Fueled by pent-up demand and business owners looking to exit, 2021 was a hotbed for mergers and acquisitions. Statista had clocked in 16,672 deals nationwide by midyear—up more than 3,000 deals from 2020. Industry experts dubbed the year a “Super Cycle.”
North Texas was no exception. Ryan Binkley, CEO of Richardson-based Generational Group, said his middle market investment bank saw a record number of transactions last year, citing 60 percent annual growth by October 2021.
Binkley recently sat down with D CEO to talk about his journey, industry trends, and more.
This conversation has been edited for clarity and brevity.
D CEO: Tell us about your career path. What led you to where you are today?
RYAN BINKLEY: “I got out of UT’s business school in finance and marketing, and I had a real passion for business. I went to work with Procter and Gamble and then Boston Scientific in the first six or seven years out of college.
“About 1995, I went on a mission trip with my church to Guatemala, and I started feeling a call to ministry. We would go to these villages that would kind of pop up overnight. Hundreds of families would come—they call them squatter villages—and just take over land. They would put up little boxes for houses and little pieces of wood, and they would create little houses no bigger than half the size of my office. There would be thousands of people there and kids running around with nothing. I think my eyes just opened up, and I felt God was saying, ‘Hey, will you minister to my people?’ So I felt that call.
“I had taken a job transfer to Atlanta—I was there for about eight years in the 1990s—and the job was great. It was in technology sales and marketing and services. In time I realized I just didn’t want to do that. My heart had left it, and I wanted to do ministry. My wife and I got married in 1999, and we joined the staff at our church in Atlanta.
“I thought I’d be doing that for the rest of my life, and then tragedy hit my family. In 2001, my brother was running a business with my dad, and he was killed by a drunk driver. I had a dream at night where God really spoke to me that business was part of my calling as well as ministry. So, I went back got my MBA from SMU, and then after I graduated, we started this company.
D CEO: How did you get it off the ground?
BINKLEY: “In 2005, [Smith Barney, a division of Citigroup] let go of a lot of people. I found out about it, and I called their president and said, ‘Hey, I’m hiring.’ So, I got some of their key people, and that helped us start our business.
“We call the company Generational, because we believe there’s a legacy that’s in every business that they’re going to pass on to their family in some way. It’s either going to be financially or it’s going to be in the business itself. So, if they want to grow the company, then we want to help them grow it so they can keep it going. Every business has a life cycle, and they have to figure out how to get through that life cycle.
“Right now we’ve got a really good management team and a good plan, I think, for growth. We’re probably going to be opening up a London office as part of the vision is the next year-and-a-half or so. In the next five years, we see Europe as being a big part of our expansion.”
D CEO: What trends have you seen develop during the M&A Super Cycle, and how did it impact your business?
BINKLEY: “A lot of [business owners] are selling their businesses at younger ages. Many of our clients have been business owners for five or 10 years, and they’re selling, and they have a dream to start another one. We’re also seeing the baby boomer generation selling at all-time-high levels. We are up 50-plus percent in M&A closings.”
D CEO: How long do you expect this flurry of activity to continue?
BINKLEY: “There’s several reasons why M&A is up, not just with us but other companies as well. I think it’s because of low interest rates. When money is available, and at a good price, that creates opportunities. Banks are going to be loaning money, and people can get aggressive a little bit in the financing structures. So that’s a big part it.
“There’s also a lot of private equity money out there. Companies are trying to position themselves to grow through acquisitions. So, you have this demand side that’s really high, and now you have a supply side that’s really, really high. There are two big factors at play: the demand is higher than normal and the supply is higher than normal. The Super Cycle is creating a situation that’s very, very unusual—that we’ve never seen before.
“I really think it’s going to continue for the next three, or four, or five years probably. There’s also now uncertainty, which there is always uncertainty at some level, but it’s just been a little bit high, I think because of concerns of our country a little bit, stability of the economy, and potential tax increases.
If you’re a business owner, and you think you may sell in the next two to three years, a lot of them are thinking ‘OK, let me move it up closer.’ We’re seeing a lot of people plan a little bit quicker, negotiate a little bit quicker. We’re seeing deals just get done. Some things still take a while, with negotiations and due diligence, but overall, [deal times are] getting shorter.”
D CEO: What do you think is pushing younger business owners to sell?
BINKLEY: “There’s a little bit more of an entrepreneurship mentality in millennials and in the next generation coming up, where they’re seeing the importance of opportunities and taking advantage of the right time. They’re not so much married to the concept of growing a company as they are [the idea of] ‘I want to innovate and grow and let somebody else take it over.’ They’re focusing a little bit more on what their passion is, which may me to start something, build it to a certain phase, and to do different things.
“I think the culture of that in our country is different. So many great companies sprout up and become big quickly. That creates opportunities, and it creates a vision and a culture that young people waking up saying, ‘I want to do that. I don’t want to work at one place for 30 years.’”