Bradley Smith’s reputation as a deal maker in the US health and medicare sector stretches way beyond his home town of Fort Worth, Texas; across the US and into Latin America and Europe.
As managing director/partner of Vertess – an M&A specialist company focused on healthcare – Bradley has a first class pedigree in bespoke deals for each client. As well as finding the right M&A partners and structuring the funding side of the deals, Bradley puts an emphasis on old fashioned customer care. This means he does a lot of handholding, walking clients through the entire deal making process from day one.
This personal approach has helped Vertess gain such a reputation in the M&A healthcare market that much of the team’s work these days is based on referrals by clients. But then Bradley has been rolling up his sleeves and getting stuck in ever since he was a teenager. This entrepreneurial approach has ensured that Vertess remains relatively small and agile, while punching above its weight when it comes to deals.
“Yes, we do punch above our weight class,” Bradley admits. “Because of that we’re doing well; we have a lot of business and we’re even starting to grow a little bigger as a result – although growth is not really our strategy. We just want to provide the right kind of service for clients. ”
This service includes client handholding along with corporate deal making: “I think it’s hard to understate just how emotional and just how taxing the deal process is,” Bradley says. “Most clients have very little concept of how difficult it can be before they get into it. We try to forewarn them, but until they’ve been through it they have no idea how emotionally draining it’s going to be. And that’s where we step in.”
For Vertess, an average deal takes about nine months, although Bradley admits bigger deals have taken up to three years: “The larger ones take a lot of time and they’re extremely nuanced; much of what happens runs counter to market norms. You have to be aware of the intricacies of healthcare when doing these kind of deals.”
This personal approach has helped Vertess gain such a reputation in the M&A healthcare market that much of the team’s work these days is based on referrals by clients
“For example, we spend a lot of time with our clients initially getting to know them and helping them understand their equity value, what they have on the table. Believe it or not, but most people don’t know. They have no idea how much their company’s worth. It’s not like most of them are publicly traded entities. It doesn’t work that way.”
It’s understandable that owners have an emotional attachment to the businesses they’ve grown from scratch. Bradley believes it’s similar to parents seeing their children grow up and leave the nest.
“For many business owners it’s like giving away their babies,” he says. “They have deeply emotional feelings towards these entities they’ve built. All the hours they’ve spend growing this business and that’s only to be expected, of course.
I think it’s hard to understand just how emotional and just how taxing the deal process is
“Clients can run the whole rollercoaster of emotions, especially as you get towards the end of the deal and they say to themselves ‘hey, what have I done here?’ Am I going to be out of a job here; moving on with the next phase of life or be partnered with someone for the next 15, 20 years?’”
These are big questions and Bradley and his team have done a lot of work around helping business owners to understand fully what happens when they sell or merge their companies. “There’s a book worth reading called ‘Selling Your Baby’. It goes deep into the psychological aspects of selling the company that you’ve built up and spent a good portion of your life creating.”
Elsewhere, Bradley also works with serial entrepreneurs who are looking to be strategic: “They grow into other people’s capital; want to restructure their equity within a decent business to really see it grow. So you’ll see people who say they’ve grown their business to $20 million in revenue and it’s got 300 employees, but they’re unable to grow any bigger with the capabilities they’ve got. However, they want to grow 10 times bigger and still want to be involved in. That’s an area where we can come in and help people find solutions.
“These deal processes always have to be tailored to individual needs and aspirations. You do things right from the beginning and it makes things a lot smoother because in every transaction things go wrong. There will be negative consequences. There will be times where things just happen and it’s about how you overcome that.”
Bradley admits with his decades of M&A experience, he could write a book – a how to guide to deal making, but then laughs it off. “Sure, I’d like to write a book showing how things can go right and go wrong. But then just when we think we’ve compiled the entire list; thought through every conceivable issue that arises, something goes wrong that you haven’t foreseen. And so the list would never end. But it keeps you on your toes. You can’t put anything on autopilot. There’s no such thing as autopilot. I wish there were.”
But if anyone is qualified to write a book about buying, selling and investing in businesses – particularly in a niche such as healthcare – Bradley is. Unbelievably, he was still a teenager when he grew then sold his first business.
“Yes, I was 18 years old when I sold my lawn care business. It was actually doing pretty well, making close to $1,000 a week. I was going off to college and in the summer before I just thought,’ I’m giving up’. It was making a lot of money, especially for a dumb high school kid like me,” he laughs.
“I approached one my nearest competitors and said,’ hey, I’ll sell you this business’. Then I took them door-to-door to introduce to all my clients and he paid me for it, so I was able to walk away with some decent money. Later in college I had several businesses and worked for a lot of different companies.
One of my good friends started a durable medical equipment company and worked for him on the side.“
I was 18 years old when I sold my lawn care business. It was actually doing pretty well, making close to $1,000 a week
“When I finished college, I’d saved enough money to split a durable medical equipment provider location with him in Tyler, Texas, and within six months I’d bought him out. And then I started growing and opening up locations elsewhere. I was 26.”
At that point Bradley realised M&As were a more efficient way to grow a business. Armed with this knowledge, he started diversifying into other areas of healthcare such as mobility, respiratory, durable medical equipment and then later hospice, home health and IT products for telecare.
“We really diversified and even had a couple of pharmacies. It was all encapsulated in post acute home care. We bundled it all up into an integrated approach and it worked out well. I sold the business in 2008 and at that point I was looking for another challenge and got a clinical license as assistive technology practitioner. I did clinical work for a while and at the same time started helping people do M&As and turnarounds. I really started to like M&A work and decided I wanted to commit to it. A few years later I started Vertess with my partner, Tom Schramski.
I was wild at college,” he recalls. “At one point they even cut off my allowance, which is why I started working so hard. But they’re proud of me now…I think
The rest, as they say, is history.
Bradley admits it’s been a weird journey, but he wouldn’t have had it any other way. These days all the deals are done for other businesses rather than his own and he’s happy to keep it that way.
Apart from his 24-hour customer care, he does have a life outside Vertess.
“Believe it or not, I do try to live a normal life like everyone else,” he smiles. “I have a couple of kids, we go skiing twice a year. I Like mountain biking with them and really enjoy taking time out from the job. Having fun.
“I mean, you have to don’t you? Otherwise, you’d go insane.”
Insane or not, Bradley continues to receive and send e-mails at 2 o’clock in the morning, but also counts that as fun. “I’ll start my day off and I’ll have a call at 6 o’clock in the morning and it’ll be in Germany. And then I’ll have a call at 8 o’clock at night with people on the West Coast or in Hawaii. A lot of that happens, but that’s how I live life.”
And what do his parents think of him – the kid who sold his business at 18?
“I was wild at college,” he recalls. “At one point they even cut off my allowance, which is why I started working so hard. But they’re proud of me now…I think.”