Achieving Success in the Lower Middle Market

Summary

Kevin Ramsier, CEO of Sire Capital Partners and Rival Capital, shares his journey in the M&A industry. He discusses his background and the motivation behind starting his own business. Ramsier reflects on the importance of aligning personal values with business decisions. He shares his experience of buying and selling companies, including SWOT Environmental and Sage Integration. Ramsier also discusses the role of partnerships and relationships in finding deals and the importance of buying businesses at the right price. In this conversation, Kevin Ramsier discusses the due diligence process, deal sourcing, building relationships with sellers, and working with unmotivated sellers. He also talks about flexible deal structures, managing sellers through change, and maintaining confidentiality in deal discussions. Kevin shares insights on understanding seller goals, challenges of transitioning ownership, and handling disagreements and respect in partnerships. He explains how to select partners, evaluate potential deals, and assess financials and growth prospects. He also highlights the strategic competitive advantage in the greenhouse industry and the importance of capitalizing the business and preparing for headwinds. The conversation concludes with a discussion on partnership structure.

Takeaways

Aligning personal values with business decisions is crucial for long-term happiness and success.

Building relationships with family offices, private equity firms, and other professionals can lead to deal opportunities.

Timing and pricing are key factors in successful acquisitions.

Having a clear growth strategy and leveraging unfair advantages can drive business success. The due diligence process involves legal due diligence, insurance and risk due diligence, and quality of earnings due diligence.

Building relationships with sellers is crucial for deal sourcing, with half of the deals being off-market and the other half coming from failed processes.

Flexible deal structures, such as allowing sellers to roll equity and providing strategic guidance, can be attractive to sellers.

Managing sellers through the transition involves understanding their goals, being patient, and providing support and creative solutions.

Confidentiality is maintained through signing NDAs and emphasizing the importance of trust and respect.

Understanding the seller's financials, growth prospects, and strategic competitive advantage are key factors in evaluating potential deals.

The greenhouse industry offers growth opportunities, particularly in design, build, maintenance, and repair verticals.

Properly capitalizing the business and preparing for headwinds are essential for long-term success.

Selecting partners requires finding complementary skills and personalities that align with the company's vision and values.

Chapters

00:00 Introduction and Background

01:11 Starting Sire Capital

04:34 Making the Decision to Leave Invesco

06:25 Buying SWOT Environmental

07:06 Financing the Acquisition

09:11 Selling SWOT Environmental

11:49 Acquiring Rescon

12:32 Acquiring Sage Integration

23:02 Finding Deals through Relationships

24:23 Timing and Rules for Buying

26:39 Due Diligence Process

27:13 Deal Sourcing

28:08 Building Relationships with Sellers

28:30 Working with Unmotivated Sellers

29:00 Flexible Deal Structures

30:08 Profile of a Seller

31:11 Managing Sellers through Change

32:19 Confidentiality in Deal Discussions

34:41 Understanding Seller Goals

36:15 Challenges of Transitioning Ownership

37:21 Disagreements and Respect in Partnerships

38:06 Selecting Partners

40:13 Evaluating Potential Deals

41:46 Assessing Financials and Growth Prospects

43:06 Strategic Competitive Advantage

45:00 Greenhouse Industry Growth

46:00 Verticals in the Greenhouse Space

49:23 Capitalizing the Business

52:21 Preparing for Headwinds

53:39 Partnership Structure