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Merger Mania: M&A firm helps companies find buyers, sellers*

February 13, 2005

WOODBRIDGE — “Procter & Gamble to buy Gillette.” “SBC to swallow AT&T.”

Mergers are back, and the big ones generate big headlines.

But thousands of smaller companies are bought and sold every year, with little fanfare.

That’s where companies such as Woodbridge Inc. come in. Woodbridge is a mergers and acquisitions (M&A) firm based in Woodbridge.

Founder and President Robert M. Koenig helps small to mid-sized businesses that are for sale or that want to buy other businesses.

“I’m an entrepreneur, and I love dealing with people who have built something,” said Koenig, 52. “I’m a company builder.”

Sell-side clients range in annual revenue from $3 million to $50 million, while buy-side clients range up to $100 million in revenue. About 80 percent of the company’s clients are sellers.

Koenig, who lives in Woodbridge, started the firm in 1993, after selling the family business started by his grandfather, Milford-based Koenig Artist Supplies.

After becoming president in 1982, Koenig led the art supply chain in growing from $5 million to $100 million in annual revenue by 1992.

While he achieved that growth mostly through franchising, he also bought 30 other companies over the decade.

“I enjoyed buying and selling businesses,” he said. “I come out of the business world, so I understand that mentality.”

Time to Grow

Until a year ago, Woodbridge had just five employees. Today the company employs 15, and Koenig plans to expand further.

“The timing is right,” he said, noting that business has picked up following the slowdown that started after the Sept. 11, 2001, terrorist attacks.

Lori S. Green, vice president of strategic planning, said the company is currently working with 15 clients in seven states, up from four to five clients in previous years.

“We expect to work with about 30 clients in 2005. In five years we plan to have clients in every state,” she said.

While there are hundreds of small M&A firms across the country, Green said Woodbridge takes a unique approach, with an aggressive marketing program that helps businesses find multiple buy or sell candidates.

“If you have only one buyer, you really have no buyers,” Green said. “Our focus is on creating a competitive situation.”

Woodbridge started its own video production company, Corporate Showcase Media, to create digital videos about companies that are for sale.

The company also employs an aggressive marketing campaign to get its clients’ names out in front of an average 1,000-plus prospective buyers.

“The goal is to get the client as many potential buyers as possible,” said Robert F. Murphy, managing director. “We think about who could benefit from buying the business.”

Murphy, who recently became a partner at Woodbridge after running his own investment firm in New Jersey for seven years, said he enjoys the variety of M&A work.

“It’s always a different business — manufacturing, services, retail,” he said. “Each client has a different set of issues and problems.”

Standing Alone

Kevin Fiala, president of the Connecticut chapter of the Association for Corporate Growth in Stamford, agreed that Woodbridge stands out.

“Woodbridge is the best at marketing,” he said. “They are doing things that a lot of the other groups aren’t doing.”

Fiala said most M&A firms rely on networking and referrals — from lenders, lawyers, accountants and consultants.

“Woodbridge Group’s business is better positioned to grow. They are not sitting back relying on relationships they have had in the past,” said Fiala, whose 110-member association includes investment banks, M&A firms, private equity groups and others involved in business development.

Fiala agreed that now is a good time to expand.

“We’ve gotten past a couple of tough years in the M&A market, and things are improving. Businesses are trying to grow, and acquisitions can be a good way to do that,” he said.

Kevin Tierney, one of Koenig’s recent clients, said Woodbridge helped him find multiple buyers and get the best price for ACG Dynamics in West Haven, which he and a partner sold in November to QualMark, a Denver-based public company.

“They put together a spectacular summary — they really got into our heads,” said Tierney, who is also president of three Guilford firms — Connecticut Business Credit Inc., Spectrum Mortgage Bankers Inc. and Workout Solutions Inc. “They opened our eyes that the world of potential purchasers could be far beyond the niche we were currently in.”

ACG Dynamics, with 22 employees, rebuilds equipment used by manufacturers to test metal products under stress.

Andy Clapp, president of Brook Venture Funds in Boston, praised Woodbridge Group for using the Internet and video to take M&A marketing to a new level.

“Extremely few if any M&A firms do anything like this,” he said.

Clapp, who was formerly the publisher of the newsletter “Mergers and Corporate Policy” and “The Merger Directory,” was hired to conduct due diligence on Woodbridge by a potential investor last year.

He said Woodbridge Group is among the largest of the 20 or 30 M&A companies in Connecticut, many of which are one-man operations.

“It’s very fragmented, with lots of small competitors,” he said. “To be successful, you have to form a firm that has some credibility, that has some size.”

Clapp agreed the time is right to expand. “We’ve gone through a drought that’s been pretty tough, and a great many people right now are very interested in selling their company,” he said.

As for Koenig, he said his goals are far more ambitious than to simply grow larger.

“I think there’s a major opportunity for a high-quality firm to take the lead,” he said. “I want to be the Goldman Sachs of this segment of the market.”