Here is why an experienced private equity investor chose VBB Advisors
Kyle Loughran is not your typical convenience services operator. He was attracted to the industry for many reasons, including micro markets and new technology. With a background in private equity, he had been involved in over 30 M&A deals before starting Legend Food Service. With all his experience in deal making, when it was time to sell the company, he turned to Mike Kelner and VBB Advisors.
Not traditional
For Loughran, the journey to becoming an operator was anything but traditional. “I'm definitely not from the industry,” he explained. “My background is with private equity mergers and acquisitions. We saw an opportunity in the vending space. We decided to acquire companies that did not want to invest in technology and grow. Our first acquisition was in 2018, and we grew the company to over 30 million in top line revenue at one point.”
Unfortunate timing
For Loughran and Legend Food Service, the timing was not good. “Starting it two years before COVID, in the early stages of the company, we needed to take on a lot of outside capital, from investors and lenders. You can't really have the hiccups that COVID gave us, and so many others in the industry,” he said. “We could have overcome just COVID. Then, when the supply chain issues really hit the industry towards end of 2021, just from a financial economic standpoint, Legend wasn't going to be interesting anymore to investors.” Loughran and his team ultimately decided to sell the company.
Ongoing communication
Having been around the industry for so long as an operator and as a sell side broker, I always try to help operators succeed. I enjoyed numerous conversations with Kyle during his journey as an operator, and he appreciated that. It is the kind of feedback that I am proud to receive.
“I talked to Mike from early on when I was just getting ideas for Legends,” Loughran said. “I thought reaching out to a broker would be a good idea. Mike was always extremely professional, extremely responsive. He's forthcoming where he can be forthcoming and was very helpful. He would take phone calls with me just to talk about the industry and share information without any expectation of payment or consulting or doing something in the future. That approach always goes a long way for me in terms of goodwill. Mike is a real, stand-up guy to do business with.”
Choosing VBB Advisors
“I know other brokers, but Mike was my first and only call,” Loughran explained. “Even when talking about fees, I felt from our past dealings that we'd be able to work together in good faith and come to a number that we would both agree on, which we did. I also had experience working with Mike on a deal where we were the buyer. It was a great experience from the buyer's perspective because that deal was with a seller who did not want to share a lot of information. Mike was able to get their financials and get their asset information and performance to us in a very digestible format. He facilitated the deal in a way where I don't know if we could have gotten it done if Mike was not involved” he added.
The benefit: “High six figures”
Why would an experienced M&A oriented entrepreneur choose to work with a sell side broker instead of doing the deal on their own? Loughran outlined several reasons why he chose VBB Advisors. “M&A is hard,” said Loughran. “It takes a lot of time and focus. Mike is an expert in M&A and he will get you the best offer. I don't think a full-time operator is going to have the bandwidth to focus on a deal the way Mike does. That extra bandwidth on the front end of the deal translates to dollars,” he said. “For us, using Mike translated to multiple offers – the benefit was high six figures.”
Using VBB Advisors is a “no-brainer”
“It's his full-time job to negotiate with all the buyers for you, make sure you are protected, make sure the details are covered. It pays for itself. As experienced as I am, I thought it was a no-brainer to have Mike Kelner and VBB Advisors on my side of the table,” Loughran noted. “I almost thought of him as the chief enthusiasm officer for the deal. Mike was out there getting all of the potential buyers excited about the deal, so I could focus on running the business. We were in good hands with Mike Kelner.”
