Broker Spotlight – Phil Reese

How did you get into the business brokerage industry? 

My partner & I sold our business, First Impression Security Doors (now known as First Impression Ironworks), in April of 2001. My partner and I started the business out of our garage in 1995 and built it into a company that, at the time we sold it, operated out of our own manufacturing facility and had thirteen employees (Today, that business is the largest ornamental iron company in the state of Arizona).

We sold the company through VR Business Brokers in Tempe.  My transition into the Business Broker industry came about when the President of the Tempe office asked me to join his firm.  I accepted his offer and quickly became the top agent in the Tempe office and one of the top sales agents in the VR network nationwide.

What is your favorite thing about the industry?

I really like the freedom, variety, money and helping people achieve the American dream of owning a business.

What is the best or most interesting deal you have worked on?

The best deal and the worst deal I have ever worked on were one in the same.  It was a Precision Metal Fabricator located in Phoenix. The only reason I can say it was the best deal is because I sold it for $31,500,000 and received my largest commission ever. It was the worst deal for many reasons, but in the interest of time, I will only mention the main challenges to the deal:

1.      The company was an ESOP (employee stock ownership plan).

2.      We had to get the board of directors and a majority of the employees to approve the sale.

3.       We had to get top three customers approval before the deal could close.

4.      70% of the company’s revenue came from one company.

5.      The company’s revenue and profits tanked during the listing period so I had to take the business off the market for about 8 months until they recovered.

6.      When we finally found a buyer, it turned out to be a private equity group (PEG) from New York City that kept pushing the sellers for more due diligence items and concessions.

7.      The sellers got deal fatigue and canceled the deal. At the time, the sellers had agreed to accept $30MM for the company. After the deal died, the PEG called me and begged me to get the sellers back to the table. I told them it was too late. They said they had already spent over $1MM on professional fees and had to get the deal done. They asked me to call the sellers and ask them what it would take to get the deal done. I called the sellers and they said they wanted an extra $1.5MM for all the trouble the PEG put them through. Miraculously, the PEG agreed and we got the deal done.

8.      From listing the business to closing on the sale took three years!

What is the key to being a successful broker?

Persistence, patience, and good communication skills. Also, becoming a lifelong learner. This business changes rapidly so if you don’t keep up with the latest trends, you will be left behind.

What is the strangest experience you have had while showing a listing?

I can’t think of one.

What do you do on your day(s) off?

What days off? Lol. I usually work Monday through Saturday and take off on Sunday. I like to read and spend time with my family.