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Bill Coppel:
Hi, I'm Bill Coppel, Chief Client Growth Officer at TradePMR, a Robinhood company.
Ryan Neal:
And I'm Ryan Neal, Senior Editor at TradePMR Robinhood. And welcome to the Synergize Podcast Live.
Bill Coppel:
That's right, Ryan. We're live here at the JW Marriott in Tampa, Florida for TradePMR's signature event, Synergy25. And we had an opportunity to sit down with Roger Overby of Skyway Capital to talk a little bit about what he does.
Ryan Neal:
Skyway Capital is one of our marquee sponsors, and I'm really excited about this conversation because I've been to lots of industry events where M&A is always a topic, but it's always about how to help advisors sell their practice. But as our listeners know, a lot of advisors work with business owning clients. They help manage some of the company finances. Maybe they help with the retirement plan. But when the time comes for those clients to sell their business, a lot of advisors don't get a seat at the table and until it's too late.
So, Roger joined TradePMR Chief Revenue Officer, Rob Dilbone, on the Synergy stage to talk about how advisors can be sure they have that seat at the table for those major liquidity events and how they can use that to help add value to their relationship with the client. So Roger, thanks for being here.
Roger Overby:
Yeah, thank you. appreciate it very much, Bill and Ryan. I'm excited to be here. It's been fun so far.
Bill Coppel:
It's great to have you with us. Just a little bit more about Roger: Roger is Senior Managing Director at Skyway Capital, a middle market investment bank specializing in mergers and acquisitions, capital markets, and private capital advisory services. To learn more about Roger and Skyway, please visit our show notes.
So, let's just jump right in, okay?
Roger Overby:
Okay, all right.
Bill Coppel:
Great presentation yesterday. I learned a lot, but I think our listeners are going to even learn more. So tell us a little bit about Skyway and who you're, you know, what are the kinds of firms that you serve?
Roger Overby:
Yeah, so Bill, yeah, thanks. So Skyway was formed in 2002 in Tampa. The firm's 23 years old now. Headquartered in Tampa, office in Atlanta. Probably have 40 folks around the country, salespeople in Seattle, LA, Houston, Boise, Idaho, Chicago, Miami, Jacksonville, and Greenville, South Carolina. So we got folks scattered all around the country. We spend most of our time focused on mergers acquisitions M&A for family owned and founder led businesses.
Those businesses can run the gamut from small business to a large business, $4 $5 million of EBITDA, $25 million-ish of enterprise value, all the way up $30, $40, $50 million EBITDA, $300, $400, $600 million enterprise value. Guys, we've probably sold, I don't know, 250 companies over the 23, 23, 24 years. $15 billion dollars of proceeds to those owners of those businesses. And every day, our goal is to have a conversation with a business owner about their future plans for that business. Whether it's, we're going to sell the business completely, we have relatives in the business, maybe it's our children. Maybe it's a father, a mother, a key employee that's in the business. How do we go about that? How do we protect those people? How do we whiteboard out exactly what we're looking for and when a transaction closes? And it's just an incredible amount of fun.
Bill Coppel:
That sounds good.
Ryan Neal:
So advisors are often in the business of future plans, right? So how do advisors fit in with what you guys are doing at Skyway?
Roger Overby:
That's a great question. So, a couple years ago, we actually had an advisor pick up the phone and call us about a client that they've had for quite some time, second generation business. They've been managing the family's money for quite some time. But they had decided that they wanted to sell the business. And the company was quite large, a roofing company in South Florida. And so they, the owner, invited six firms like Skyway to come pitch the deal to see who he was going to hire to go out and sell the family jewel, if you will.
And so, the advisor invited us in. We wound up being one of the last two firms that they were considering. The other firm was Raymond James. And so, I mean, Bill, so the advisor's concern was if Raymond James wins the mandate to represent and sell this business, that $200 million dollars plus of closing proceeds would wind up in Raymond James' wealth management platform.
Ryan Neal:
Yeah, absolutely, 100%.
Roger Overby:
And Ryan, that that advisor would lose that relationship. And so, the advisor was our biggest advocate. And as we went through that transaction with the advisor, kind of that that light went off in our head and, oh my gosh, we need to be talking to as many advisors as we can because if they have business owner clients, they could face that same dilemma at some point time in the future, and we could be a great ally and resource and partner to help them out in that type of a transaction.
Bill Coppel:
Let's drill down on that a bit because, you know, my experience in the business has been, I don't know an advisor that doesn't have at least one client that's a business owner. And typically, there can be somewhat of illiquidity in that relationship. You know, most small business owners in that range you talked about, whether it's 5 to 50 million in EBITDA, you know, typically pour a lot of their assets and revenue back into the business. And so when they're building that plan, it becomes paramount in my mind that they begin to have that conversation. It could be 10, 15, even 20 years prior to that liquid liquidating event.
What kind of advice would you give advisors as they begin the planning process or wherever they are in that planning arc? How do you go about, you know, teeing up the idea that I can help you when it comes time?
Roger Overby:
And Bill, bill that's a great point because you're right. We try and tell and talk to advisors about the fact that their business owner clients, most of their wealth has been created by the increasing value of that business. So 80% of the value, 80% their wealth is the value of that business, which is illiquid. And you're fixing to unlock that liquidity event. So it takes a good bit of planning in the future because you're going to have accounting issues. You're going to have estate planning issues. You're going to have tax issues. You're going to have timing issues. And so we talk to advisors, and we asked them the question, do you have an annual review with your client? Every advisor said, we absolutely do. We sit down, we go through a whole list of items we want to talk about. And we say, why don't you add the question, have you ever considered selling your business, Mr. Client? Or have you thought about when you would want to sell your business? Have you thought about if you would want to sell your business? And so if they add that into that annual review, then they're uncovering that as part of their holistic total financial planning approach. It's just an it's another avenue, another method that that advisor can provide advice and help their client at what will be the biggest, potentially most of the time, the biggest liquidity event of their careers.
Ryan Neal:
Great. So that in mind, given that, you know, a lot of advisors maybe haven't been doing this traditionally in their careers, can you share any type of tools or information for some of our listeners to help them get started and have those conversations with clients?
Roger Overby:
So what's interesting, Ryan, is that we actually have a library of materials at our firm that we use and for advisors. We have things like little monthly reminders about this was a transaction that occurred you know last month, and this is something that you might share with your client.
Oh, my goodness. there was an HVAC company that got sold last month, and it just it just started me thinking, Mr. Client, wow, you're in a similar type business. This is a conversation we should have.
But we have a whole education package together that's driven by a monthly outreach to each advisor. And you know, through the partnership with TradePMR, we'll be able to work on connecting and talking and reaching out to each one of the advisors on a pretty regular basis.
Ryan Neal:
Great. And I guess, real quick before we move to wrap up, are there any and there are types of deals that you guys try to avoid? Do you do you work with anyone under the sun? I know you said there there's a kind of area of focus, a specialization, but anything you guys like to stay away from?
Roger Overby:
So the only thing that we don't do is, we don't do M&A for RIAs, okay? You know, I know that there's a pretty active M&A market out there for the RIA industry, but that's not something we do. We focus on five main industry sectors. We're talking about business services, industrials, healthcare, financial services, and technology and telecom. And that's our area focus.
We're pretty much generalist within that area. But we've sold just about every kind of business you can imagine over the last 23 years. And we sold a business a year and a half ago in Silicon Valley. Our footprint is it's a national footprint. So we could sell businesses just about anywhere, Bill.
Bill Coppel:
Yeah, let me sneak in one more question if I can, Ryan. I think that one of the things I'm hearing, which I'm a little bit concerned about here, is that do you wait for the client to tell you that they want to sell? Or how does the advisor begin to, you know, we talked about getting into the conversation as their, in most cases, their largest asset.
And I think that when you talk about an annual review you do with a client, it may be worthwhile for them to start to look at doing annual review with them on their business and where they are in that life cycle, right? To get the conversation going. Because the question I really want to ask you is this: It's not a snap of the finger when someone decides to sell. What a kind of what are the kind of hurdles that you see the business owners have to jump through to get there, and that has an implication on where the advisor is going to sit in those kinds of conversations.
Roger Overby:
Yeah Bill, that's a good point too because it is a long process and there's a lot of emotion in this for the business owner of that family-owned business when they're considering, you know, a transaction to sell the business and the earlier you can have that conversation, the better. Because, you know, if they're if they're thinking about a couple of years out, that's kind of ideal. And because there are planning opportunities, OK? And the planning opportunities are dramatic. An example is at the point in time that you get a business that we get an LOI and a private equity buyer has said, we will pay $80 million dollars for that business, that LOI literally becomes the value of that business that day.
Therefore, if you haven't the last couple of years, if you wanted to gift some of that stock to your children, if you wanted to transfer it to other heirs, if you wanted to have any tax and planning issues, those issues need to be done prior to that moment in time. And so, Ideally a couple years out, okay? But you know, we have a lot of firms that we do business with that are in the, what do we call the pre-exit planning business too.
And so if we get potential clients that are, you know, four or five years out and they need a good bit of work done and consulting to get to the point to exit, we have firms that we would we can refer them to that do that specific kind of work.
Bill Coppel:
And that yeah that's a great point, Roger, because as you said, a lot of business owners think they need a valuation before they sell. But once that number is, you know, put in stone, if you will, you know, that sets the wheels in motion. And all that tax planning you're talking about should have been done. All the distribution, perhaps, of equity should have been done well before we get to that point. So that's a great lesson for people to take away.
Roger Overby:
Yeah, thank you. You're absolutely right.
Bill Coppel:
Okay, Ryan, why we wrap it up?
Ryan Neal:
Yeah, I'll wrap it up. So, Roger, what we do here on the podcast is we close out by giving our listeners, wherever they are, sort of one actionable takeaway, something that they could bring back to their practice and put in place to make a difference. So if you were giving them one piece of advice about everything we've talked about today, what would that be?
Roger Overby:
That one piece of advice would be to make sure the next time you're talking to your business client, you absolutely bring up that question. Have they thought about selling their business?
And then the action item after that would be to pick up the phone and call us and contact us because we could help them very, very quickly ascertain if that's if that's a transaction that might fit for us to help them with.
Bill Coppel:
Great.
Ryan Neal:
Fantastic. Well, that's great answer, and thank you so much for joining us.
Roger Overby:
Yeah, thank you. I appreciate it very much, Bill and Ryan.
Bill Coppel:
That was great insight, Roger, and thanks for sharing it.
Ryan Neal:
And thank you to anyone listening out there. Wherever you got this podcast, take a moment to like, subscribe, comment, share with your friends. All of that stuff helps the algorithm, helps get the podcast to more people. We really appreciate you, and follow us on social media so you can catch the next episode.
Bill Coppel:
And I want to add my thanks to you as well. And as Ryan said, please watch for our next episode where we'll bring you more insights and actionable ideas designed to help you grow your business. And remember, the challenge is yours to capitalize on what the future offers.
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This special episode of the Synergize podcast was sponsored by:
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