Aethlon Capital - Give & Take -
[Cached Version]
Published on: 2/4/2008
Last Visited: 10/5/2009
• Jeff Roos is president of MFRA, McCombs Frank Roos Associates Inc., a professional services firm in Plymouth offering landscape engineering, planning and survey services.
Roos and another partner owned 75 percent of the firm, but the other partner was planning an exit strategy.
Roos and company hired an adviser, who presented them with multiple buyers.
They struck a deal with Tonka Bay Equity Partners and now Roos owns about 10 percent of the firm, making younger partners much happier about the firm's future, and making Roos happier because his holdings are much more diversified.
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Upsize: Jeff Roos, tell about your financing arrangement.
Jeff Roos, MFRA: As a professional services firm we were internally owned.
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Roos: We had a line of credit before, with lots of personal guarantees by the majority owners.
In that situation, it lessens how much you can do personally, because everything you have is tied up in the company.
Upsize: What kind of an adviser did you hire?
Roos: We hired an investment banker that was part of an accounting firm.
It's given excitement to the younger partners now.
Before they could see, how are we ever going to buy out those senior partners?
That's taken care of now.
Upsize: What percentage do you own now?
Roos: 10 percent.
I feel more comfortable with it because I'm more diversified in my investments.
Upsize: Are you close to making an acquisition?
Roos: We're in conversations with two potential companies.
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Jeff Roos, MFRA: The need for capital dictates where you go.
If we had just wanted to grow, for example, we would have gone to the bank.
Upsize: But you had a partner who wanted to exit.
Roos: Our initial discussion was, everyone said let's just look at a business partner.
We were surprised when we talked to our adviser, that there were 15 groups interested.
Upsize: You didn't think you'd be so popular!
Roos: It was a pleasant surprise.
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Jeff Roos, MFRA: Especially in the professions, lawyers, doctors, engineers, they tend to think they know everything.
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Jeff Roos, MFRA: When you have a professional firm with multiple owners, it's Pandora's box.
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Jeff Roos, MFRA: The monitoring capabilities we have are so great now.
Put together as accurate a plan as you can, then monitor it so close.
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Jeff Roos, MFRA: Properly structured debt is just fine.
Upsize: You never had debt before?
Roos: We stayed in the black.
Culturally it was a big change for us.
At first we were so focused on, how fast can we pay this off, like it was a car loan.
Upsize: And now you believe that debt is your friend?
Roos: Properly structured debt is just fine.