Completing 100 M&A deals takes a lot of effort, perseverance and patience.
So what does it take to complete 1,000 deals – a milestone just met by private equity firm Riverside Co. of Cleveland?
"Riverside has always aimed to foster long-term success through some of our key business principles," Co-CEO Stewart Kohl said in a news release. "We've learned that one of our guiding principles is to follow our 'Golden Rule' — to make money but also sleep well at night."
"We decided to apply this concept, thinking it would lead to working with more decent companies," he added. "Turns out, treating people the way you want to be treated makes them more willing partners who are equally interested in working with you, and keener to build a career with you."
Riverside's 1,000th deal in its 35-year history was for busybusy Inc., a time tracking software firm in St. George, Utah. Riverside's current portfolio also includes PFB Corp., a maker of expanded polystyrene products based in Calgary, and Xcentric Mold & Engineering Inc., an injection molder in Clinton Township, Mich.
Riverside officials said that the firm uses its global footprint and processes to identify "little leaders," and then strives to make them bigger and better companies. They added that the firm applies decades of operational knowhow, local institutional talent all around the world and "the hard-earned experience of 1,000 investments" to accomplish its goals.
"When we founded Riverside in 1988, private capital was still in its infancy," Co-CEO Bela Szighety said. "We hoped to scrape together some capital and find a handful of fast-growing companies in which to invest. We focused on small and mid-sized companies because that's all we could afford."
"Fortunately, we enjoyed some early success enabling us to reinvest and grow our business," he added. "The inherent alignment of interests in the private equity model motivated us to innovate and pull many levers to generate good results."
Kohl also said that "culture is key" when making acquisitions. "A great organization is impossible without great people," he added. "Great people are attracted to companies with distinct values where ethics are lived."
To date, Riverside has invested in 419 platform companies and 581 add-on acquisitions to support this growth model. Kohl and his wife Martha also are co-founder of VeloSano, a charity cycling event held every year in Cleveland. The 2022 event raised almost $7 million for cancer treatment and research.