Ray Horn is a partner at MPS Law with nearly 30 years of experience in corporate law, and a considerable focus in the area of mergers and acquisitions. Recently, we sat down with Ray to discuss his M&A practice and how his approach is an ideal fit for closely held small- to mid-sized businesses.
Tell us a little bit about what you do.
As a partner here at Meltzer, Purtill, and Stelle, my practice is focused on three main areas: mergers & acquisitions with closely held companies, buy-sell agreements among owners of closely held companies, and what I refer to as business divorce transactions. The majority of my practice is in the mergers & acquisitions space, divided pretty evenly between buy and sell deals.
What drew you to transactional law?
I enjoy the optimistic nature of transactional work. It’s a win-win situation where the law is creating something that wasn’t there before. A lot of legal work tends to feel like there’s nothing tangible produced, and the clients don’t feel they’ve gained anything. With transactional work, there’s an element of finishing something for a client so they can accept a new life challenge or reap their benefits and move on to the next phase of their life.
I really do enjoy that sense of accomplishment from getting a deal done. I also value the collaborative component of working with other like-minded professionals — whether it’s the other party’s legal counsel or the client’s other professional advisors.
What kind of deals and clients do you typically work with in the M&A space?
The industries I tend to focus on are manufacturing, distribution, professional services, and business-to-business services. In many cases, these are closely held, family-owned businesses, some of which have been owned by multiple generations. While that’s my focus, MPS Law as a whole participates in a fairly wide variety of transactions and industries.
Why do you gravitate toward working with closely held businesses?
When I first started practicing law, I had the opportunity to work on several larger middle market transactions, and it was exciting and enjoyable work. But there was a missing element — I just didn’t know what it was at the time.
When I came to MPS and started working on transactions with small- to mid-sized business entities and their advisors, there was an energy there, and I really identified with the people I was representing. It was very personal and fulfilling. With closely held businesses, there’s a lot of passion involved because the key stakeholders have invested substantial personal resources into the business. It’s a high-energy atmosphere.
Why would closely held businesses benefit from working with a firm like MPS?
Because not every client seeking M&A services needs an larger or international law firm with thousands of attorneys (or even hundreds of attorneys). We believe that we provide the commensurate level of resources for the type of clients who use our services.
I think there’s a bit of a misconception about the kind of experience a client receives when working with a larger, global firm. Yes, there’s name recognition. But at the end of the day, I feel that we understand our clients on a more intimate level. We’re working on exactly what we want to be working on, with clients we want to be working with. I think when you take a look at those factors, it’s ultimately just a better client-attorney fit.
Conversely, I don’t feel that M&A clients always receive the best representation when working with a generalist, either. M&A deals are nuanced and require a great deal of nurturing to get them to the finish line, something that most generalists are not typically accustomed to doing.
Are there any challenges involved with working with closely held businesses?
Absolutely. There are segments of this firm that work with large, multinational companies. However, my practice is different. Almost every seller I’ve represented has never sold a business before, and, similarly, many buyers have never purchased a business. These individuals often tend to be driven more by emotion than larger businesses operated by private equity firms or which are publicly-traded. With larger deals, there’s less emotion because the key stakeholders are less personally connected to the business. Arguably, they’re not invested in it in the same way as someone who started a business with his/her family. So, navigating through those emotions and the learning curve are definitely challenges that come with taking on this kind of work, but ultimately very rewarding given the personal connections.
What’s your approach to getting deals done?
It all comes down to maintaining a tenacious, can-do, cooperative, collaborative approach. Within the M&A space, you, as the attorney, have to work tirelessly to keep the process moving. You also have to work well with everyone, including the attorney on the other side. And you have to do this while reassuring your client that he/she can make it through this.
My goal is to ultimately empower my clients and help them make better decisions. At the end of the day, the client is the one making the decision and I am there to assist in helping them make the best decisions possible with the information available. I think clients appreciate being empowered. I’ve found that deals get done when there is an active collaborative process with both the client and the client’s advisors fully engaged.
At the end of the day, what motivates you? What’s the ‘feel-good’ moment you get upon the successful completion of a deal?
I live off the energy the clients provide. I truly enjoy helping clients reach a successful conclusion and knowing I was part of that process.
I realize that my clients have worked very hard on their respective businesses for decades and they’ve put a lot of hard work into those businesses and taken on significant risk. In being able to take that hard work and assist in converting it into something tangible, there’s a huge sense of accomplishment for me.