CEO Paul Villella of HireStrategy recently shared why he sold his company ─ despite not actively looking to sell ─ and the results one year after the acquisition.
Paul addressed a packed room of CEOs, CFOs and senior-level executives from the Washington-DC area at “Grow or Die: A Panel Discussion on Middle Market M&A” hosted by Capstone and Access National Bank on April 23 at the Tower Club.
Paul, who founded HireStrategy in 2000, grew the firm from a three-person startup to the leading staffing firm in the Washington, DC area and to one of Inc. Magazine’s fastest growing firms in the U.S. By 2014, the company had reached $33.17 million in revenue. Paul was focused on investing in, and growing, the business when he received an unexpected phone call about a potential acquisition opportunity from the Addison Group, a Chicago-based staffing firm.
In his comments, Paul said he had a “walk away” attitude for most of the acquisition talks. Like many owners, he was not interested in selling his company. HireStrategy was growing without the acquisition – so why sell?
In our 20 years working with not-for-sale transactions, we’ve found this attitude is not uncommon. There are many reasons why owners say “no” to selling and also many reasons why they say “yes.” It is up to strategic-minded buyers to find the right equation that will change “no” to “yes.” Acquirers should remember that this equation includes much more than financial incentives.
So why did Paul decide to sell HireStrategy? “The Addison Group was willing to truly partner with us and structure the deal in a way that would allow me to continue running the business with my team,” he said. Paul and the Addison Group arrived at a solution that suited both parties.
Under the agreement, Paul maintained control of HireStrategy and, equally important, retained his core team. In addition, HireStrategy kept its own brand and his staff received improved benefits. The Addison Group was also willing to pay an aggressive multiple for the firm because it was a key part of its strategy plan to expand on the East Coast.
The staffing industry is notorious for poorly handled mergers, but HireStrategy’s transaction was successful. One year after the acquisition, the company has reached all its 2014 targets and is on track, or ahead, for all of its 2015 goals. In addition, the majority of the staff has stayed on.
During his presentation, Paul explained the process of the acquisition, including how and when he involved his investors, outside advisors, and legal experts, and how and when he communicated with the rest of his team. On a more personal note, Paul discussed the opportunities for growth not only for HireStrategy for himself as a leader.
Mike Clarke, CEO of Access National Bank, and David Braun, CEO of Capstone, also commented on trends in lending and banking, and the state of middle market M&A today.
HireStrategy’s story prompted lively engagement and questions from the executives in the audience. Our hope is that through this event and events like these, owners and executives will continue thinking about external growth as a pathway that holds great potential.
“Grow or Die” was our third event hosted by Capstone and Access National Bank.
Below are some photos from this exciting event.
Interested in strategic growth and mergers and acquisitions? Contact Capstone today.