Finalist | Dealmaker: Adviser
Tracy Larsen, Partner, Barnes & Thornburg (managing partner of the firm’s Grand Rapids office)
- Total employees: About 50 full-time employees
- Business description: Barnes & Thornburg is a full-service business law firm with 13 offices around the United States. The firm offers a range of practices including litigation, corporate law, labor and employment and transportation.
- Personal info: Wife, Karen; five children.
- Educational degrees: B.A. from Hope College, law degree from Indiana University.
- Community involvement: A number of conservation groups, plus the Boy Scouts and ACG’s capital initiative for the Midwest.
For Tracy Larsen, the work of evaluating and closing deals continues to push ahead even in the face of global tumult and a general sense of economic uncertainty.
The Grand Rapids-based managing partner of the Barnes & Thornburg LLP law firm maintains a reputation for having one of the most active practices in the competitive M&A market around the Midwest, as well as a book of business that spans the country, if not the globe.
Larsen says that readily available capital, hungry buyers and West Michigan’s stable of longstanding quality businesses make the area ideal for an active M&A practice.
“I think people are taking advantage of what we have in the market, but they’re somewhat cautious about what might happen if interest rates start to rise, if the economy slows down a little bit,” Larsen said. “It’s more of an uncertain period (looking) to the next year than it was last year looking at what we did.”
Larsen, this year’s finalist in the advisor category for 2016 MiBiz M&A Deals and Dealmakers of the Year Awards, says he personally worked on more than 30 different transactions and closed more than 20 deals.
Larsen estimates that deals he closed in the last year amounted to approximately $2.5 billion in total value, compared to about $2 billion in 2015. He says the book of business in the last year stands out for both its volume and its diversity.
Two of the deals Larsen ran in the last year — the acquisitions of Netech Corp. and Service Express International Inc. to different private equity firms — were the winner and finalist, respectively, in the MiBiz M&A Deals of the Year Awards for transactions of more than $150 million.
“(Larsen) has a highly effective approach to deal-making that yielded tremendous results in this transaction,” said Brad Keyworth, a director in the Chicago office of investment banking firm Lincoln International, who nominated Larsen for his work on the Netech deal. “It started with the upfront effort that (Larsen) put into truly understanding the business — the positioning and value drivers, as well as the potential risks that could come up over the course of the process.”
The “upfront effort” noted by Keyworth in his nomination is a trait Larsen himself finds as among the most valuable assets in successful dealmaking.
“You have to launch the deal before you launch the deal, frankly,” Larsen said. “We’re very strategic in our deals. ... (Economic factors), if you don’t control them, they can get out in front of you and work adversely to your client. We spend a lot of time on the front end knowing exactly how we’re going to sell the asset, what the value drivers are, what we need to do on third-party diligence before we take the company out. Then we try to run a quick process.”
ADAPTING TO THE TIMES
Despite entering a period of what he deems as economic uncertainty, Larsen contends there hasn’t been much of a change in terms of overall deal flow in the last year.
However, he said that some industries — particularly in specific sectors of manufacturing like non-proprietary automotive components — have decreased slightly in terms of valuations in recent times.
“I’m sensing that the buying market is perhaps a little bit allocated heavy in that asset space,” Larsen said. “That said, we’ve got some great auto companies at market that will get sold at great valuations.”
M&A industry reports share Larsen’s general sense of optimism — at least in the short-term.
A 2015 report by global business consulting firm Baker & McKenzie looking at worldwide M&A activity through 2018 also painted a positive picture.
The report notes that global transactional activity will grow 2.9 percent over the next two years, bolstered particularly by favorable monetary policy and lower oil prices.
Even in the inevitable event of an economic downturn or slowdown, Larsen said he’s confident that his practice will endure. The attorney likes to point out that during the Great Recession, his book of business was actually up by double digits, largely because of the number of strategic and well-financed clients he and his firm represent.
“We know how to morph pretty well into what the market needs at the time,” he said. “But don’t kid yourself: The number of transactions will be down, but the transactions that go are much more likely to be completed.” ν