Otis Carter has a unique approach to M&A activity. As general counsel to the country’s largest foodservice equipment and supplies distributor, Carter has guided TriMark through four major acquisitions—all in four years.
“It is critical to stay involved in every aspect of an M&A transaction,” Carter said, reflecting on the company’s revenue growth to roughly $1.9 billion. TriMark has also sold the company twice. “Yet we’ve never lost a member of our management team, nor have we laid off employees.” He said perceptions of stability play a critical role in fostering M&A success.
As Carter eyes future acquisitions, he maintains this straightforward philosophy: “Read everything, make sure you have a firm understanding of the issues, and be commercial in your approach.”
You are TriMark’s first in-house counsel. How has your role evolved since joining in March 2014?
When I first interviewed, TriMark CEO Jerry Hyman [told] me that while he wasn’t quite convinced the company needed a general counsel, he was certain the company didn’t need a lawyer. He explained that even though TriMark was a large company, it was not a place where functional areas were staffed by large teams. It was a lean, hands-on organization where people were expected to roll up their sleeves, and I’d be similarly expected to assume any number of roles.
I remember thinking what a great opportunity it was to have this blank slate. Then on my first day, I was told the decision had been made to sell the company, and we were starting an auction process (we were then owned by Audax Group, our second private equity sponsor). When I started breathing again, I was told I needed to start preparing the company for sale. I spent the first two months visiting each of our divisions, meeting management, and learning how a full-service foodservice and supplies distributor operated, while traveling between New England and Chicago to help my wife pack up our three small children and two dogs for a cross-country move.
When the dust settled, we were acquired by Warburg Pincus, less than five months after my first day. What had seemed like a series of responsibilities outside of ordinary course have proven to be very much the norm. In addition to corporate governance-related responsibilities, I partner with TriMark’s chief executive and chief financial officer to help lead M&A activities, as well as partner with our vice president of human resources compliance and employee relations to address policy-related matters.
I work with our CFO and director of risk management on insurance programs and workplace safety matters. I work with each of our operating divisions on customer-related matters, as well as manage our commercial real estate and intellectual property portfolios. Finally, I work with our chief information officer and vice president of IT on data security- and compliance-related matters.
How do you consistently communicate across a vast entity, with 60-plus locations and 3,100 employees?
Because we’re such a large organization, I have to make use of virtually every opening in my day. Most of our executive team is in the office by 8 a.m., so I’m usually up early to respond to emails. I try to use my 30-minute drive to the office to make any calls that don’t require access to my computer. I don’t let work emails sit in my inbox; they’ll disappear if I do. My office is next door to our CEO and CFO, so I pop in when I need to. I speak to our regional executive vice presidents at least once a week (often more) and our division presidents at least once a month.
I also have a monthly check-in with our chief human resources officer and chief information officer to make sure we’re aligned on things that affect our business. I’m usually out the door by 6 p.m., because there’s usually one hockey or baseball practice, or a singing rehearsal (my wife), that requires us to divide and conquer. I take calls from the car, and because the quietest part of my day is after the kids go down, I try to work then on matters that require longer periods of focus.
TriMark has changed owners several times. How does the company stay true to its 70-plus-year heritage?
TriMark is a large organization. However, in many ways, it still operates like a smaller business. In my four years at TriMark, we’ve completed four substantial acquisitions. We’ve added more than 1,300 employees and almost 30 new facilities. We’ve also sold the company twice, through robust auctions. Yet we’ve never lost a member of our management team, nor have we laid off employees. We don’t do turnarounds, and we’re not looking to be someone’s retirement plan. The companies we’ve acquired have all been led by great teams that we were certain we’d want to partner with as we continue to grow.
How do you assess whether functions should be handled in-house or not?
I try to keep as much in-house as I can. Virtually every acquisition has been the result of a personal relationship at a very senior level. They are often second- (and sometimes third-) generation, family-owned businesses, and the owners will have concerns about what the transaction will mean for their family members and employees. Our CEO, CFO, and I are always deeply involved in every aspect of those transactions, and we make sure our outside counsel understand and respect those dynamics. For our most recent transactions we have used Morgan Lewis, Kirkland & Ellis, and Simpson Thacher.
For labor and employment matters (including union-related matters), we generally use a single firm, Littler Mendelson. They have an office in every state in which we have operations, as well as expertise across every area of labor and employment, which, given the size of our workforce and constantly changing state laws, is invaluable.
TriMark has acquired four companies in less than two years. What underpins M&A success?
It is critical to stay involved in every aspect of an M&A transaction, from initial meetings with management and reviewing financial data, through financing, closing, and integration. You cannot simply hand it off to outside counsel—no matter how good your counsel is, you know your business better than they do, and you’ll have a better sense as to whether something might impact your business down the road.
Read everything, make sure you have a firm understanding of the issues, and be commercial in your approach. Nothing will irritate your deal team more than lawyers taking extreme positions or getting hung up on immaterial points.
How do you recharge from your day-to-day duties as GC?
I have three sons, all under 10. Even though it’s a grind sometimes, I love trekking to their hockey games. They love playing, and seeing them laugh and skate around like daredevils is a good reminder of the importance of having fun and not taking things too seriously. I also love to cook and try new restaurants, which is a nice perk of working at a place like TriMark—if there’s a great new restaurant in Boston, there’s a good chance we were involved.
As you settle into your fourth year, where will you direct your efforts next?
We’re now more than six months into our new ownership, so I suspect we will again be busy making acquisitions, including potential verticals. I think you’ll also see us making investments in the company, including the rollout of a new enterprise resource planning system, and expanding our product and service offerings.
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