Doug Robbins is President and Founder of Robbinex Inc., an internationally renowned Canadian Business Intermediary and Business Broker. He is a seasoned businessman having completed more than 1,000 assignments relating to advising clients on mergers and acquisitions; valuations; transferring businesses to the next generation; partnership resolutions; refinancing; along with numerous other consulting activities. He has completed more than 400 business sales; and invested in 32 businesses. Doug is a licensed Real Estate & Business Broker in the Province of Ontario. Doug was one of the founding directors of the M&A Source and has actively supported the M&A profession through investing significant time and energy by way of memberships, lecturing, and presenting workshops in numerous M&A organizations.
Tell us about your pre-M&A career and how it led you to do this work?
In 1968, after 10 years with the telephone company, I decided to go into the pizza business with my friends. The first store was highly successful, and we sold that store as a franchise and opened a second store. We then acquired two additional stores. Unfortunately, a partnership dispute resulted in my leaving the business.
My next major activity was as a franchise manager with A&W restaurants for the Province of Ontario. I oversaw the operations of 100 stores, with my primary responsibility being to sell new franchises and resell existing ones when owners wanted to retire.
What personal characteristics and strengths have supported your success in this industry?
I had extensive sales training when I was with the telephone company. My greatest strength is my ability to listen and develop conversational dialogues in which we learn a great deal about our clients, their strengths, their weaknesses, their fears, opportunities and their threats.
What is your greatest M&A accomplishment?
In my opinion, mergers and acquisitions are a team sport. We have identified at least 33 different job descriptions that a competent M&A Intermediary must be able to manage.
I believe my greatest achievement has been developing a team of specialists with different responsibilities that work together as a team to meet the needs of the client.
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.
Do you just do M&A or do you provide other services – valuations, consulting, etc.?
Robbinex has positioned itself as a consulting intermediary. I would estimate that more than 50% of our gross revenue historically is from consulting type activities including:
- intergenerational transfers
- partnership disputes resolutions
What is the biggest mistake you have made when working on a deal?
Trusting people. Over the years, I’ve been involved in over 32 partnering arrangements with people that I trusted, only to be seriously disappointed in at least half of them.
What are the three most important qualities that you think a good M&A advisor needs to have?
There are dozens of qualities that a competent M&A advisor requires to be successful. Some of the most important ones are:
- the ability to listen,
- to develop trusting relationships and
- to take the time to thoroughly research your client’s business.
What is the most interesting deal that you are working on today?
Well, as you know, that is confidential.
However, one of the more recent transactions I worked on was a firm with a proprietary product that was patented, enjoying revenues of approximately $3,000,000 a year, and earning an EBITDA of $500,000.
Our research indicated that the company’s product was only being sold in a radius of approximately 300 miles from his home location. We recommended that he expand that radius to about 600 miles using distributorships.
He came back to us two years later with sales of $6,000,000 and EBITDA of 1.5 million dollars and an unsolicited offer for $6,000,000, wanting our advice on whether to accept that proposal.
Our research indicated that this unsolicited offer came from a buyer who was selling similar type products in a market radius of about 1,000 miles. However, our research also identified a competitor to this buyer whose market radius was basically all North America and Europe.
We approached this buyer to see if they were interested in adding this patented product line to their business and they responded with an offer of $14.5 million dollars.
How long have you been an M&A Source member and what do you get out of your membership?
I was one of the founding directors of the M&A Source in 1991.
As a seasoned M&A advisor, what changes and trends do you see on the horizon that will impact M&A?
Just after the recession of 1974, the law profession in Canada changed their billing techniques from being a success fee as a percentage of a transaction to being hourly rated.
I believe it is highly probable that the high success fees paid to business intermediaries are gradually going to fade into the sunset over the next 15 or 20 years and Business Intermediaries and Business Brokers are going to be paid more in line with hourly rated fees, much like accountants and lawyers.
What advice would you give to new people entering the profession?
New people entering this business need to become expert at facilitating expertise.
They need to listen intently, develop trusting relationships with their clients, research extensively, and be creative in finding solutions to problems.
The business of mergers and acquisitions is so complex that not one person can have all the skills required to successfully complete a transaction. They need to understand the problems and have access to the expertise of experts to facilitate the solutions.
Please tell us something about yourself that has nothing to do with your M&A career.
I like to think of myself as being community-spirited, being involved over the years in many activities within our communities including:
- Rotary International
- Retail Merchant Associations
- Chambers of Commerce
- Neighborhood street functions
And, my wife and I hosted 22 youth exchange students from around the world, each for three months or more, through Rotary International’s Youth Exchange Program.