Seller Insights: Michael Tremain of Sovereign's Capital
What does the sale of a business look like from the perspective of a private equity partner? In this less-traditional version of our Seller Insights series, we sat down with Michael Tremain, managing partner of the private equity group at Sovereign’s Capital. Tremains’ group focuses on investing in companies in a wide range of industries that have revenues between $10 million and $100 million, and owner earnings of $3 million to $20 million.
When it came time to consider a sale of one of their portfolio companies, RestorePro, Tremain advised the ownership group, which included management, to engage FourBridges. In this interview, Michael gave us a look into how a decision-heavy sales process works with private equity involvement.
How did Sovereign’s Capital come to invest in RestorePro?
We were introduced to Ryan Jackson and Luke Wind from RestorePro by some folks in Raleigh before they had any interest in private equity. Then, when they were looking to replace a minority partner, they started searching the internet for faith-aligned capital partners, we came up and were already part of their network. We set up a phone call, met, and realized we had a lot in common. We had the same view of the marketplace and thought we could help them grow.
What are some of the goals that Sovereign Capital and RestorePro achieved together?
We came in at a time when they not only wanted to replace a minority partner in their ownership structure but also wanted to build on their success. They were looking for a strategic thought partner to unlock their potential and help them grow the value of the business. I believe the team at Sovereign’s achieved our goals for them on both fronts.
How did you come to an agreement about selling RestorePro?
Ryan and Luke were definitely curious first, so it was a question that the majority owners raised when they saw an opportunity. We processed the decision together, and to be sure that it was the right time, we engaged FourBridges to check the market to see what our options would look like. Things looked good and we decided to move forward from there.
Did the Sovereign’s Capital team have any specific goals for the RestorePro sale?
Our primary hope was to get the best outcome for our partners at RestorePro, Ryan and Luke. We definitely wanted long-term opportunities for their employees, as well. We hoped to find a partner that would see their business as a platform and acknowledge and value the unique culture they’d built over the years.
Why did you choose to work with FourBridges?
We felt like working with a boutique investment bank like FourBridges would accelerate the process and help run a more efficient, curated process. We already had a good sense of who our potential buyers would be, but we wanted to work with someone we trusted to run things efficiently.
I’ve had a relationship with some of the guys at FourBridges for a few years, and we’ve sought their counsel on deals before. We had a high degree of confidence that they could run a tailored process just for RestorePro—and that they would do it thoughtfully.
Did you run into any challenges throughout the sale?
We didn’t run into anything out of the ordinary, but of course, we hit the normal bumps. A couple of interested parties were hot and cold or hard to nail down, but Ralph Montgomery and
Andrew Allred at FourBridges were able to manage that on our behalf. They did a great job of qualifying interested buyers and protecting our management team from unnecessary interactions. FourBridges kept them out of things that drain you emotionally and intellectually, so they were able to keep their focus on running the business day in and day out.
What advice would you give to a business owner who is considering a private equity deal or selling their business?
I would recommend a conversation with FourBridges, for sure. They’re big enough to accomplish any size process efficiently, and have credentials and experience from working at nationally known investment banks, yet they’re small enough to really care about the outcome for the seller. As far as partnering with a private equity firm, it’s a great way to build the value of your company. So if that’s something you are interested in, private equity partners could bring more capabilities and expertise to the table to help you unlock the potential of your business.
What’s on the horizon for Sovereign’s Capital?
We plan to continue making investments in lower-middle market companies. It’s especially important to us to connect with faith-aligned companies in the Southeast. That’s really our driving focus as we look to the future.
This month, we took a different approach to our Seller Insights series and chatted with Michael Tremain, managing partner of Sovereign’s Capital private equity group.
As Michael took us through the details of the RestorePro sale from his perspective, he explained why a business might benefit from taking on a private equity partner, and how a sale works when you have private equity involvement.
Michael trusted FourBridges to keep the owners “out of things that drain you emotionally and intellectually, so they were able to keep their focus on running the business day in and day out.” Read the full interview here.
Thinking of selling your business? Get in touch.