Interviews
An Interview with M&A Source Member, Gary Rayberg
Tell us about your pre-M&A career and how it led you to doing this work?
I started, or bought and then sold several companies from the age of 22. The companies were in the commercial cleaning, moving and storage, employee relocation management and office coffee service industries. This experience helped me better understand the process and the concerns of my clients later.
What personal characteristics and strengths have supported your success in this industry?
A positive, don’t give up, stick to the plan attitude. In my younger days I was a long distance runner. I am now a long distance bicyclist. I compare getting a deal to closing to the obstacles on a 100 mile bike ride or a marathon. You need to persevere and never give up.
What is your greatest M&A accomplishment?
Building a regional M&A practice with multiple brokers in multiple states. I have been lucky enough to be able to introduce and support some great M&A brokers (and business brokers, too) entering the profession, helping them grow to be successful. I now work for one of the best intermediaries I have ever met. He bought ROI Corporation after working with me at the firm for a decade. Seeing him and the other brokers at my firm succeed is my most important accomplishment in the profession. On an even level with that is, of course, the honor of helping many clients over the years sell their most valuable asset and enter successfully into the next stage of their lives.
With regard to the majority of your engagements, do you work as a team or do you handle things on your own?
I personally now work the majority of my engagements on my own with the support of a marketing person and an excellent admin. At ROI, we do function as teams on many projects. This happens with newer brokers or if a broker wants to enlist the help of another broker who is a specialist in an industry. Depends what is best for our client to get a deal done.
Do you just do M&A or do you provide other services – valuations, consulting, etc.?
About 75% of what I do is represent seller clients. 25% is Opinions of Value for multiple purposes, and consulting for known party ownership transition to key employees and/or family members.
What is the biggest mistake you have made when working on a deal?
Many years ago, I learned about the controlled, informal auction process at an M&A Source conference. Since then, we almost never go to market with an asking price on an M&A deal. Early on, I advised a helicopter engine rebuilder that his company was worth a 4 multiple of EBITDA based on data I researched and that our asking price should be in that range. Another broker sold him on no asking price, so he signed with them. He received an 8 multiple of EBITDA for his company. I am glad he went with the other broker, as I would not have done as good a job at that point. With that said, it was an expensive lesson for me.
What are the three most important qualities that you think a good M&A advisor needs to have?
Beyond the math and the technical knowledge, you need to be able to… 1, Read people. You need to size up buyers and sellers to know if you want to work with them or not. You only have so many opportunities to get paid, and wasting months on the wrong one can be costly. 2. You need to see failure as an opportunity to learn and improve every time, so you do not make the same mistake twice. 3. Be open to and seek education from courses and other successful Intermediaries. My career was made by attending conferences at NEBBA, IBBA and M&A Source. I learned so much, not just by taking the courses but from the discussions with other brokers. I remember being welcomed at my first IBBA conference and getting to sit at breakfast and lunch with the leaders in the profession and listening to their advice, which was priceless.
What is your most interesting deal that you are working on today?
A $28,000,000 revenue company which is a supplier to the heat pump industry. I believe this industry is about to explode with growth.
How long have you been an M&A Source member and what do you get out of your membership?
I joined IBBA in 2005 and M&A Source around 2010. As I mentioned earlier, knowledge from conferences and most importantly, networking with other professionals has been so beneficial to me!
As a seasoned M&A advisor, what changes and trends do you see on the horizon that will impact on M&A?
With the codification of the CBI No Action letter, we are free to pursue larger deals that were previously only available to SEC licensed Investment Bankers. I see my firm and others like it aggressively pursuing larger deals as more and more owners age out.
What advice would you give to new people entering the profession?
1 research the industry by joining IBBA, M&A Source, and your local IBBA affiliate 2 Have enough money in the bank to comfortably live for 12 to 18 months 3 Be prepared to enjoy continuous learning as you never know it all 4 Seriously consider joining an established firm with an internal training and mentoring program. This should shorten the time it takes to start making money in your new profession. 5 My experience in hiring tells me that sales skills, people skills, and perseverance are qualities that are more important than having a degree in finance or accounting. You can learn that!
Please tell us something about yourself that has nothing to do with your M&A career?
I am currently working while traveling the country with my wife in a motor coach. Since September, we have been on the move seeing this amazing country from north to south and east to west. We are currently living next to the beach on the Oregon coast. If anything good came out of Covid, it is that my clients are happy to work with me remotely, except for an occasional flight to meet with a new client.