Get to Know Kevin Tremblay

In the accounting and business consulting profession, it’s all about adding value for clients. Kevin Tremblay did just that when he pursued his CBV certification, acting not only an advisor but also a thought leader who clients rely on during their most important transactions. In this Q&A, find out how Kevin leverages his specialized knowledge to add value to each client relationship.

Why did you end up pursuing a CBV designation?

Early in my career within M&A Advisory and already having obtained a CPA, CA designation which helped me to establish a strong foundation in finance and accounting, I was responsible for advising clients on understanding the value proposition. When we would meet with business owners, one of the first questions was always about understanding the value of their business from an open market perspective.

In effort to bring another level of depth and credibility in providing that view on value, I recognized that specializing would serve my clients best and decided to pursue a formal designation as a Chartered Business Valuator. The complementary skillset I’ve developed through having both a CPA, CA and CBV designation has served me well throughout my career.

What drew you to Corporate Finance?

It was the people factor that attracted me to Corporate Finance. Any M&A transaction involves an emotional aspect for many business owners, as it’s often one of the most important decisions they will make, and it impacts not only their business but their personal life. What will they do once the business is sold? Can they realize their overall goals and objectives through an exit? What other intangibles (continuity for their people, ongoing community involvement, etc.) are important to them when considering the closing of any contemplated transaction?

You truly become a trusted advisor when you work with a client on such an important undertaking. This coupled with the art of the deal and negotiations, recognizing that every transaction is unique, is what attracted me to Corporate Finance.

In your experience, what does it take to run a successful business?

Success can mean different things to different people. Entrepreneurs are unique individuals, but it’s their passion and energy that truly sets them apart and leads them to success. However, in order to be successful, you also need to surround yourself with the right team which not only includes management, but often subject matter experts that come from outside your organization. So there’s a critical role for trusted business advisors who can help business owners make informed decisions.

Has the pandemic had any beneficial impacts on M&A activity in Canada?

From an M&A perspective, which is the ultimate liquidity event for many private company business owners, we have seen an increase in activity of owners wanting to take their business to market through a formal divestiture / sales process. And the M&A market was already strong pre-pandemic.

Pinpointing what exactly is driving such demand is difficult, but my sense is that many owners who lived through the financial crisis back in 2008 do not want to ride out the pandemic before seeing where the dust settles. Their decision is also likely influenced by resistance to change as they recognize the challenges that will come with a changing work environment which has been evident throughout the pandemic. Furthermore, markets have remained strong with significant capital available, a prevailing low interest rate environment has helped to keep valuations strong, and we’ve seen an unwavering demand from prospective purchasers, be they strategic or financial (private equity) in nature, for attractive assets. The level of activity is somewhat counter intuitive to a typical M&A cycle where uncertainty creates risk and risk causes purchasers to ride out the cycle and keep their ‘powder dry’ until they feel a normal environment has returned.

What critical advice do you give to clients who are considering a third-party sale?

If the main objective is to maximize shareholder value, you need to run an efficient process in an effort to create alternatives. Then, when comparing the alternatives, it’s important to not only assess the overall value proposition in the form of purchase price, but to understand how and when the purchase price gets paid, i.e. the contemplated deal structure and the related risks involved. Any dollar not received at closing is a dollar at risk and most transactions attracting a premium don’t involve 100 percent cash on the barrelhead. But often, it’s the intangible aspects of the deal, like creating opportunity for their people, cultural fit, and maintaining their legacy which can become the deciding factor.

Contact

To learn more about how our firm can help you close deals on favourable terms, contact Kevin Tremblay, CPA, CA, CBV, CF at [email protected] or 647.943.4051.