Smart Business Magazine, June 2019
28 Smart Business Cleveland June 2019 DEALMAKERS DEALMAKER STRATEGIES Mark Mansour was young hungry and eager to establish his dealmaking credentials Mal Mixon was an established entrepreneur who had already built a billion dollar business at Invacare but was always looking for that next great business deal Together they went after Steelastic a Cuyahoga Falls company up for auction in the 1990s after its parent company went into bankruptcy To this day I dont know why Mal put his faith in me Mansour says He had a large risk appetite and he liked nichey small businesses like Steelastic The duo was ultimately outbid by a large Chicago based fund but a relationship was forged It opened up a dialogue with Mal and his associates about wanting to establish a private equity presence where they could funnel their deal flow Mansour says They were getting inundated with deal opportunities and wanted a more diligent approach to evaluating transactions as well as looking for transactions that didnt happen to fall in their lap So they hired me I was 32 at the time and I had a lot of energy and enough smarts to get by but was wildly inexperienced But that was a seedling to MCM Capital We spoke with MCMs senior managing partner about his approach to dealmaking and the value in looking forward not back when appraising deal opportunities Stick to what you know to come out ahead MCM Capitals Mark Mansour How do you identity potential acquisition opportunities The businesses we acquire have certain things in common They tend to be niche high value add manufacturers and in some cases distributors to business clients They generally command very attractive growth margins and a high return on assets The attractiveness from a 50000 foot level is if you add a little bit of growth to these businesses the incremental sales dollars can drop a disproportionate amount of profit to the bottom line From a deal standpoint you are somewhat putting on blinders Warren Buffett has said he usually misses out on the hottest technology stocks because he just doesnt understand the opportunity and weve taken that approach We focus on the things we understand As a result we may miss opportunities presented to BY MARK SCOTT mscott@ sbnonline com When we get outside of our comfort zone it creates more risk because were less capable of analyzing and assessing the opportunity MARK MANSOUR SENIOR MANAGING PARTNER MCM CAPITAL
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