Firm helps others go out of business

Companies analysed and buyers lined up By MIKE PETTAPIECE The Hamilton Spectator Robbinex Inc. puts people out of business - and makes them happy in the process. Ask Bruce Heagle. Robbinex helped his family sell its Hamilton-based food-products company and yet keep it going.	JOHN RENNISON, THE HAMILTON SPECTATOR Doug Robbins, owner of Robbinex Inc., helps people sell their companies, even videotaping the operation.

That's important because 50 people kept their jobs. The Heagle family, owners of the National Bakery operation, had received earlier advice that liquidating the bakery might be the best and only solution.

"What Robbinex provided to us - and I'm sure to others - is that they gave us an alternative," said Heagle. "And until we made the contact with them, I wasn't sure we had an alternative. Robbinex is a specialist in selling businesses - just like a realty agent helps you sell your home.

Bruce Heagle turned to them after his family's accountants had urged liquidation of the food-company's assets. He wondered if that was the way to go.

Enter Doug Robbins. Within six months, his company had assessed the National Bakery business and its sale potential, identified four potential buyers and reviewed a financing deal for one of them. A management-led group ultimately did the deal - at five times the value of a liquidation.

"There are very few people who do this," says Robbins, president and sole owner. "We are the largest in Canada and one of the longest-practicing in Canada."

While big-name firms such as KPMG might have similar specialists, they are mainly involved in large M & A (merger and acquisition) corporate deals. Home for Robbinex's 18 employees is 80 Bancroft Street in Hamilton, ON. (The company also has eight affiliated partners in Canada and the northern United States.)

The north-end head office is a rock-solid structure built on Hamilton history. Years ago, it was a vinegar factory. The original stone foundations go back to 1869 and there have been at least two fired, with the subsequent rebuilding. Robbins bought in 1993, moved in two years later.

"I was born over on Ferguson Street," says Robbins with a smile, "and they say you always come back to your roots."

The company has retained much of the original structure. Robbinex deals with many family enterprises. So the attitude at work is family-like - employees take turns barbecuing dogs or burgers for lunch in summer.

Robbins knows about working with small businesses and family enterprises. For years, he was Ontario manager for the A & W restaurant chain, selling and reselling franchises when their owners wanted to retire.

And Robbins is off to Australia next month to address that nation's version of the 1,000-member International Business Brokers' Association.

Once, he dealt with a realty agent who had the listing on the A & W site. The guy "made more money in one listing than I did all year," he recalls. That seemed promising.

Robbins also worked at Bell Canada, learning how to market and sell. Bell also taught him about "usage prospecting" - finding people who will use and need a particular service.

In 1974, he jumped off the Bell line and started his own business. He would help owners sell their operations, sometime to their children.

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"Probably the biggest issue we deal with
- more important than the price, if you can believe it -
is the confidentiality issue." DOUG ROBBINS
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Robbinex will do perhaps 50 or 60 sales during an average year. The sales may range from about $1 million to as high as $50 million. Over his quarter-century in business, Robbins figures he's sold more than 600 companies.

Robbinex works only for sellers - would-be buyers change their minds too often - but often has people approach the company, looking to buy.

Right now, the database has about two dozen sellers but about 2,800 buyers. Some transactions take nine months, some go as long as three years.

And sometimes, Robbinex never does ring up a sale. Sometimes, the business intermediary acts as a fixer.

There was the hands-on-the-wheel trucker who wanted to sell. His business was doing about $300,000 in pre-tax profit. The two sides talked. It turned out he was too hands-on: he was at home in the cab, not in the office. And his Toronto-area business suffered because he loved the road.

Robbinex gave him a pile of recommendations for change, including buying a suit. About two years later, the trucker's business had rolled to a profit of $1 million. He didn't sell then but his business is now on the block.

In general, two-thirds of the private businesses are held by husband and wife or one spouse alone. The rest are owned by partners or a syndicated group looking for an exit strategy.

If the owner is getting older and wants to sell to the kids, Robbinex helps structure a next-generation deal so dad or mom gets more net after-tax money than if they sold on the open market. The kids get a better deal too.

To assist its client-sellers the company sits down with them to work out details of how to sell. Robbinex also videotapes the guts of a business operation - allowing the seller to control how much of the inner dealings are divulged.

"Probably the biggest issue we deal with - more important than the price, if you can believe it - is the confidentiality issue," said Robbins.

In essence, the selling process works in three basic stages: documentation and analysis of the company; finding prospective buyers and creating the marketing material to sell the art of the deal; and putting the package together and closing it.

Robbinex researches the seller's business, charts its performance within the field or industry, and comes up with a marketing strategy and potential selling price. The advice even deals with stresses, such as likely loss of sleep, in selling out.

Since the deals involve property, Robbins and four others on staff have real estate broker's licenses.

Robbinex has its own databases or potential sellers and buyers and has access to several others.

Robbinex makes its money in two ways. First, it collects a fee in the upfront consultative stage. And when the business is sold, Robbinex gets a commission based on sale price.

When your name is your passport, people are aware of your expertise. So Robbins and an associate hold workshops in the U.S. and Canada, that also nicely act as marketing tools. This year, the company will hold 32 workshops "in which we walk the person thinking of selling through the process."

And Robbins is off to Australia next month to address that nation's version of the 1,000-member International Business Brokers' Association.

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