Brook Run Partners co-founders (from left) Ross Harris, Matt Kanne, Alex Pangraze and Ian Batt.
A newly launched local M&A advisory firm sees fertile ground ahead for mergers and acquisitions as it continues to introduce itself to the market.
Brook Run Partners was founded earlier this year by Ian Batt, Ross Harris, Matt Kanne and Alex Pangraze, who each left other gigs in the industry to strike out anew.
Batt came over from Atlantic Union Bank, Kanne and Harris were with Henrico-based Transact Capital Partners and Pangraze previously worked in investment banking at Barclays.
The group has since set up shop in the Fan at 2111 W. Main St., advising owners of small and medium sized businesses that are looking to sell.
“There’s M&A activity for all kinds of life reasons,” Pangraze said. “While there’s macro factors always at play, in the lower middle-market there seems to be pretty consistent deal flow because these are smaller companies run by owner operators and life happens and it’s time to sell.
“Helping an owner and a family recognize a significant return on the their life’s work is sort of what we do,” he said.
Brook Run closed its first deal in recent weeks – the sale of locally based Brockwell’s Septic & Service to a competitor – and has several others in the works.
It targets deals worth $10 million to $150 million and also offers business valuations and helps companies raise capital.
The four partners, all in their mid- to late 30s, knew each other from within the industry and were each thinking about starting their own shop when they decided to band together.
“We all were at inflection points in our careers and had an entrepreneurial itch,” Pangraze said.
At launch, the group said, the industry was coming off a slow year in 2023 and experiencing a bit of a logjam this year, in part because of uncertainty leading up to this month’s presidential election.
“Regardless of who wins, with any presidential election you’ll see it slow down because people just want to know what the future looks like,” Kanne said.
Harris said it’s not that deals weren’t being pondered.
“The interest in buying companies was still there but sellers held off, so there’s a lot of backlog that started to come out in 2024. In general, there’s just a ton of money out there looking to purchase low- to middle-market companies,” Harris said.
Batt said he thinks that backlog will loosen even more now that the presidential election has been decided.
“The pace and the amount of conversations is materially up from earlier in the year,” Batt said. “Now that we have the certainty of the election behind us, I think more people will be ready to have those conversations.”
Batt is so bullish, in fact, that he thinks a different sort of backlog will develop in the next year or two.
“If business owners are thinking (of selling) within the next 12-24 months, they really need to start talking to M&A advisers. Because the line is going to get longer. I really do believe you’ve got a bunch of pent-up demand, and you don’t want to be the last person in line.”
While its first deal involved a Richmond-area company, Brook Run’s partners said they’ll travel anywhere for a client and are having discussions with sellers from New England to Georgia.
The group counts local competitors such as Dickinson Williams, Marriott & Co., Transact Capital and Sterling Point Advisors, but says there are enough deals to go around for everyone.
“Richmond probably has more firms like us than other cities our size,” Batt said. “Richmond has some good quality shops.”