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Yaron Bazaz: Hi Robert, please tell us a little about yourself

Robert Berman: “Hi Yaron, I’m a born and bred Canadian and proud of it. I was lucky enough to receive my business education in two very dynamic companies. The Plessey Company which was headquartered in the UK and Rockwell International in the US. I originally joined Plessey in their sales department, but not long afterward moved into their acquisition and special operations group.

Plessey was a conglomerate of more than 80 companies with manufacturing plants in 56 countries. The product lines were very broad; telecoms, aerospace, electronic components, sewage pipe, consumer electronics and military electronics just to name a few. The acquisition and special operations group at Plessey had the total acquisition mandate, from finding potential acquisitions, negotiating terms, due diligence, and integration. As well, the group was the corporate trouble shooters, coming in to support operations that were having problems in any area, marketing, production, accounting and human resources. If a Plessey operation, anywhere in the world, lost a senior staff member due to sickness or resignation, someone from the special operations group would be installed as the interim manager.

The group was also responsible to ensure all Plessey companies were profitable. I spent 5 years with Plessey, went to work for Rockwell for 3 years in a similar capacity and then returned to Plessey. In total I spent 17 years in the acquisition and special operations group of Plessey. I sold and marketed products, systems and services in more than 60 countries and I have lived and worked in Canada, USA, UK and the Netherlands. Plessey was eventually split up and sold to Siemens and GE in the UK. After the split-up I went to work as an independent consultant providing turnaround, acquisition, strategic planning and international marketing expertise.”

Y.B: You had published a business guidebook. Can you elaborate on that?

Robert Berman: “I have authored an e-book, The Business Buyer’s Manual. Basically I have put the knowledge that I gained in acquisitions with Plessey, Rockwell and as independent consultant in writing. As I previously mentioned, Plessey was the university of acquisitions. I learned the true meaning of due diligence and how sellers, be they independent business people or large corporations, can legally set-up a business for sale. Making a painted Pigeon look like a Peacock! In my role providing turnaround expertise I have faced numerous situations where people purchased businesses and in short time later found out what they had actually bought and the expectations were substantially different than reality. I have also written articles for numerous business publications and had the by-line of the Business Doctor with the National Post.”

Y.B: How did you find yourself involved with corporate turnarounds and IPO’s activities?

Robert Berman: “During my tenor with Plessey I had been involved with a few corporate turnarounds and later as a consultant I was called in to help “increase sales” and quickly learned that the corporation needed to be turnaround as the lack of sales was because of other underlying problems. As I previously mentioned, in some cases it was because a new owner of a business didn’t get what he thought he was buying. With respect to the IPO’s, I have done two. Both were the aftermath of turnarounds. The businesses had potential but needed additional cash in order to grow.”

Y.B: Can you give as a case study of a success turnaround you had led?

Robert Berman: “I joined a small company in Western Canada as President & CEO. The company had been in business for 12 years and had never shown a profit. It had some product that had potential, but it was managed by the founders - three technocrats. Over the years they had managed to convince local business people to invest in the company, it was always the next product that would be a winner! When I joined the company had 3 months of survival, the bank was not advancing anymore money. By the end of the year, the company had cash in the bank, was debt free. In 3 years sales went from $2.3M to $20M and we had made 2 acquisitions. I then took the company public.”

Tips

Y.B: Any tips for shareholders considering massive turnarounds?

Robert Berman: “I think the biggest problem facing shareholders and boards of directors is recognizing when the company is starting to get into trouble. I have had to decline numerous turnaround positions because it was too late. A company that can be turned around needs time to maneuver and time usually means access to some money. Many times, the board or management wait until the bank cuts off funds, a major supplier refuses to advance credit, or key members of the staff resign before someone yells were in trouble, by then it’s usually too late. No one likes to admit that they cannot handle their business, we all have egos that need to be stroked. However, as I tell managers, asking for help is what a smart business man does, going bankrupt will do nothing for your ego.”

Y.B: What are the Pros and Cons for early IPO at TSX Ventures and alike compare to raising capital from VC/PE resources?

Robert Berman: “Public listings are very expensive to maintain, both in hard dollars and time. Very few companies realize the impact on their internal resources to have a public listing and this in itself can lead to operational problems. And, it becomes a vicious circle, the more problems you have in the business, the more time you have to allocate to the public listing. In my opinion a public listing defiantly takes concentration away from managing the business.

Investment into a company generally means a board of directors that will represent the shareholders, this also takes time away from the day to day business activities. That being said, many of the larger VC’s have resources at their disposal that they can use to support their investments.

An entrepreneur, in many cases, needs make some business decisions based on his gut instinct and when you have investors it becomes necessary to be able to justify all your actions. In some cases this type of justification can be difficult, the end result can be that the entrepreneur does not do what he thinks he should because he cannot justify it, other to say it feels right.”

Insights

Y.B: Looking at the North American economy, what are the most significant developments we are witnessing now and about to witness at the near future?

Robert Berman: “I think that North America has to re-start its manufacturing capabilities. To think that a society can exist by pushing paper and money around is living in a fools paradise. I am big on the renewable energy sector, wind, solar, tidal, etc. I think that the industries involved in those technologies have very bright futures. I believe that their will be a shake-out of the industry over the next 10 years and some key players will come to the forefront of the technologies and installations.

I also believe in small business, it is and always will be the backbone of the North American economy. However, that has to include manufacturer as well as retail and services.”

Y.B: What kind of projects you currently looking for?

Robert Berman: “Any project that involves strategic planning, whether it is a turnaround, international sales and marketing or acquisitions.”

Y.B: Out of office, what are your preferred leisure time activities?

Robert Berman: “I love French cuisine and do a lot of gourmet cooking. The creamier the sauces the better!!!! I also enjoy live theater and the symphony. I would like to apply my hand to a fiction novel - but never seem to find the time!”

Y.B: What’s next for you Robert, where you intend to invest most of your time and efforts?

Robert Berman: “I enjoy “doing business” and that is where my mind is most of the day!”

Y.B: Thanks a lot for your time and all the best

Robert Berman: “Thank you Yaron, it is my pleasure”

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