STEVEN KOCH IS NOT OUT TO IMPRESS YOU WITH HIS résumé. The 51-year-old co-chairman of global mergers and acquisitions for Credit Suisse Group would rather discuss his favorite hot dog stand or his fundraising for Democratic presidential candidate Barack Obama than his latest transaction. Even when he does talk about deals, his first instinct is to minimize his role.
“I’m a little offended when I read that ‘so and so did this,’” says the native Chicagoan, who works out of Credit Suisse’s office there. “It may be something you’ve worked on, and, you know, yeah, they may have been more influential than somebody else, but it’s not really the way this industry has worked for a while -- that people single-handedly do deals.”
Paradoxically, Koch often wins the ear of clients because he doesn’t pound the table insisting they listen. “I think of him as a partner who helps you think through what you need to do,” says James McDonald, CEO of Scientific Atlanta, whom Koch advised on his company’s $6.9 billion sale to Cisco Systems last year, capping a 15-year relationship. “He’s low key, but he’s extremely good at what he does.”
William Perez, president and CEO of Wrigley Co., hired Koch for three acquisitions made by S.C. Johnson & Son, where Perez was president and CEO from 1996 to 2004. Recently, he enlisted the banker’s services again, though he declines to give details. Perez is unreserved in his praise for Koch: “When Steve thinks you’re moving beyond a rational price for something, he’ll tell you. He doesn’t have this overwhelming desire to get a deal done. He has a desire to get the right deal done at the right price.”
This year, apart from providing advice to utility TXU Energy’s board in its $32 billion sale to Kohlberg Kravis Roberts & Co. and TPG, Koch helped guide Nestlé in its $5.5 billion acquisition of baby-food maker Gerber Products Co.
Although he has worked on a wide range of situations in diverse industries, Koch has a particular expertise in helping companies deal with hostile acquirers or shareholder activists. He advised electronics manufacturer AMP on its defense against AlliedSignal in 1998; AMP eventually sold to Tyco International. His work on that situation impressed Joseph Magliochetti, an AMP board member who became CEO of auto-parts maker Dana Corp. and hired Koch to help fend off a hostile bid from rival ArvinMeritor in 2003. The banker has been involved in a number of recent defenses of corporations against shareholder activists, though he declines to name the companies because they have not been made public.
“Most of the time it’s below the radar,” Koch says of company battles with activist shareholders. “That’s the objective. If somebody takes a stake in a company, the best outcome is typically not to have that blow up into some big ugly public fight.”
How to deal with activist shareholders is a central part of a seminar for corporate directors that Koch organized and teaches twice a year with Steven Kaplan, a professor at the University of Chicago Graduate School of Business.
Koch’s laid-back style appears to be informed, at least in part, by a sense that there are far more important things in life than working on deals. In 2001, after serving as Credit Suisse First Boston’s co-head of M&A for eight years, the father of three stepped down with his two co-heads, Gordon Rich and D. Scott Lindsay, fulfilling a promise they had made to each other to slow the pace of their lives. Shortly afterward, Rich died in a car accident. Around the same time, Koch’s wife, Ellen, was diagnosed with ovarian cancer. She died two years ago.
“For three and a half years, the firm let me dial back what I was doing so I could spend a good chunk of life taking care of Ellen and the kids. At the same time, I was grateful to be working in a project-oriented environment, so every once in a while I could take something on that allowed me to have something in my life besides fighting cancer every day.”
