29 Nov Business matchmaker rides growth wave: Tulsa M&A consultant foresees
Published in the Journal Record
November 29, 2005.
Written By Tim Spencer
David Perkins could talk the ears off an elephant and make the behemoth enjoy it.
Everyone seems to know the magnetic Tulsa native. Joining him for a Stonehorse Restaurant lunch catches the 40-year-old father of three little girls conversing with a family clearly pleased to renew his acquaintance. The pattern repeats itself every four minutes as someone – a beautiful mother holding her child, a respected defense attorney, a fellow executive – stops to greet the CEO with movie star looks and boisterous charm. On reflection he noted he hadn’t visited the restaurant in weeks, which might need changing.
Tulsa’s a big city with a small community atmosphere, said Perkins, a 1992 Notre Dame MBA grad who could double for Matt Damon. You can go downtown and you can’t help but meet someone you know.
That gives the merger and acquisitions analyst an edge for this market, which he uses in his global quest to link for sale companies to buyers ready to expand.
Twenty percent of business owners want to sell at any one time, he said. The seller wants to sell after he’s had multiple good years in a row. The buyers want to buy when they foresee good things in the future.
All that makes good business for Perkins, who in 2000 started the consulting firm Vercor with four other lone rangers across the nation to network their efforts and better corner the market. The M&A middlemen have since added five franchisees. Perkins hopes to expand Vercor to 25 offices within the next three years, with potential affiliates in Mexico, South America and Europe.
As Vercor’s sole operator in Tulsa, D.L. Perkins LLC completes about two business transactions a year, drawing profits of $500,000 to $700,000 from each deal. That represents about half of the pacts his staff pursues at any given time, for which his firm receives $25,000 upfront plus hourly consulting fees. The LLC also rakes in a fifth of Vercor’s net income.
And that’s not the only revenue stream flowing into his coffers.
In 2001, Perkins bought the newsletter The Business Owner, which publishes six issues a year for a $199 annual subscription. But only 5 percent of its circulation comes by that route; the rest hit the mailbags under a client’s name as a private label bulletin. Among his 60 clients: BOK Financial. The 32,000-circulation publication contributes about $600,000 in revenue to David Perkins LLC each year.
By the end of next year, it damn sure better be 40,000 or I’m going to kick some butt, Perkins said with a laugh.
‘A lot of moving parts’
While the M&A industry endures cycles as most other sectors, Perkins said today’s maligned marketplace remains very good for his business. Despite the Federal Reserve’s battle against inflation, war economy concerns and fears of a housing bubble, he pointed out that debt equity remains cheap, interest rates low, outlooks optimistic. And most of the companies he represents are not dependent on the Oklahoma market.
Even if Tulsa’s not doing well, the sellers can be doing well because they have customers all over the world, he said. Not that he doubts the strength of Tulsa’s economy. Look at these restaurants, he said of the Utica Square activity. They aren’t cheap restaurants, and they’re full. And a lot of homes are being built. So where is it all coming from?
His firm’s true strength comes from the difficulties inherent in buying and selling a business.
You don’t learn in school how businesses are valued, he said. There are a lot of moving parts.
That’s where consultants like Perkins come in. In the past, accountants and attorneys dominated the M&A field, often without the background and experience necessary to evaluate a firm’s potential or comprehend its true fit to a buyer.
The core is, people want to know what they can do with them when they buy, he said. They want an assessment, of strengths, weaknesses. I provide that.
He also advises owners who want to sell their businesses on what to do to make them more valuable. That has grown into a side consulting business: I probably work on six consulting deals at any one time.
‘Didn’t have a prayer’
Perkins learned the ropes from his start in the financial services sector. Gathering his diploma from Notre Dame in ’92, his first job came with NationsBank in Dallas. Moving to Tulsa, acquisitions led him back to NationsBank as he worked first for Bank Four, which Boatmen’s bought and NationsBank gobbled up.
In 1995 he leapt into management with a chief financial officer’s post at a Tulsa software company rapidly growing the wrong way. So the following year he started a software distribution company of his own.
And it didn’t have a prayer, he said, laughing. After struggling about six months, we sat down with our investors and we said, ‘This isn’t going to work.’
So the young executive launched Acquisition Advisors in 1997, hitting trade shows, knocking on doors, talking to anyone who would listen. For a year nothing happened, but no one panicked.
If you’re willing to have people laugh at you and learn from the experience, you’re going to succeed, he said. If you work at what you’re doing, pretty soon they’re not going to be laughing at you any longer.
Perkins’ first deal came with the $3 million sale of Tulsa Power Producers. The following year he arranged the $6 million acquisition of Sefco. After that, the marketplace opened up, spurring Perkins to link Acquisition Advisors with four similar operations across the nation to form Vercor.
Now we can focus on businesses with revenue of $5 million to $50 million, he said.
Dressed for comfort in a navy blue sports coat, plaid sport shirt and slacks, Perkins bubbled over with confidence, his hands dancing in animation of his words. But while proud of his accomplishments, he slid into humble admissions with ease – all in illustration of his growing experiences.
I just want to make a lot of money, have a lot of fun, he said, chuckling. When you help a business owner get what they deserve, that’s fun. When I write a column in my publication and a guy calls up and tells me that I helped him with this and that, that’s fun.
D.L. Perkins LLC now employs a staff of six in Tulsa, with three doing M&A work, three putting out The Business Owner. And then there’s Perkins himself, who edits and writes for the newsletter while playing matchmaker with companies.
And I’m a lousy writer, he said, not mentioning he had received the 2005 Small Business Journalist of the Year award from the U.S. Small Business Administration. I pick and scratch at it, and somehow it gets done.
To further his credentials, Perkins set a goal in September 2004 to secure 20 paid speaking appointments in a year. To his surprise and joy he met the goal, earning up to $2,500 a speech.
I just got hired to give my first keynote address, he said, although he added that his client didn’t know it was his first. I mean, I have no business giving a keynote address. I may very well fall flat on my face. But if you live out of fear, you never accomplish anything.