Elizabeth Shea sits down with Salman Husain, co-founder and managing director of Monument Capital Partners, to discuss the evolving M&A landscape for founder-owned government services companies. Salman shares his journey from government consulting into investment banking and explains how his experiences in this sector have shaped his perspective on mission-driven businesses and the founders behind them. He offers insight into what buyers are really looking for in today’s market, including strong leadership teams, scalable growth pipelines, and reduced owner dependency. Salman also discusses why preparation matters years before a sale, the importance of surrounding yourself with experienced advisors, and how deal terms can impact outcomes just as much as valuation.
Elizabeth Shea (00:43)
Hello everybody and welcome to Branching Out. We are very excited to have a new acquaintance, Salman Husain with Monument Capital Partners who joins us today. Hello, how are you today?
Salman Husain (00:53)
I'm doing well Elizabeth. Thank you for having me here.
Elizabeth Shea (00:55)
I'm very excited to hear your story. So Salman comes to us as the Managing Director and Co-founder for Monument Capital Partners, which is a local investment bank here in town. And I'll let you go ahead and describe some of the industries that you serve. But let's just start from the beginning. Tell us how you got into this industry with Monument Capital Partners to be a co-founder?
Salman Husain (01:15)
So, right now we serve the M&A market for the aerospace, defense, and government industry. But my path to get here was a bit circuitous and I never planned on focusing on aerospace, defense, and government when I started out my career. So I actually started my career in 2008 and went into consulting and you know 2008 was the great recession. As a consultant, a lot of commercial contracts were drying up and they were not hiring consultants anymore. Overnight, all of those opportunities and projects went away. The only customer that was spending money at the time was the US government. So when it came to staffing on a consulting project, I got staffed on a government contract. And that's what kind of started my career in the government space. So this was back in 2008. It was supposed to be a one year contract with the government. And 18 years later, I'm still in the sector.
So I spent the first eight years of my career in the consulting space and worked on contracts with United States Postal Service, Department of Homeland Security, the US Census Bureau, and built a really good foundation in this government space and really liked working in DC and the DMV and working on programs that serve the US government and were mission oriented. On one of my projects, I was working with a team from a company called SRA and in the middle of my project, SRA got acquired by CSC. And that was my first real experience with M&A. While I wasn't an SRA employee, working on a project with them, I saw a lot of the post-acquisition integration happening. I got to see a lot of the communications that happened between SRA and the employees. And that's what really sparked my interest in M&A early on.
So I decided I wanted to pivot my career into investment banking and look at M&A, in earnest. And as most career pivoters do, I decided to go get my MBA and went to Georgetown to do that. As I was looking at investment banking and I thought about ways to kind of merge my past experience in government with my new career focus in investment banking, I was pretty focused and I knew it was a niche area that I was trying to target as a career.
And through one of the information sessions, I met the founders of KippsDeSanto and learned that there is an investment bank solely focused on M&A in the aerospace defense and government market. And I said, "well, this is perfect." And I was lucky enough to get an internship with them and then join them full-time as an associate. For those that don't know, KippsDeSanto is one of the leading investment banks in the sector. So I was really privileged to start my career in investment banking with them and really was able to build a strong foundation in the skills required to be an investment banker.
But I also learned about the market more broadly. And I realized this isn't a 1Z, 2Z type of market where there's only a handful of deals happening. This is a booming M&A market with north of a hundred deals happening every year. There's a real opportunity to be an active player in this space. So I spent about three years there and built a lot of experience serving the market. Over my time, KippsDeSanto was moving quite upstream and I realized where my passion really lied was working with founder-owned, founder-operated companies.
As KippsDeSanto was moving upstream, they were working with larger companies, private equity backed companies, things of that nature and it was kind of shifting away from the founder-owned companies. And I realized my focus needed to be more on the middle market. And that's when we decided to join Aaronson Capital Partners, because they were more focused on that middle market. And that's where I met my then boss, now partner, Philip McMahon. We spent two years at Aaronson together, worked on several deals in that space. And in the two years I was with him at Aaronson, we realized there's an opportunity to branch out and start our own investment banking platform.
And that's what led us to Monument Capital Partners. We're always surrounded by founders, owners, operators, and to have the opportunity to do that ourselves was too good of an opportunity to pass on.
Elizabeth Shea (05:42)
That's a great story and it's interesting because I remember the SRACSE deal and that was a really big transaction as I recall, like billions of dollars or something along those lines And then of course I'm very familiar with KippsDeSantos and Aaronson and so hats off. You had your training ground in very, very strong places. So well, congratulations to you! You say you focus on government services. I think it's really unique that you bring that perspective of having been inside a consulting capacity, so you really understand the nuts and bolts of it. I imagine you can appreciate what a founder might need to go through when they're going through an integration.
Salman Husain (06:18)
So you bring up a good point, right? Having been on the other side of it, being a consultant for a government contractor, serving the government, I've seen kind of how these contracts function and how the work is done. Like I said, I never planned to be in this sector, but having been in the sector, I realized how much of a focus there is on the mission, how much technology is constantly advancing. And then it's being on the other side now where I get to work with the founders and owners. I get to see how committed they are to enhancing and advancing technologies for the government. So it's just a really great kind of opportunity that I've had to see both sides of it. And I have a chance to bring both perspectives into the work I do today because I think I just have a different appreciation for the work that's done on the ground by the companies, by the employees of these companies that I'm representing.
Elizabeth Shea (07:12)
So how do founders find you? How do you bring in the clientele? What's the typical process?
Salman Husain (07:19)
So we work with folks in a few different capacities. There's some owners that we've known for quite some time and work with them several years before they decide to go to market and sell their business. What we do in that time is really help them establish the right processes, the right metrics that they would need to become a compelling, exciting opportunity for these buyers to go pursue and would be interested in acquiring. So we look at their pipeline, we look at the technologies they're working on, the contracts they're pursuing, kind of across the board operationally, and give them some guidance to make sure they're maximizing value for whenever they are ready to sell. And then we have some other clients that we get introduced to through referral networks, whether it's lawyers or accountants or former clients. Usually those individuals are much closer to pulling the trigger on a sale. So we come in right before they start the process and work with them. But in either case, when they are ready to sell their companies, we work with them throughout the entire process. We're the ones that kind of, we call it "quarterbacking the process," where we come in and review their financials historically, we help develop a forecast, we build all the marketing materials. We establish the buyers that we're planning to contact as part of the process. And we take it all the way from making the first call to the buyers, all the way to negotiating the LOI. And we're not done until the deal closes. So we're involved from beginning to end to make sure that our clients have a successful exit with their companies.
Elizabeth Shea (08:55)
So on that point, do you have a preference as to whether someone might want to come to you earlier versus later or what's your perspective on that?
Salman Husain (09:05)
Not a preference, but for the ones that we've worked with longer, we see how much their value changes from the time we first meet them to the time they ultimately decide to make an exit. We've seen companies that have doubled and tripled their valuation from when we first met them to the final sale at the time of closing. And that's just a combination of a few things that they're implementing early on and thinking about proactively as they run their business. And that's where we think there's a lot of value and just planning for this earlier and pulling the right levers throughout the process to maximize value whenever they are ready.
Elizabeth Shea (09:47)
Totally makes sense. And can you talk about what some of those value drivers are? What are the things that . . . particularly in the government services industry, I love the fact that there's the focus on the mission. What are other things that are really important and critical that would improve enterprise value?
Salman Husain (10:03)
Yeah, I hit on the mission and technologies quite a bit. There's obviously a lot of excitement from buyers for companies that are developing advanced technologies. AI ML is obviously a big one nowadays. But that aside, what really differentiates companies is a few things. Oftentimes what our clients think is buyers are just buying the portfolio of contracts they have today. But really what buyers are looking to do is grow that company and expand beyond that base of work that they're acquiring in that moment. And to be able to achieve that, you need a strong pipeline. You need to be looking at opportunities one, two, three years out at any given point and know what's coming down so that you're building up your ability to grow in the future. And that's what buyers are really buying is the opportunity to grow and scale that business. I think that's what really differentiates good companies from great companies and companies that can really help buyers achieve their goals as well.
Elizabeth Shea (11:08)
Couldn't agree more, very astute points. I think from the standpoint of a valuation, let's say, for a government services company, do they tend to differ if you're looking at a strategic buyer versus a financial buyer, a private equity buyer? Has there been any change from that regard?
Salman Husain (11:25)
So, what I've seen is the band has really narrowed. Historically, and this is what I kind of learned early on, strategic buyers are able to pay more because they can recognize cost synergies. So they're willing to pay a little bit more. What we've realized though is private equity has kind of learned that they have to keep up and there's a lot of private equity in this space now. So what we've seen is the range of valuations have really narrowed and strategic buyers and private equity buyers usually come in at similar valuations now.
Elizabeth Shea (11:59)
That's really interesting. So, let's shift gears for a second. Let's say that I'm a business owner. What advice would you give to me in terms of how to better prepare myself, either emotionally, financially, what kind of things should I be thinking about?
Salman Husain (12:03)
Yeah, so we talked about valuation. There's a lot of things we can do early on to help maximize valuation. Pipeline, like I said, is an important one. The other key component is building a strong team around you. And that's internally and externally. I say that because, again, when you're an owner, operator and a founder, you're employee number one. So you're responsible for the accounting, the operations, the HR, everything to keep the company running.
But what happens as you scale up is there's a lot more people and you need the right people around you within the organization to have the right skill set for each of those different areas that are required to operate a business. We find it incredibly valuable to hire a right CFO, have a strong BD team and capture team, have a COO and a HR representative so that your company is operating efficiently. And what happens oftentimes is buyers come in and when they make an acquisition, the owner will exit the business and it's this leadership team that continues to operate the business going forward. So the stronger they are, the more ingrained they are in the day-to-day and aligned in the growth strategy, the more excitement the buyer has in pursuing that acquisition.
Elizabeth Shea (13:34)
Yeah, I was going to ask you about that because we talk a lot on this show about reducing owner dependency. And so what I think I'm hearing you say is that . . . of course being around to drive the growth and to drive the vision and those sorts of things, but also having a leadership team that can carry on in the event that you decide to exit. Do you see it that often that the CEOs will exit?
Salman Husain (14:00)
More often than not, they will exit. There are some situations where buyers have a very big growth plan ahead of them and want to continue executing on that plan. But oftentimes these owners are . . . this is the single largest liquidity event of their lives. So it becomes a little bit difficult to stick around when that happens. But more often than not, our clients do step away.
Elizabeth Shea (14:26)
And they're probably entrepreneurial and want to go off and start something else anyway, right?
Salman Husain (14:30)
Well, usually yes, but sometimes they have to wait for their non competes to clear, but that's definitely the case.
Elizabeth Shea (14:33)
Well, that's a fair point. Hahaha.
Elizabeth Shea (14:35)
So on that note, talk a little bit more about what you think the CEO should be thinking about in terms of building the right support structure.
Salman Husain (14:43)
Yeah, so we talked about building the internal team. The other component of it is also having an external team and that that includes your advisors, that includes the accountants that you're using, the tax specialists that you're using, lawyers, investment bankers, things of that nature. You want the best external advice that you can get as early as you can have it. So you're preparing your company for diligence. You're preparing yourself for the documentation that's required as part of the M&A process. So the stronger your team is around you on the external side, the more access to information resources that you'll have throughout the M&A process. And again, the earlier you bring them in, the more institutional knowledge those advisors will have about your company and can speak to the things that have happened in the past. Through an M&A process, there's a lot of diligence that takes place. And we oftentimes loop in these advisors to provide some more context and guidance on key questions that come up. So again, the stronger your team is outside of your company, the better prepared you'll be for the M&A process.
Elizabeth Shea (15:51)
So I have a question on that. What if a business owner has had an accountant for a long time and does all the taxes for the family and what have you? When is it appropriate to switch or to augment versus going with the people that have always known you for long time? Do you have a perspective on that?
Salman Husain (16:11)
I don't know if I can answer that one. That one's a toughie. It is a challenge. That's why I don't want to give any thoughts on it because it's very unique to each individual. We do have folks that have switched advisors like that, but it's hard, right? You lose institutional knowledge. So we always have to balance that quite a bit. Or sometimes we'll say, "keep your advisor, let's bring in this other third party," but it's very much case by case.
Elizabeth Shea (16:43)
Yeah, I was legitimately just very curious about that because I have people that have that have asked and I think you might be right. It might be that you continue to work with your advisor that spend with you a long time, but you really want to have someone that understands M&A transactions and does them for a living. Because if you don't, you run the risk that something's going to get missed. So yeah, I was just curious if you had a perspective and I haven't seen it happen that often, but it is something to consider and probably a question at least for your external advisors to deal with appropriately and openly and transparently.
So let's talk about today's marketplace. What are you seeing today in terms of trends? It's been a tough year for government contractors. Are you seeing anything that people should be looking out for or be hopeful for?
Salman Husain (17:32)
Yeah, the last year, year and a half has been interesting. From DOGE coming in early last year and cutting a lot of contracts, we saw a lot of our clients and lot of companies generally in the sector that had their revenue decreased substantially as these contracts were eliminated. So that's been tough for a lot of folks to navigate that. On the back end, we had a government shutdown which caused a lot of operational issues for these companies where they had to move employees to the bench or have layoffs because they weren't required to work and it was tough to continue paying their salaries. So it was definitely a tough year and what we noticed is, especially in the middle market, a lot of folks decided to pause the sale process or push it to 2026. So now that things have settled a bit in terms of the macro environment, we're hopeful that the activity picks back up.
Even though there was a lot of concern last year, we still had decent M&A activity. But we think a lot of deals pushed to the right in 2026 should pick back up. And we expect that M&A activity to continue going forward.
Elizabeth Shea (18:43)
Oh, that's terrific. Yes, I know that there were was lots of speculation last year as to what's going to be happening to the market, particularly in M&A. So, we're hopeful. We're very hopeful. What about some gotchas, any gotchas that you can think about that people should be should be considering if they're looking into this process?
Salman Husain (19:00)
So surprisingly, I will say there's not a lot of gotchas. It's a little self-serving because I think part of the reason we don't see gotchas is because the buyer knows there's an M&A advisor behind the seller and they can't get away with one.
And especially when you're working with an M&A advisor that knows the market and has worked on a lot of deals, we know what market terms are and what deals structures look like. So usually we don't get anything that's too complicated or too out of market in an initial deal term. There's always something that we need to negotiate, but no gotchas, right? Every buyer and every seller will anchor high or anchor low on certain things, and then we negotiate. But there's nothing that's completely out of market that we usually see.
Elizabeth Shea (19:47)
Yeah, I am surprised by how many folks that we've even had on this podcast that haven't used a representative like yourself or haven't used a banker. And so I think that there's a role that you serve and a lot of it is about the terms. And so can you talk a little bit about the terms versus the price? Because that's always a piece of speculation, you know? There might be a valuation, but then there are also terms. . .
Salman Husain (20:11)
Yeah, I mean, oftentimes the enterprise value is what gets all the attention, but to your point, how that enterprise value is structured is critical. And typically there's three buckets of value in a deal, right? You'll get cash at closing, you'll get rollover equity, or you'll get an earn-out component. Depending on the company we're selling, the forecast, the opportunities ahead of the company that we're building into the forecast, those three levers will get adjusted a bit. If you're expecting a ton of growth three months after the sale, we expect some sort of earn out tied to that. But if you're in a relatively steady state, we expect less earn out tied to your future performance. So, we look at those components and we try to balance all of that. But you're exactly right. We have to look at all of the deal terms in aggregate. And it's not just the sticker price that we focus on.
Elizabeth Shea (21:08)
Right. So what other roles do you find that you serve in this process that are important for a buyer to consider?
Salman Husain (21:16)
So I said it earlier, we're kind of the quarterback in the process. One, we're organized upfront. We make sure all the documents are in order, all of the financial documents and reports are available. We do our preliminary diligence upfront and prepare the buyer and clean up any questions that come up before we reach out to any groups. There's a lot of upfront preparation that goes into going through a sale process.
And then the other thing where I think we add a lot of value is just creating a sense of competition, right? When a seller is hiring an investment banker, there's monetary investment that's made to bring someone like that on. And our job is to maximize competition and ultimately drive up valuation as a result. And buyers know that. They know if an M&A advisor is in the mix, they're calling a lot of other groups that are similarly interested in this company that that's a right fit for the profile of the client that we're bringing to the table. And they know that if they're serious about pursuing this, they need to be ready to pay at least market rates, right? They can't get away with a lower valuation. What we see oftentimes is a seller will get contacted by a buyer and it ends up working out. But there's two things that end up happening. Deals take a lot longer when it's a preemptive in that way, because you haven't done the preparation upfront. There's no one there to kind of force activity. And that's where we come in oftentimes is driving a lot of that activity. But the buyer also knows there's no one else in the mix. And that's when the gotchas come in. That's when there's more risk on deal structure because there isn't someone there to provide guidance. Again, the value of bringing in someone that's worked on several deals in this space is they've seen all these different structures. They've seen different deal terms and they can come in and give guidance on what's reasonable and what's not. And what we see oftentimes is hiring an advisor pays for itself because you get a valuation that is much more competitive than you would have gotten on your own through a preemptive process.
Elizabeth Shea (23:23)
100%. I think if that's the way that a company is looking at it, then that's the right mentality because you're probably incentivized to drive more competition. So absolutely. Okay, so we're almost at time here, but I'd love to hear if you have any success stories that you'd be interested in sharing. Any fun facts and deals you've recently done?
Salman Husain (23:45)
Yeah, so we hit on this earn out thing earlier and I actually have a success story with a client of ours that that did have an earn out component. So our client was very mission oriented and really wanted to have a positive impact on the agencies they were serving and had a really strong pipeline of opportunities and we knew there was a lot of growth ahead of them. But our client also knew they needed to sell and find a partner that would bring resources and scale and access that they didn't have independently to really go win some of this work. And that's what prompted the sale for them in the first place. But as part of that growth plan, we were able to structure a deal that had a very large earn out component with targets and metrics that were kind of a few years out at the time. And once those two companies merged, all of the access, resources, and scale that they were looking for allowed my client to achieve all of the earn out metrics in half the time that initially was planned for. And that's a win-win for both sides, right? The buyer achieved the growth that they had forecasted and for our client, they achieved the earn out. And we were also able to negotiate accelerated payments of the earn out. And we were able to really help them achieve the full value of the company when we ultimately sold.
At the end of the day, the earn out was a multiple of the cash they received at closing. And those types of deals are just life changing and build generational wealth for these founders. And again, that's what we love doing. And that's why we love working with founder owned founder operated companies, because it's a meaningful transaction for them. It's the one liquidity event they will go through in their lives. And we're happy to be part of that process with them.
Elizabeth Shea (25:34)
That's great. Monument Capital Partners, congratulations to you. I appreciate you being on the show today. This has been really fun. So how can people get a hold of you? What's the best way for people to reach out if they're interested in having a conversation?
Salman Husain (25:38)
Thank you. Thank you for having me. Yeah, the best way would probably be through our website, monumentcapitalpartners.com. There you can find my email and phone number and I think there's a link to my LinkedIn as well. So feel free to contact me one of those ways, but I'd love to chat with folks that are thinking about an exit. Again, earlier is better, but feel free to reach out.
Elizabeth Shea (26:09)
I like the fact that you have a niche. I think that's very unique and strong. So congratulations. Well, thank you for being on the show today. All right. Thanks.
Salman Husain (26:14)
Thank you, Elizabeth!