On October 22, 2018, Mike Williamson came to Daniel Lawson’s Finance Seminar class (FIN 422) to share his experience at IUP and working at Tecum Capital—a Pittsburgh-based private-equity firm. At IUP, Mike was the Bloomberg lab manager and competed in
the ACG cup, a case study competition designed to build real-world financial skills through valuations and aims to provide insight into mergers and acquisitions, private-equity, investment banking, and other financial topics. Tim McMullen, an IUP
senior finance major, summarized: “Mr. Williamson did a great job explaining how a company working with private equity operates. It was great to see someone from IUP working at such a reputable company right after graduation.”
Williamson shared with that through the ACG cup participation while at IUP he was able to find his current employer, Tecum Capital, because a company rep was on the panel of judges. He emphasized the importance of meaningful connections through
networking. He stated that if it wasn’t for presenting at that conference he would have never made the connection which led him to his current position.
He talked about the different aspects of private-equity and the role that Tecum Capital plays in it. Unlike with stocks, in private-equity there is no open market for bidding on private companies. In the stock market, the buyers and sellers derive a price
of a security based on the supply and demand. In private-equity a firm must place a bid on a company and the company accepts or reject that price. An interesting fact is that the bidding process isn’t like a normal bid—sometimes the highest bidder
isn’t the one who makes the deal. Relationships with the company and employees can hold more weight in securing the deal than other factors. Tecum Capital looks to source deals directly with business owners because there is less competition, more
interpersonal connection, and often result in above market returns.
Another large portion of his presentation was about how they value these private companies. The large-majority of the private-equity universe values companies on an EBITDA (earnings before interest, taxes, depreciation, and amortization) multiples basis.
EBITDA multiples provide a “common unit” which allows companies to be compared easily. They also use cash-flow predictability as another measure of a company—they determine how much and what types of debt that should be used in a transaction. One
of Jenny Vietmeier’s favorite quotes of Williamson’s was “boring businesses are the best to invest in!” He spoke of some of the non-niche, everyday companies that Tecum has made great returns on.
IUP and Eberly are appreciative of Mike taking the time to share his story and advice with our students.
Eberly College of Business and Information Technology