Alumni Spotlight: John Honts – Senior Managing Director for Evercore Partners

In his role as Senior Managing Director for Evercore Partners in New York, John Honts, BHP ’92, has been involved in numerous merger and acquisition deals over the years. Evercore has carved out a position as the largest independent advisory firm and Honts has advised CEOs on some major deals including Sanofi on its acquisition of Genzyme, Wyeth on its sale to Pfizer, and CVS on its acquisition of Caremark. Honts recently sat down with us to tell us more about his career path and the M&A process.

Tell me a bit about your career path.

After I graduated from UT, I went to work for Merrill Lynch as an investment banking analyst. I spent three years with Merrill, two in New York and one in London. I then went on to Stanford business school and graduated from there in 1997. I took a job with Evercore in ’97 and have been with the firm ever since. Evercore was founded in 1995, so when I joined, it was a small boutique with about 10 professionals and 20 employees in total. Now there are around 850 employees and the company has expanded both geographically and in scope. Mergers and acquisitions (M&A) advisory work is the biggest thing we do. I have been a generalist in M&A for most of my career and have been specializing in M&A for health care clients since 2007.

Why did you choose to work for Evercore?

I wanted to do something more strategic and thoughtful. I knew I was interested in M&A. Evercore has always followed a classic style of banking, by focusing on a handful of clients and giving them the best advice possible.  We compete against the global full service banking firms, and to be competitive, we have to consistently provide our clients with creative, high quality ideas, as well as superior execution.

What factors come into play when you are advising companies on mergers and acquisitions?

At the heart of M&A is strategy, and we work closely with CEOs to determine how inorganic moves such as acquisitions or divestitures will complement the overall strategic game plan for the company. The first step when working with a company is typically to evaluate a range of possible options and determine the most attractive ones. Then comes the art of what is possible. For instance, if there is a company you want to buy, figuring out if it is acquirable by looking at the motivations for all parties involved, and if a transaction is feasible from a financial perspective. Then, we get into tactics, such as how do you make an approach to a target, and what do you do next if the target is not receptive to the approach. This involves exploring alternatives such as making your offer directly to the target’s shareholders by releasing it publicly or moving on to the next possible target.

In identifying the best options, we think about what  the transaction would do for the company strategically. For example, we look at how it would affect market share, the complementary fit of products and services, and customer and supplier synergies. When analyzing a transaction from a financial standpoint, we look at its effects on a variety of metrics including growth rates, margins, earnings per share, return on capital, leverage, and credit ratings.

We work in teams of four to five people on a typical project. The team is headed by a senior managing director, which is my role, and includes an analyst, which is what a new BBA graduate would do. The analyst is mainly responsible for the financial modeling and quantitative analysis that enables us to make conclusions.

A transaction normally takes about six months from the time we start working on it to when it is announced. Once it is announced, companies take it from there to close the deal. I am usually working on two to four live projects at the same time and still pitching new ideas to clients to refill the pipeline.

What do you enjoy most about what you are doing with Evercore?

It is a very thoughtful business. We are always trying to come up with new ideas for companies. I like that I am able to work directly with CEOs on their business strategy. I also appreciate the hard-working and talented group of people here. We have several people who went to UT in the senior ranks and a large UT contingent at various levels at Evercore.

What advice do you have for students wanting to go into a similar position to yours?

Doing an internship in something similar to this would be a plus and a strong accounting background would also be helpful. Focus on your analytical and quantitative skills. Also make sure you are comfortable in Excel doing analysis and financial modeling. Coming out of Texas, I had a good set of financial skills. Students should supplement those skills by demonstrating an interest in banking. A good way to do that is to talk to others about what investment banking is about so that you have a good understanding to draw upon in an interview, and have a sense as to whether investment banking is a career you really want to pursue.  Also, students should think about whether they would like to work for a boutique advisory firm such as Evercore, or a full service bank, and how the firms are different from a cultural and reputational standpoint.

How did your time in the BHP affect you and your long-term career path?

I liked staying with the same group of people in my classes. There were about 40 students in my BHP graduating class. It was a very talented group. I appreciated having the best professors and smaller classes. Some classes were really eye opening for me.

Do you have any advice for current BHP students?

Try to find something that you are really interested in and focus your job search around that. When I graduated from both UT and from Stanford, I had to do my own work to get the jobs I wanted. Companies weren’t recruiting for those specific positions. Leverage your alumni network and friends and seek out what it is you want. I used the alumni network and made it clear to people that I wanted to go to New York.

Alumni Spotlight: Woody Hunt – The Man Behind BHP’s Million Dollar Gift

Last week it was announced that the Business Honors Program received a $1 million pledge grant from BHP alumnus and El Paso native, Woody Hunt’s family foundation.  Hunt, who graduated from the Business Honors Program in 1966, has put forth a challenge to alumni and friends of the program to raise an additional $2 million over the next five years. A portion of his gift will go towards scholarships for students from the El Paso/Las Cruces/Juarez area and the remainder will be allocated to a BHP Excellence Fund to be used for faculty, student and programmatic support.

Hunt was in one of the first graduating classes and says that the program has come a long way in terms of both quality and quantity. “The Business Honors Program is certainly a significant asset for The University of Texas, the business school, and for the state of Texas,” he said. “I have always connected my success partially to the quality of the education I got in the Business Honors Program.”

In order to receive the gift in its entirety, the McCombs School must raise $2 million over the next five years. It is Hunt’s hope that the challenge he has created will incentivize alumni to give and will put more dollars in place to have a lasting impact on the program. “I think it is appropriate, particularly given changes to funding for higher education, to ask alumni who have reaped the rewards of going through such a high-quality program and have the capacity to give to help,” said Hunt. “UT Austin is becoming more state-assisted, and less state-supported, so I think the time is certainly right.”

Hunt met his wife Gayle, with whom he established the Hunt Family Foundation in 1987, while attending UT Austin. In 2008, the couple was recognized by the West Texas-Southern New Mexico Chapter of the Association of Fundraising Professionals as “Philanthropists of the Year,” for their continued support of the El Paso community.

Hunt is Chairman and CEO of Hunt Companies, Inc., an industry-leading real estate company, and its affiliate companies. Together, Hunt and its affiliates have more than $13 billion in assets under management. He was previously Vice-Chairman of The University of Texas System Board of Regents and served seven years, three as Chairman, on the Board of Directors of The University of Texas Investment Management Company (UTIMCO). He has also served on numerous boards over the years, mainly focused on health care and higher education.

Alumni Spotlight: Raquel Baldelomar, Founder and Managing Director of Quaintise

Raquel BaldelomarRaquel Baldelomar, BHP ’01, BBA ’01, left the comfort of her job with JPMorgan to start her own agency. Eight years later, her business is booming. Quaintise, pronounced “kwan-tees,” based in Phoenix is about to open a second location in Los Angeles and is the Agency of Record for several of Arizona’s largest healthcare companies. As someone who is creative, yet analytical at the same time, Raquel says she has found a great fit in the advertising and marketing industry.

What prompted you to create Quaintise and did you always know you wanted to start your own business?

I was working for JPMorgan Private Bank as a financial analyst for high net worth individuals.  And I always admired the entrepreneurial spirit, drive, and world view of our self-made clients.  After two years of working for JP Morgan, I was at a crossroads whether I should go for my MBA or do something that I had always wanted to do – start a company.   I realized that if I ever could take a chance to do something on my own, it would be then.   I had studied Classical Rhetoric, which is really the art of persuasion and oratory.  I became fascinated with what makes people persuaded, why they buy things, and how there are three basic different ways to win people to your way of thinking – ethos (character), logos (logic), and most important, pathos (emotion).  And I realized that’s what advertising was all about; engaging people to your way of thinking.  That’s what gave me the idea to start Quaintise.

What niche does your company fills in the marketplace?

We specialize in healthcare advertising.  I saw an opportunity in healthcare. There were so many large medical practices that were unorganized in their branding and messaging. One of the biggest trends we are seeing is a rise in consumer-driven health care.  Healthcare marketing has shifted from the provider to the consumer whereas it used to be mostly physician driven or market driven. We have found that in healthcare, trust is essential in consumer decision making. Patients realize they now have choices and base their healthcare providers on a positive association with the brand.  A strong brand position is a necessary foundation for driving patients to medical practices.  They have to trust the brand before they can trust the service.

What has been the most challenging aspect of running your own business?

I started Quaintise with no capital, I just had my own savings. Soon after I founded Quaintise,  I moved to Phoenix to work with a new client, but I didn’t have enough clients at that time to sustain a positive cash flow.  So I took a part time job waiting tables.  I thought to myself – I have a finance degree from the BHP Program at UT and I am waiting tables!  It was very humbling, but it taught me a lot.  I’m so glad I didn’t quit because I learned so much during that time.  That’s when I saw an opportunity in healthcare.  I spent my time learning everything I could about the healthcare industry, and contacting medical practices to pitch our services.   That’s when our business really started to grow.

You are part owner and a contributor for How did you get into the Luxury Travel business?

I was born in Bolivia where I lived for 10 years and have also lived in multiple states. Travel and exploring new cultures has always been part of my blood. I met my LTM business partners in 2008.  Christine Gray, the founder and Editor-in-Chief, was the brainchild for Luxury Travel Magazine.  The web site was huge, it was targeted to a very specific niche, and we came up very high in organic search engine results.  What was missing was a sound revenue model, and someone who could represent the company to prospective advertisers, mainly luxury hotels.  That’s where I came in.  They offered me an equity stake in their company along with a great commission structure if I could bring in new advertising partners.  Over three years, I brought in more than 120 luxury hotel advertisers.  I was also able to explore another passion I have – writing, as a contributing writer for the magazine. I built some great contacts in the luxury hotel industry and also got to travel to some of the most exotic destinations in the world.

Where is your favorite vacation spot?

The Amalfi Coast, in Italy.  The natural beauty, elegance, and understated luxury of towns like Capri, Ischia, Ravello, Sorrento, and Positano are simply unrivaled. John Steinbeck once wrote that Italy’s Amalfi Coast “is a dream place that isn’t quite real when you are there and becomes beckoningly real after you have gone.”  That is so true.  Being in Amalfi is like being in a dream.

How do you think BHP prepared you for what you are doing now?

It taught me the value of hard work and discipline. My two accounting classes were the hardest classes I had ever had. And I was surrounded by super smart and talented people at BHP, where everything seemed so easy to them.  I felt I had to study harder for my A’s all while working 20 hours a week at a part-time job to pay for my school.  But at BHP, I learned that while someone may be talented, 90% of your success comes from discipline, how you practice your talent, and what you do with it. I wasn’t the best at accounting and finance, but I became good at it by practicing. Hard work and discipline will take you a long way.

You specialize in helping companies create their perfect plan. What advice would you give to current BHP students to help them create their own perfect plan?

When you are developing your own perfect plan, remember this quote by Vince Lombardi: “Perfection is unattainable.  But if you chase perfection, you can catch excellence.” Pick something you absolutely love and pursue it honestly, yet relentlessly.  Spend your time doing something to better yourself to pursue your goals. Instinct is not going to carry you through this entire journey.  It’s what you do in the moments between inspiration that will define your success.

Is there any  other advice you would give? 

Find a good mentor. I have had some wonderful mentors and what I have learned is that some people have to learn from experience, but a good mentor can help you profit from others’ experiences. It doesn’t have to be someone much older, it can just be someone you respect and who can be really honest with you about what you are doing. Good mentors help you be objective and see things in a different way.

Alumni Spotlight – Liz Williams, VP of Business Planning and Strategy for Taco Bell

As VP of Business Planning and Strategy for Taco Bell at Yum! Brands, Liz Williams, BBA, BHP ’98, leads the financial planning, marketing analysis, and strategy teams. She contributed to the smashing success of the newly launched Dorito Locos Taco, their most popular product ever, and has worked to improve the Taco Bell brand to make it more relevant to consumers.

What do you love about your job?
I love the great interaction I have with all of the business partners. In my role, I get to work closely with people in every function, from marketing, to finance, to operations. I also really love the Taco Bell brand. It has a great following and Yum! Brands is a terrific company to work for.

Any there any fun perks?
I get to eat a lot of tacos! I also really enjoy the recognition culture. We are very good about recognizing team members for their hard work and I think that is important. Working for Taco Bell, I get what the brand has to offer, but I also get the breadth and experience of the parent company and sister brands, which include KFC and Pizza Hut.

How did the Drive-Thru Diet® Menu come about?  How have you had to change strategy during this time of increasing emphasis on eating healthy and increased scrutiny on fast food chains?
This menu has been around for a couple years now, and it includes our Fresco Style items.  The menu has reduced calorie and healthier options. It’s important for us to find a balance in our menu offerings. We want to provide healthier options, but also keep people’s favorites on the menu. We just launched the Cantina Bell Menu that was inspired by celebrity chef Lorena Garcia. It has elevated quality perception and created more choices for consumers looking for layers of flavors.. The idea for it came from consumer insight calling for a better and more relevant Taco Bell. One great thing about being in the restaurant business is that it is easy for us to get consumer feedback because our customers are in our stores and using social media daily. Our store managers are listening to their feedback and bringing that information to us to drive strategy.

What was the strategy behind the launch of the Dorito Locos Taco and why do you think it has been so successful?
DLT, as we call it here, is something we really get excited about- —we sold more than 10 million in just 10 weeks! Going back to the better and more relevant Bell, we were trying to find a way to highlight the better Bell. We were talking about ways to make the taco shell better, while also doing something really innovative to celebrate Taco Bell’s 50th anniversary. Our brand and the Frito Lay brand ended up coming together in a co-branding partnership to create the DLT. The launch was done through a hybrid of media, focusing on social networking platforms. We saw a lot of success using this new launch model. DLT has had great sales, great customer feedback, and it is good for the operations because we know how to make tacos. I think the product has been so successful because it is a craveable product and it was the perfect trifecta of great marketing, innovation and operations. Financially it has also been great for us because we can price it at a premium. It is rare that you get a product that is a slam dunk in all of these areas. We plan to make a platform out of this and will have more innovation to come with new Doritos flavors in the future.

Yum! Brands has a presence internationally. How do you change your product strategy to accommodate for cultural differences?
Taco Bell is starting to expand globally, but is still pretty much domestic. When we expand into international markets though, we do try to balance the global brand with what local has to offer. I did some with this when I was at Yum! Brands before moving into my Taco Bell role. Yum! Brands’ growth outside the US is a huge initiative for us. We are putting resources into global growth and are working to make our products relevant to the local market. We are just at the beginning of global growth for Taco Bell.

How did your career in consulting and sales translate into corporate strategy work?
Being in sales gave me the confidence I needed to help me deal with the thrill of winning and the reality of rejection. It also got me deeply rooted and really focused on a goal and objective. Consulting was influential in giving me a well-rounded background in problem solving and being objective when looking at problems and opportunities. It also helped me to be a quick learner and to be comfortable working in new situations with people on the fly. One big change that I had from working in consulting is that in consulting, the work is theoretical, but in the restaurant industry, execution is important. In consulting you don’t have to worry as much about taking people with you or creating buy-in for your strategy, but that is crucial to success in this industry.

Were there any skills or lessons you learned in the BHP that have been invaluable to you in your career?
BHP was very rigorous and that challenge helped me up my game, ask questions in class, and develop my inquisitive side. The caliber of the professors and students made me realize I needed to bring my A-game to everything I did. When I was interviewing for jobs, having BHP on my resume helped me get opportunities since employers knew the reputation of the program. The program also helped me learn to work with teams. If you can’t work together with a team, then you are going to have a hard time in the professional world.

What advice do you have for current BHP students?
Challenge yourself in any work situation to gain more experience. Get as much experience as you can and keep challenging yourself to take on new things. When you feel like you are out of your comfort zone, that is the best time for growth. You can use the skills you are gaining to re-brand yourself if you need to down the road. I didn’t switch employers to do this, I just constantly asked for different opportunities.