Rick Milenthal’s dealmaking philosophy focuses beyond the financials

 
For more than 30 years, Rick Milenthal, chairman and CEO of The Shipyard, has been active in investments, transactions, mergers and partnerships.
He estimates that he’s been involved in about 20 deals during his career in the marketing services industry, as he’s tried to keep a national and sometimes international footprint.
Milenthal’s latest joint venture does business as The Shipyard. It was formed in 2013 by joining his companies, People To My Site LLC and Fugent Inc. The Shipyard also just acquired advertising and marketing services businesses in the Denver, New York City and Los Angeles areas, which brings the employee count up to more than 160.
“We look at acquisitions, in our business, in the marketing services business, as almost as much as talent acquisition, as transactions,” he says.
Acquisitions can expand client relationships or attract talent. Milenthal also utilizes that talent, including the former business owner and entrepreneur, to create organic and transactional growth.
Through deals large and small, Milenthal has built up certain philosophies. When he didn’t follow those tenants, the transactions weren’t as successful.
“I don’t learn these things out of any prophetic tendencies,” he says. “We learned how to do this well and we’ve learned how to do it poorly — and doing it well is a lot more fun.”

Consider intangibles

Whether you’re acquiring a company or selling one, you need to be more than financially or growth oriented. The people and cultures are more critical than the financial structure, Milenthal says.
“Don’t let opportunity trump strategy, meaning that you really do need to do these things in a strategic way,” he says.
When you’re acquiring another organization, it should be about building a more vibrant organization — adding people who can create something that will generate growth.
“We don’t do (these transactions) for savings. We don’t do them for infrastructure or efficiencies,” Milenthal says. “We do it because one plus one equals five and it creates growth.”
Picture the day after the transaction, he says. Ask yourself: Will this be more positive? Will this be more vibrant? Will this be a growth opportunity for my people and company?
“If you like that picture, then come back and start to work out what the arrangement will be,” Milenthal says.