Ep. 4 Strategic Acquisitions Unlocking Business Value with Paul Ormsby
In this episode of the Legacy Branding Podcast, Laura Beauparlant sits down with Paul Ormsby, Senior VP of Operations at STS Capital Partners and retired Canadian Air Force General, to explore the role of branding in business sales.
Paul shares his journey from military leadership to M&A, emphasizing how strong brand equity and a clear vision can attract strategic buyers and lead to successful exits. He offers practical advice on navigating the emotional journey of selling a business, preparing for post-sale transitions, and building a lasting legacy.
Plus, hear the cautionary tale of a missed $258 million deal and learn about STS Capital’s "Success to Significance" initiative that turns entrepreneurial success into meaningful impact.
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Paul Ormsby is the senior vice President of Operations at STS Capital Partners. A retired two-star Canadian Air Force General, Paul served extensively as an Executive Strategic Advisor within the Canadian government at the Minister/Secretary level and as part of an embassy team where he served as Principal Advisor to the Canadian ambassador in Washington, DC.
Engaged globally, Paul has well-established networks across many key domains, including government, acquisitions, aerospace, defense, finance, capital providers, and think tanks: medical services, intelligence service providers, and software.
A life-long aviator, Paul has extensive experience with operations and experimental flight test experience.
https://stscapital.com/ -
00:00 Introduction to Strategic Acquisitions
00:21 Welcome to the Legacy Branding Podcast
01:01 Meet Paul Ormsby: From Military to M&A
05:33 The Importance of Brand in Business Sales
10:04 Types of Buyers: Financial vs. Strategic
13:55 Challenges in Selling a Business
15:12 Setting the Vision for Your Business Exit
15:44 Navigating Unexpected Offers and Partnerships
16:10 A Cautionary Tale: The Cost of Greed
18:21 The Emotional Journey of Selling a Business
20:20 Building Your Exit Team
21:59 Advice for Founders Considering a Sale
24:31 Legacy and Philanthropy: Beyond Business Success
27:24 Connecting with STS Capital
28:08 Conclusion and Next Steps
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Paul Ormsby It's something that a strategic acquirer looks at and says. If I were to integrate that into my company now, I know I can make a lot more money with it than the present owners of the company. And I want that and I want it longterm. I don't want my competitors to get it. It's a strategic fit for me. So I'm willing to pay a little more if I need to, cause I've fallen in love with this thing. Brand is one of those strategic drivers. ---
Laura Beauparlant: Welcome to the Legacy Branding Podcast. I'm your host, Laura Beauparlant, here to guide you through the journey of selling your business and creating value. And building a personal brand that leaves a lasting impact on the show, we'll explore real life founder stories, expert insights, and actionable strategies to help you navigate the transition, avoid post sale crisis, and create your impact driven legacy brand. Whether you're thinking of selling, building to sell, or already on the other side, this podcast is your go to resource for making your next evolution, your best one yet. Let's dive in. Today on the Legacy Branding Podcast, I am very excited to welcome Paul Ormsby. He is the Senior Vice President of Operations at STS Capital Partners. He is a retired two star Canadian Air Forces General and a lifelong aviator. He's had a rich background in operations, experimental test flights, and strategic advisory roles. His extensive network spans government, aerospace, defense, finance, capital providers, and more, and he brings a wealth of experience to the table. He's also served as a principal advisor to the Canadian Ambassador in Washington D. C. Wow, Paul, that is quite the career you've had. Welcome to the show. ---
Paul Ormsby: Oh thanks, Laura. It's a real pleasure to be here. Thanks for having me. ---
Laura Beauparlant: Many conversations before and we both have a love of flying. So we, we definitely bonded over that. And I wanted to really dive into this transition you took from being a two star Canadian Air Forces general no big deal. And now you're the senior VP of operations at STS Capital Partners. And how did that background in the military, you know, what did it teach you? And how do you bring that into the M& A world and STS Capital? I think it's such an interesting transition and I'm sure there's many military things that you've brought to the table. ---
Paul Ormsby: Well, thanks for the question. First of all, it's probably the most asked question I get when people meet me and they learn a little bit about my background and they find out what I'm doing now, you're working for an M& A firm. How does that happen? So I was lucky in my career because in the military, in uniform, because certainly in Canada, and I know many allied nations like the United States and England would be the same United Kingdom we get to experience a lot of different jobs over the courses of our careers. For instance, I did start operationally as a very young lieutenant flying and doing anti submarine patrol work. And that's what I did for the first eight or nine years of my career. But I eventually got into flight testing and that got into program management and that got into acquisition and I finished in Ottawa. My last posting in Canada, I was the Deputy Chief of Staff of our Acquisition Group, which is the group that acquires everything for the Canadian military, everything from socks and beans to F 35 jets. So a lot of the principles that we see in commercial industry or the financial industry in terms of managing projects, leading strategic change, leading the implementation of strategic initiatives, we're doing the same thing in the military. In fact, on the corporate side of the military, we often borrow from. The commercial world or the private world of business the best practices and techniques. So we're very familiar in the military with many of these processes that are being used by industry today, and we use them ourselves for our corporate planning, our business planning, our strategic planning inside the military. So, to answer your question about how I ended up with STS when I was considering retiring, a very good friend of mine who was also retiring from the military, had just been hired by STS. And he was also a very senior officer in the military too, and he was brought in to help oversee the expansion of STS, because coming out of COVID, our founder, Rob Follows, correctly. identified the fact that M& A would be very hot coming out of COVID. So he wanted to grow the company. So Sean Friday, my friend was brought in and eventually Sean has now become the CEO of the company. But prior to that, Sean contacted me and said, Hey, I know, Paul, I know you're thinking about retiring as well. And I could really use your help on the corporate side, managing. The growth and the programs that we want to bring in and the strategic changes that we want to bring in, would you be interested in doing it? And we'll teach you about the business as well of M& A and how we do what STS specifically does, which is quite niche in of itself. So that sounded very interesting to me. And I took the challenge and I took the offer. And here I am two and a half years later and very happy to be at STS. It's a wonderful company. The experience has been great. My military experience has translated, 100 percent into the role here. Of course, I've learned new things about M& A while in this job, but very close similarities between what I had done in the military and what is happening here at STS. ---
Laura Beauparlant: I think it's. It's always fascinating to hear where people started and then where they end up. And I love that you're also kind of redefining retirement for yourself that you're, you're in your third act basically. ---
Paul Ormsby: I've retired from the military, but I haven't retired from life, so there's still more ---
Laura Beauparlant: Exactly, I feel like we've had that conversation before. I love it so this podcast is about. Branding and I call it legacy branding. That's the work that we do here at lab creative. So, and I know we've talked about this before, but I'd love for you to share how important a business's brand is in the sales process. And do you have any, stories you could share and what role does that play in determining the value of a business? ---
Paul Ormsby: So, first let me just say that brand is extremely important from our perspective when we're looking at a company. And we like to think of it in the context of the drivers of strategic value. That's a term that we often use and you'll see it in our literature and you'll see it if you were a client of ours, you would hear us use that term. And We also tie that with another phrase we often use, which is called Rembrandt's in the attic. And if I could just maybe tell that anecdote very quickly, I'll get to the question about where in, we often speak with potential clients and we asked them what's the Rembrandt in the attic of your company? What's the, what's that special thing that you've got that if you had a house and you were selling everything in the house and it came with everything in it and there's artwork up in the attic and there's a Rembrandt in there. If someone were to recognize the value of that, they're probably going to pay you more for it. Compared to the other ones on the street because they see the extra value that that one item or a series of items like that bring to your business. the anecdotes a bit longer than that. I won't go into it all here, but essentially it's a driver of strategic value. It's something that a strategic acquirer looks at and says. If I were to integrate that into my company now, I know I can make a lot more money with it than the present owners of the company. And I want that and I want it longterm. I don't want my competitors to get it. It's a strategic fit for me. So I'm willing to pay a little more if I need to, cause I've fallen in love with this thing. Brand is one of those strategic drivers. It has all the characteristics that strategic buyers are looking for. A brand is something when it's done well, it commands greater trust and loyalty from the customers. It can lead to more consistent revenue streams. Strategic buyers are very interested in that. It can provide that competitive advantage. It makes it easier to attract and retain the customers that can result in higher profit margins. And again, a strategic acquirer is looking for that. There's the growth potential. There's the reduced risk in the eyes of the consumer where if it's a well recognized brand, like Volvo in terms of car safety, people associate that with Volvo. That is a branded item. It's safety characteristics. So people have an extra bit of trust which may affect their buying decision. And then of course there's the brand equity that in intangible asset that a brand has, which often can command a higher price. So, interestingly, we were, we are working with a client right now that's actually relatively small in terms of the defense industry but it is a defense company and. we were working through our strategies on how we were going to get this company in front of a larger tier one players like Lockheed Martin, Boeing, et cetera. And we actually came to the decision that our best strategy was the brand. This was a trusted company, a very highly successful and talented engineers from a pool of engineers, which is very, very small. In this specific field, so it didn't have a lot of sales yet, but it had amazing intellectual properties and inventions that it had created that the defense industry and certain governments were looking for they just hadn't won the big contracts yet to deliver a thousand of these things. That's coming. We know that's coming, but the owners decided it was time to sell. So we've, we've sold that business or we're in the process of selling it based on brand. And people know the owner. People know the name of the company. They know the quality, they know the fact that company is consistently winning the R. N. D. Contracts from the government to develop these new things. And they recognize it right away. And the strategic buyer is going to look at that and say, You know what? That's a perfect fit for me. ---
Laura Beauparlant: It's like that idea of turnkey. You buy a house and does it need a gut reno or is it like you turn the key, you walk in and you put in your furniture and you're done. And that's kind of what a brand, having a great brand does for somebody who's buying is they're like, I can just buy this business and, and we can just get started. ---
Paul Ormsby: Correct. Correct. Because the number one thing in the mind of a strategic buyer is, is it a strategic fit? Does it fit a hole that I've got that I need to fill and I don't want to maybe recreate it from scratch. I'll just buy one and bring it in or I'm doing this now. And this is a perfect sister company to bring him beside it. And when they see that they have to have it. And and again, brand is one of many keys that strategic buyers look at, but in this particular case, it was the key. ---
Laura Beauparlant: Okay. So what are the different types of buyers? ---
Paul Ormsby: So generally you'll, we divide them into two. There's a series of financial buyers, which typically it is private equity, venture capital, specialized funds that are set up to sponsor investments and so on. And then there are the strategics. It's never black and white. There are some private equity companies that are very strategically minded. And many of them actually fund strategic players in the industry. But generally speaking, financials and strategics. So, what's a strategic? A strategic is normally the, the tier one players that you'd be thinking of in any industry. So, Johnson Johnson, 3M Lockheed Martin, as I mentioned Unisys, Cisco, Apple. And there are a number of other companies that are in those tiers that most people never heard of, but they are very, very big players globally. So, large operators, they tend to have global operations. They're very well funded, very well resourced in terms of people and money on the balance sheets. Their view of acquiring a company is something that they're going to have for long term. They're going to own that company for 25, 30 years. They're going to integrate it. They're going to bring to bear on it their own resources, which are enormous to help with the marketing, to help with the branding, to help with the product development and maybe manufacturing at a much lower cost than the original owners are doing it. And they're willing to pay high multiples for that because they know they're going to make even more multiple on it when they get the product or the product lines into production with them. The classic example of that is, is our founder, Rob follows. He sold his company for 27 times, its earnings to a strategic buyer. He found out later that that company would have paid him a hundred times its earnings, and which is extraordinary. And he went to the owner of the company, he said who, whom he knew personally, and he said why would you ever pay 100 times earnings for a company? And he said, Rob, the answer is really easy because I know I can make 300 times. So that's how a strategic buyer thinks. A financial buyer, typically their playbook is very different. They're very good at what they do. And there, there are some very good companies out there in this area. But typically their playbook is we're going to buy low your company today and then we're going to sell it high later. Maybe in three or four or five years. So that's a very typical private equity venture capital kind of strategy. And often they will have the owners stay on for that period and they'll say, well we're going to give you one bite of the apple first when we buy the company from you, but we're only going to give you say 80 percent of the total price. You work for us for 3 years, four years, perhaps whatever that timeframe may be, and then we're going to sell it higher and you'll get a second bite of the apple. And then we're done. We move on. That's typically a financial buyer playbook. They're not long term. They're not thinking about integrating it into a longer or larger entity or enterprise. It's take it, turn it and sell it. Problem with that is when it goes wrong, it can go wrong very badly. That extra second bite may never happen if the company doesn't perform well. And we often find that owners who sell to Financial buyer in this regard, they often have, I shouldn't say often, I don't want to overstate it, but on occasion there are bad experiences because they no longer control the company, but they're in the company and they're watching the company degrade over time. And the company doesn't normally perform as well as it was performing. And then there's this often unfortunate outcome where that second bite of the apple doesn't materialize the way it was promised. So a strategic buyer tends to pay cash upfront for the entire company on day one, and then the owners move on. So that's what we specialize in is finding strategic buyers for our clients. ---
Laura Beauparlant: That's really also about culture fit and relationships. And there's a transaction for sure, it's not just about the transaction. ---
Paul Ormsby: In fact, we tell them it's not a transaction, it's a journey. And you have to be able to tell us what you're looking for in that journey so we can get it for you. S. T. S. Actually stands for selling to strategics. So that's that's our niche. --- Laura Beauparlant: What do you find is the most challenging aspect of selling a business that founders might be might overlook as they're thinking about it? ---
Paul Ormsby: I think the number one thing that owners are not thinking of is actually establishing a vision of the exit that they want. A vision of the outcomes that they're looking for professionally and personally. It's probably the most important thing a business owner can do after the owner has decided that he or she wants to exit the business. If we work with a client, we spend a lot of time up front trying to understand what that vision is. often. People will say, well, I want to, I want a deal that looks like this. And that I want the timeframe to be that XYZ or otherwise. And those are really kind of deal dynamics. They're not actually outcome. We, we need them to tell us what their vision is in terms of outcomes, because if they can articulate that, then we can get. Alignment with them, and they can get alignment with all the stakeholders that are important to making the deal a success. So we often use techniques to collect this information from them. For instance, open ended questions. We'll always, we'll often ask them if you could wave a magic wand, what would be the ideal outcome for you? What are the essential things you must have from the exit? And what are the desirable things that are the nice to have things from the exit? What are the goalposts you see for the time? What are the goalposts you see for the minimum price and the ideal price if you could get it? What are you thinking about your life looking like in two years after the exit, five years after the exit, and ten years after the exit? What about all the stakeholders who are involved in the process? What about your management team? What about all your employees? What do you think are their interests and how do you want to protect those interests. So this is very, very important for us to understand and work with the owner to articulate that because that's going to be our roadmap when we go through the process of selling. And we'll often return to that when we're working with a client, when offers start to come in, or if maybe something we didn't expect come in. For instance, we may be thinking this company Wants to be sold by the owner. But another company may come in and say, I don't want to buy it, but I want to partner with it. Well, what would that look like? Does it meet these needs? Does it meet these requirements of the vision? So that vision exercise that we do is critical and will often come to it over and over again. A number of years ago, our founder was working directly with the client and he had gone through this exercise with the company and it was two owners and both owners happen to be men. They own 50, 50 in the company. So each one had equal voting rights for major decisions about buying and selling whatever they wanted to do. So when they came to STS initially, they said we would be extremely happy. Okay. And if you could get us 50 million for our company, we'll walk away, we're done. So Rob said, okay, great. So STS took from the market and after a number of offers we were able to get them an offer of 258 million. ---
Laura Beauparlant: Okay. ---
Paul Ormsby: 208 million over what they were looking for. So they accepted the offer in principle, the company that was acquiring them, sent a private jet to go pick up the two partners and fly them to their headquarters where they could