TownHall’s Bobby George

Every dealmaker remembers “the one that got away,” none more so than Cleveland businessman Bobby George.

“There were a few real estate deals I passed on in 2009, and every time I drive by them, I get a feeling in the pit of my stomach,” says George, owner of TownHall, Barley House and Rebol, as well as founder and president of George Capital Partners. “It’s cost me millions of dollars.

“I was so cautious because I was just starting to make money and I didn’t want to overextend myself. I didn’t have the deal principles then that I have now.”

Today, George consults his list of dealmaking principles on a weekly basis – and uses them to inform his investment decisions.

“Every dealmaker has different principles that are important to them,” he explains. “As long as you stick to those principles, you’re usually successful.

“I focus on companies that I can handle —­ smaller to midsized companies, or cash flow in companies that have some kind of asset backed. I try to avoid startup companies. And I love companies that, when I buy, I can use my knowledge to help generate revenue or turn the needle and add value.”

In this week’s Dealmaker Strategy, George talks about how he evaluates acquisitions to seize opportunity when it strikes.

Check for compatibility

If I can understand the business based on my experience, that’s the first step. If I can’t, I’m not interested. Once I understand it, I want to see how well the company is positioned and I want to understand the leadership. If I believe in the leadership and that the leader is the right person, I take the next step. If I don’t, I don’t have the resources to move forward and I won’t.

Approach your seller with compassion

If you approach [the seller] too aggressively, they might get offended. They might not be interested in a sale and might not see the synergy. As I’ve gotten older, I’ve gotten a lot more compassionate about how I approach someone. I don’t want to offend, and I don’t want to hurt someone’s feelings. They could take it the wrong way ­— as if you think they’re doing a bad job — when really, you’re interested in buying their business because they’ve done a lot of good things.

Ensure financial accountability

I want to see where the margins are, what potential growth opportunities there are and what the revenue is. Then the last thing I make sure of is that I can make the right deal. Any deal I do, I like to take control of and have majority ownership. If I don’t have majority ownership, I like to have the right controls in place where if they don’t hit financial benchmarks, I have the right to take over operations — immediately.

Don’t repeat mistakes, but do reflect on them

The reason I look back is that I don’t want to continue to make the same mistake. I can look back at properties I didn’t buy that I should’ve bought and analyze why I didn’t buy them.

Don’t let money be the deal breaker

Unless it’s something way out of your range and it’s going to take way too much time to put the money together, or it’s way too risky, if you can put the deal together and you know it’s the right deal, do it. Even if you have to give up more equity. As long as you can stay in control. I’ve learned that, and as I’ve gotten older, I’ve gotten a little more aggressive.

Related post: Owner of TownHall takes a bold, yet humble approach to dealmaking

Reading people is critical to acquisitions

If there is one thing that master dealmaker Gregory J. Skoda has learned from a lifetime of dealmaking, it’s that empathy is among the most critical components of an effective acquisition strategy.

“It’s a very different thing to be able to talk somebody out of their livelihood, to talk somebody out of the business they’ve built, to have them believe they are getting the maximum financial security out of this transaction for their families,” says Skoda, chairman of Skoda Minotti.

He speaks from the experience of hundreds of acquisitions in his career, including 135 deals he closed in just two years with billionaires Michael DeGroote and Wayne Huizenga when the trio started CBIZ in the mid-1990s.

When you craft an acquisition strategy, there is a whole host of data points that must be considered. But you can’t forget about the human element and its impact on a negotiation.

“A huge part of dealmaking is reading and understanding people,” Skoda says. “It’s trying to get inside their heads and in many cases, figure out what they want.”

In this first installment of Dealmaker Strategies, Skoda examines the risk of not fully exploring the wants and needs of the seller when pursuing an acquisition.

Words aren’t enough

When you’re negotiating an acquisition, you need to dig deep to understand the mindset of both the employees and the owner of the company you want to buy.

“Have you asked enough questions?” Skoda says. “Do they want to be there? Do they want to make you better? Do your employees want to work with their employees? You start to pull the covers back on how do all these people function together. Where do they want to go and how do they want to get there?”

Manage the data

When you’re in an environment where you’re rapidly growing by way of acquisition, the amount of data that one has to deal with and the amount of people that one has to deal with can be daunting at times, Skoda says.

“It really takes the right people assembled on our side of the ledger to input, control and manage the data; input, control and manage the people,” Skoda says. “It takes regular interaction multiple times a day with the teams that are involved so that everyone knows what’s going on. Use technology the way you can use technology to share information. You need to stay in front of the information.”

Assess the opportunity

As you get a sense for the people involved in the transaction and the data, you need to begin looking at the big picture, Skoda says.

“What are the attributes of this particular acquisition that mean something to us?” Skoda says. “Is it going to be transformational for us? If it’s going to be transformational for us, in what ways? Do we really have the team lined up that can take advantage of it?”

As you begin to narrow everything down, you can start to appraise the merits of the deal you’re exploring.

“Try to get inside everybody’s heads on the buy side and on the sell side,” he says. “What’s really the beneficial transaction here? How do we think about the people that we’re meeting? How do we think about the people that we’re interacting with? How do we put them together? How do we make one and one equal three or four or five in some cases?”

The bottom line

People can and often do get themselves into trouble because they don’t know what they don’t know, Skoda says.

“They thought they had it,” he says. “They thought they knew it. Probably in the first few acquisitions we did, we thought we had it. You can never in the dealmaking business think you know all there is to know. You’re going to get taught a lesson the moment you think you know everything there is to know. There always has to be this thought that there is something here that is going on. I don’t know what it is and I have to figure it out. If you can keep that intellectual curiosity in working through transactions, you’re going to be more successful.”

Buying a business

Making acquisitions can be a tricky venture — especially when it comes to aligning with your company’s growth plans. Hear from a roundtable of veteran entrepreneurs and experts as they discuss how to approach buying companies that fit their strategic goals. Moderated by Tucker Ellis’ Jayne E. Juvan, this panel features:

  • Ken Ganley, Ganley Auto Group
  • Jim Mooney, STERIS Corp.
  • Kelly Price, Imprise Financial
  • Becky White, Kenan Advantage Group

Register today for ASPIRE 2018 on May 3 — last year’s event sold out!

New speakers announced

Three savvy veteran business executives have joined the growing list of speakers at ASPIRE 2018:

  • Ken Ganley, president and CEO of the Ganley Auto Group, will talk about his company’s acquisition strategy.
  • Steve Potash, president and CEO of OverDrive Inc., will discuss his company’s sale to private equity and Rakuten.
  • R. Louis Schneeberger, executive chairman Proformex, will share lessons learned from helping build and sell numerous companies.

Join us Thursday, May 3 at ASPIRE — tickets are going fast!

Google executive to speak at ASPIRE 2018

Ted Souder, head of industry – retail, at Google will sit down for a question and answer session with Adam Kaufman, adviser at JumpStart, on May 3, 2018, at the Renaissance Cleveland Hotel during ASPIRE 2018.

A 16-plus year veteran at Google, Ted is currently the head of industry – retail. In this role, he manages a team that oversees the Google experience for some of the largest retailers in the world. His team is tasked with helping retailers leverage the power of digital and acts as the main point of contact for Google’s various products and services.

Prior to his role in retail, Ted lived in Paris, France, as part of an exclusive rotation program for senior leaders in the company. While in Paris, Ted oversaw key efforts in Southern and Eastern Europe, the Middle East and Africa as the head of international strategic sales and operations. Ted also served as a regular industry speaker, an employee mentor and was a member of the executive management team for the SEEMEA region. Earlier in his career at Google, Ted held a number of different leadership roles in sales and account management and was responsible for helping open and run Google’s offices in Chicago, Dallas and Detroit.

Ted is an early adopter having worked in the mid and late 90’s at early online brands AOL and Excite, as well as groundbreaking social music startup, Echo Networks.

Ted is actively involved in various civic and educational organizations. He is vice chairman of the Chicagoland Chamber of Commerce, a member of the executive advisory board of the Fritz Knoebel School of Hospitality Management at the University of Denver, and on the board of directors at both the Economic Club of Chicago and at 1871, the largest technology incubator in the United States.

Ted graduated from the University of Denver and resides in Chicago with his wife and two children.

Register today for ASPIRE 2018!