Thank you so much for doing this with us! Our readers would love to “get to know you” better. Can you share with us what you do and the story about how you first got started?
Of course. It was about 20 years ago and I was a Ph.D. student in economics at Claremont Graduate University, in Claremont California. The program was very theoretical and heavily based on mathematics and quite frankly a bit tedious. One evening, just for the free food and drinks I attended an event at the nearby Drucker School of Management where an investment banker from Goldman Sachs gave a speech about investment baking and M&A in particular. I was immediately hooked! M&A seemed to require the perfect combination of quantitative and qualitative skills. While I was in Claremont, I decided to also pursue an MBA in finance, which is seen as a standard requirement in M&A.
Once I completed my MBA, I stumbled on an ad for an M&A analyst position with McGladrey Capital markets (today DA Davidson) and I decided to apply and put my Ph.D. on hold for the time being. My experience at McGladrey turned out to be amazing. Every day I was learning something new about a variety of industries. The pace was fast and the job challenging, but being surrounded by smart and ambitious individuals was incredibly motivating to me.
Where do you see the M&A trends going in the next three years?
During the last several years, a combination of high stock prices and cheap money has encouraged a flurry of M&A and consolidations in various industries, including mining, technology, and utilities among others. As I observe that this current M&A wave has lasted now for approximately 10 years (twice as long the average business cycle in the US), it seems reasonable to me that this trend is ripe for an end. A recession would obviously conclude the current M&A cycle; however, as economic activity remains strong and interest rates are at historic low, it is possible that the current wave will still continue for several months.
Personally, I see a slowdown in conjunction with the presidential election of 2020 because uncertainties about the political outcome will put a lot of activity on hold. The looming possibility of an increase in corporate taxes or a different interpretation of antitrust regulation certainly could play an important role in business combination dynamics. So, to answer your questions, I still see strong M&A activity for at least another six months to a year, but a slower activity in 2021.
Have you personally see M&A as a strength or weakness in your career?
I certainly see it as a strength. Looking at companies through the lenses of M&A forces you to think about the business in its entirety and not just from a financial standpoint. This is in line with the Warren Buffet investment paradigm that requires investors to think of buying a business rather than stocks. Even more importantly, M&A trains you to not only be good with numbers but to master your interpersonal abilities and become good with people. In other words, in M&A soft skills and quantitative skills have to harmoniously blend in order to be the best that you can be.
What is your favorite transaction story to date?
I have many stories, but they all have something in common: when everything seems lost, if you are relentless and persistent, things eventually happen. I remember a small business in Canada that we attempted to sell for years. The company was a retailer of supplies to local upstream Oil & Gas companies. We went to the market at least four times over three years. Every time we tried to do something different; adding a new team member, a slightly different investment thesis, a new list of potential buyers, etc. In the end, we were able to finally find a suitable acquirer willing g to pay the right price. The lesson learned is clear: never give up!
Now over to our rapid-fire questions:
Early or late riser? Early. “The early morning has gold in its mouth," above all if you live on the West coast and New Yorkers are already up!
Marketing before sales or sales before marketing?Sales before marketing. These days, there are infinite investment opportunities. You must have proven yourself already at least to a certain extent in order to get traction in the marketplace.
Texting or email?Both. Texting more and more. Voice messages are two centuries ago.
What is the last article you read?“How Jim Simons Built the World’s Most Lucrative Black Box,” By Brandon Kochkodin. Fascinating story about Jim Simons and its mythical fund, “Medallion.” As a result, I bought the book “The Man Who Solved the Market” by Greg Zuckerman’s that narrates the full story. I certainly recommend it.
Thank you again so much for taking the time, Dr. Manfré. We look forward to see you and Bardi grow in 2020 and beyond!
Dr. Manfrè
Dr. Manfrè’s experience includes serving as a financial advisor and strategic consultant to both domestic and international corporations as related to merger, acquisition, divestiture, joint venture, corporate restructuring, and financing transactions. Before co-founding Bardi Co., Dr. Manfrè led the corporate valuation practice at Marshall & Stevens in the Los Angeles office. He began his career in investment baking with McGladrey Capital Markets. Dr. Manfrè holds a bachelor in political science from the University of Florence, in Florence, Italy, an MBA in finance from the Drucker School of Management, and a Ph.D. in economics from Claremont Graduate University, in Claremont California. He holds the Series 24, 28, 7, and 63 FINRA Licenses. Dr. Manfrè is a visiting professor at Graziadio Business School, Pepperdine University in Los Angeles, where he teaches M&A and business valuation at the master level. Connect with him here on LinkedIn and find more information about Bardico here.
Kinfizz
Kinfizz was established is based in Los Angeles. Since 2014, we have helped over 50 different companies and individuals achieving their sales and growth goals through our proprietary method, called blue-penciling. We help established companies grow sales by uncovering what marketing methods work and eliminating the ones that don’t. After a large organizational change, like M&A, the company is in the best position to get everyone on the same page. And get excited!