part of value creation is around culture and change management and making sure that we're really being thoughtful around what is secret sauce of a company, how do we make sure that we're protecting that secret sauce, but also integrating and scaling it across our business. And we're learning, we really think about integration as a two-way integration. How do we learn from the new company too, and take some of their best practices and what makes them special and bring them into Booz Allen?

Yeah, it's like a reverse integration where you're really trying to figure out what's are key things and what was the biggest lesson you learned? Was that part of it or what was like the big thing that you've learned after doing a number of these deals to make them successful?

Early on, as we think about driving synergies, it might have been more fragmented across our business around where we were gaining synergies and where we've really evolved to is we have a market leader that is really accountable for driving the success and the synergies of that business. We are a really large company. When you think about having a lot of different market leaders touch an acquisition, that was challenging for us. Having it more accountable to one market leader, and we still work across the business to drive synergies, but that one market leader is truly accountable for the success of the integration and acquisition.

Synergy accountability. Make sure you got that right. Looking at some of the acquisitions we talked about, but just recently you've done deals across defense tech, healthcare IT, commercial cyber, and it was a little bit of that theme of shifting from consulting firm to tech company. Can we talk a little bit about that? Like, it's a big change, and kind of like I mentioned, sometimes tech deals die in the helm of consulting firms.

It has been a big change. Look, that for us, we've been delivering technology to our clients for, um, two, at least two decades or longer, But we've really transitioned from consulting on the technology to building the technology for clients. Where we're focused on an M&A perspective is how do we fill those capability gaps that we may have, or channel access in defense technology, space, and cybersecurity are our main focus areas.

What does that look like when you look at your kind of like business organization structure? I'm always curious about that because a lot of the consulting, just when you sell services, it's so different than selling software. Are they really segmented? You look at it as like here's completely two different go-to-markets or just having these business platform segments in a way where there's an ecosystem for software businesses versus services?

When we're looking at companies and how they are going to market, and a lot of times in our market space, you're going to market with software and services together, because you're really implementing the technology into the ecosystem to make sure it's getting to the edge for the warfighter, making sure that we're mission-focused. For us, the companies that we're looking at, their go-to-market is not really that different from our go-to-market.

You still gotta integrate that go-to-market into your— which is a whole other topic. That's, I'm gonna Pick a rain check to come back and visit, but I feel like that would be interesting with a business model that's mixed services and tech. How do you absorb and integrate go-to-market?

We're already doing technology and going to market in that way. We've transformed over the last decade, but hasn't from an integration perspective. There's obviously things we can learn and change, and they— companies bring channels to market. It's not complete white space for us. it's a close adjacency as we're looking at companies.

So going back to folks I've talked to, especially recently, that are standing up corp dev functions, because it's actually happening quite a bit, a lot of new platform plays, roll-ups, etc. What are, like, mistakes that you see organizations make when standing up a corp dev function, or key things to overcome?

I think there's probably 3 mistakes I see in M&A, and whether it's standing up a corp dev function or looking at different companies, the first thing when you stand up a corp dev function is really having a clear strategy and where you're focused on so that you can really build a pipeline, build buy-in at the board and the leadership team level of where we want to focus capital energy and create value. And if you're not centered in strategy, you're going to be spending a lot of time looking at companies that don't make sense. So that's number one. We've talked a lot about culture. Really creating a framework where we can really think about cultural fit, mission fit, for us was really important. Obviously, the playbook is important too, making sure you know how to run through a diligence process, the right financials. I view those as table stakes. The third mistake I find is you don't want to fall too in love with a deal. Really want to be disciplined. It's very easy in a deal process to fall in love with a shiny object. And you have to be able to walk away from a deal to make sure you're getting the deal terms that you need, the protections you need, and also that you're not overpaying.

Have a super clear strategy. That'll make things a lot easier to find and identify qualified targets. And then the culture, mission, developing the playbooks, and also just being bottom line disciplined. Don't catch deal fever and fall in love with deals. One more question, Kristi. What's the craziest thing you've seen in M&A?

I feel like every day is different in M&A, which is a little bit of the craziest thing. I feel like every deal is different. I learn something new on each deal. Each deal is unique. Each founder that you're working with is unique. How you think about integrating the business is unique, and you have a playbook that everything's a little bit of the same, but I still feel like what's so crazy about M&A and why I love M&A is that it never fails. Every deal I'm doing something unique and different.

What was like the most unique and different founder or business owner you had to work with?

Oh, I think all founders have their personalities. They've built such successful businesses. Like the businesses we're looking at are successful businesses that are high growth, that are hugely strategic. You really need to get to know those founders and better understand what is it about their baby that's really special and make sure that we're resonating. But they all have very specific things that are important to them. And how do you find— figure that out early in the process to build that rapport and relationship?

This is a fair closure. The deal itself is extremely unique, but just as well, the founder and their drivers are just as unique.

Absolutely. The team that you're working with on the other side is unique. You really need to figure out early in the process what matters to that team to get to the finish line of a deal.

Next time we'll have dinner and share some more deal stories. Okay. I would love that. Chrissy, I appreciate you taking the time to have this conversation and helping me become a better M&A scientist.

Well, thank you for having me. Really appreciate it.

Those of you still tuned in, thank you. Like, I'm impressed that most of the audience stuck through. Fellow M&A scientists, Reach out to me, connect me on LinkedIn. I got my privacy guard down, but put a little note so I know, like, you're not a bot or somebody trying to sell me something. Love to get feedback. Let me know what you think about this content, livestream, topics I haven't hit on yet. I love those recommendations and the criticism. I'll take it. I'm trying to get tips to get better at this. Till next time, here's to the deal. Thank you for taking the time to explore the world of M&A with our podcast. We love hearing feedback. Tag us on a LinkedIn post, add a review on Apple Podcasts. We'd love to hear from you. If you need help standing up an M&A function or optimizing one that you already have, we're here to help. And if we can't help you, we probably know someone that can. You can reach out to me by email, kison@mascience.com, or you can text me directly at 312-857-3711. If you just want to keep learning at your own pace, visit mascience.com for a lot more content and resources. That's where you can also subscribe to our newsletter. Again, that's mascience.com. Here's to the deal. Views and opinions expressed on M&A Science reflect only those individuals and do not reflect the views of any company or entity mentioned or affiliated with any individual. This podcast is purely educational and is not intended to serve as a basis for any investment or financial decisions.