This month, we chatted with Scott Bushkie, CBI, M&AMI, M&A Source Conference Committee Chair, and Founder of Cornerstone Business Services in Green Bay, WI. With more than 20 years in the M&A industry, Scott is a recognized leader in the field, providing exit strategies, sell- and buy-side transitions, along with valuation services in the lower middle market.
Over the years, Scott has successfully executed hundreds of transactions, domestically and internationally, working with private equity firms, family offices, and strategic buyers, both public and private. Scott has the trust and respect of CPA and financial advisor alliances, investment banks, and other professional service firms around the M&A marketplace.
Tell us about your pre-M&A career and how it led you to do this work.
My pre-M&A career was shorter than most. I began working in M&A/business brokerage at the ripe old age of 24, 22 years ago in 1998. I was the kid with the lemonade stand and mowing neighbors’ lawns, anything to make some money. I had successfully run a business between my junior and senior years of college and held other successful sales roles, like selling Cutco cutlery door to door.
After college I wanted to firm up my leadership and finance skills, so I took a job with ALDI foods as a district manager overseeing four stores and around 60 people. After 2 years with ALDI, I wanted to do something different. My thought was big-ticket sales. I had no clue what that meant until I met someone in the industry and within three weeks, I knew this is what I wanted to do! Thankfully, ignorance is bliss as I was way too dumb and naïve to know the odds of me being successful. After 2.5 years or so, I started Cornerstone. It will be 20 years in January.
What personal characteristics and strengths have supported your success in this industry?
The passion to help people, solve complex problems, and the thrill of being in the deal. I would also say persistence and willpower, a “whatever it takes” attitude and confidence. I also believe I have a strength as a visionary to see things others don’t see as opportunities… sometimes I see too many “shiny objects” and get distracted. That is where Erica and my team help keep me in line.
What is your greatest M&A accomplishment?
Great question. Not sure if one thing stands out. I believe I was the youngest to obtain my CBI and M&AMI at the time (Bryce DeGroot and others now hold that!)
I am very proud of the team we have built here at Cornerstone and the passion everyone has to take care of our clients.
I was also honored to be the chair of IBBA and in 2021 will be the chair for M&A Source. I am proud that I was part of a team that was able to bring IBBA and MAS back together and find a level playing field that all thought was manageable.
Lastly, I closed a deal in a foreign country to a $3B buyer in 1 month and 24 days for 33 times EBITDA.
With regard to the majority of your engagements, do you work as a team or do you handle things on your own?
We work as a team. Each deal will have one M&A advisor responsible for it. Sometimes two on our larger deals but we have several support people behind them. Copywriters to interview the client and help write the CIM, an analyst and others to help with the buyer research, an admin to send and process NDAs and then give access to CIM, along with a person who holds each advisor accountable and helps manage the DD process by building out the virtual data room. Every win is truly a team effort
Do you just do M&A or do you provide other services – valuations, consulting, etc.?
There are three buckets:
- Valuations/Estimates of Value (EOV)
What is the biggest mistake you have made when working on a deal?
When I first started in the industry, I didn’t do nearly enough research to know if the client’s expectations were reasonable and wasted a lot of time with clients that had unrealistic price expectations. I’ve also worked on too many deals at once. Now we limit each advisor to no more than 3-5 deals at one time and we perform an EOV on each client before we will put together an engagement agreement for them.
What are the three most important qualities you think a good M&A advisor needs to have?
- Ability to build rapport/trust quickly with a client and or their trusted advisor
- Ability to say “no”, have tough conversations with clients
- Bonus: staying power or will power/whatever it takes attitude to make it happen
What is the most interesting deal you are working on today?
A company that manufactures plastic lumber. It is doing around $10—11M in revenue with a crazy 35%+ EBITDA margin for the TTM.
How long have you been a member of the M&A Source and what do you gain from your membership?
As long as I can remember. I get so much out of M&A Source. The courses and conferences are very helpful each year, but most important to me are the people! The members who I have gotten to know, the best practices that we have shared, and the friendships made. I even named my only son after one of them! Drew! Until COVID, I only missed two conferences since the fall of 1998.
As a seasoned M&A advisor, what changes and trends do you see on the horizon that will impact on M&A?
- I think it goes back to people and the team you build around you. I would also say the more you can develop a niche in a certain industry will serve you well.
- I believe in the philosophy that we are better together than we are apart. (As long as you have the right people around you, that is.) We started up a group called Cornerstone International Alliance to try to bring together the top lower middle market M&A firms to have year-round sharing of best practices, resources and contacts, access to industry experts in the group, and just have an overall bigger/deeper “bench” to pull from. I think that is the way of the future to leverage other like-minded professionals as no one person can do it all.
What advice would you give to new people entering the profession?
- Don’t be afraid to say “no” to deals that don’t make sense to you, where the seller is a jerk, or it is over-priced. Refer it over to your competition and let them waste their time on it.
- Focus on quality over quantity
- Build a great team around you that has the same passion as you do for the business
Tell us something that has nothing to do with your M&A career.
I was my daughter’s basketball coach for the last 2 years – you think a deal can get crazy – try coaching 31 fourth grade girls! Still crossing my fingers we will have a season this year but it’s not looking good!