Toronto dealmaking group’s head on M&A ‘sweet spot’

Article content

The Association for Corporate Growth may not be on the radar of non-institutional investors looking to buy or sell a mid-market business.

But as private businesses face economic and demographic shifts that make it both harder to find financing through traditional means but also see institutional ‘dry powder’ looking for deals at a time when growing numbers of owners are looking to sell their business, ACG’s expertise in the M&A space may be just what they need.

And when the Toronto chapter of the global organization serving investors, owners, executives, lenders and advisers to growing middle-market companies decided to professionalize, it turned to an experienced leader in the not-for-profit and marketing sectors.

Mike Fenton, the president and chief executive officer of the Toronto chapter of the Association for Corporate Growth (ACG), joined the association in 2018 and has a background ranging from executive director, campaign, at the West Park Healthcare Centre Foundation to executive director at Macedonia 2025, and heading the National Advertising Benevolent Society. He is also a partner at MJF & Associates Marketing.

He recently spoke with Canadian Family Offices in advance of ACG’s largest annual event in Canada this month, the Capital Connection Conference, discussing how he became involved in North America’s largest organization serving the Canadian mid-market private equity and M&A sectors, and why it could be helpful to Canadian family businesses and family offices.

How did you become involved in ACG?

“It’s a combination of things. For the past 20-plus years I have been in executive roles in the not-for-profit and charity sector, and prior to that, I was in marketing, sales and advertising.

I have headed up a national charitable organization and been part of the executive team on a fundraising campaign for a $100-million capital investment initiative for a hospital foundation. I have also worked for an international non-governmental organization involved in a European country, seeking to secure investment from North America.

Then, about nine years ago, I got an opportunity to join ACG Toronto, and the skillset is much the same as it is for those other not-for-profits. The ACG Toronto chapter was looking to add their first-time executive director with that type of leadership experience because, previously, it had been entirely volunteer-run. And it had decided it wanted to professionalize operations and expand programming, similar to large-market chapters in New York and Chicago.

Can you describe the aim of ACG and its annual Toronto Capital Connection conference?

“ACG goes back about 70 years, starting as a businessmen’s networking club for doing deals. Over the past 25 years, it has evolved into the largest professional organization for mid-market investors in North America.

Our chapter network comprises 15,000-plus members with 59 chapters, and hosts about 1,200 events annually. Our primary mandate is focused on dealmaking, bringing capital providers together with industry advisors and business owners looking to sell or finance businesses valued at $5 million to $500 million.

And Capital Connection is our largest annual, longest operating national conference [Nov. 13-14 in Toronto]. Now in the 21st year, the two-day event has an opening night gala and then a full-day conference and tradeshow.

Notably, we run a proprietary program at the conference called ‘Deal Source North.’ It’s like speed-dating for M&A deals where private equity firms and investment bankers have 20-minute meetings, back-to-back.

The conference is also an excellent networking opportunity for family offices looking to buy, sell or invest in a business, or learn more about the space while connecting with about 600 senior private equity, investment banking and related professionals that attend.”

Why has ACG sought to cater to family offices more in recent years?

“Many family offices have roots in business ownership. They might have run a business and sold it, or they still run one or even several businesses.

What’s evolved over the last 15 years – we’ve seen this even earlier in the U.S. – is growing synergy between what family offices are seeking and what ACG offers. Notably, there is an impending massive transfer, with many business owners seeking transition and succession planning to exit – be it passing it on to the next generation or divesting the business to new ownership.

On the other side of this are many family offices, who have already sold businesses. And instead of investing in conservative investments, being entrepreneurs at heart, they are interested in acquiring mid-market businesses outright or investing in partnership with others, including private equity funds.”

Why has the conference and ACG typically not been on Canadian family offices’ radar?

“Unless you’re in that sweet spot of working in the M&A business, you probably wouldn’t know about ACG.

Organically, some family offices find us because they’ve had advisors and other contacts who are ACG members. But often it can be pure happenstance where a family office is looking around and asking about organizations to help find businesses to buy, or help them sell a business.

And so, ACG comes up because of our long-time reputation and access to a diverse variety of capital providers and investment advisors. To that end, I field about two to three phone calls or emails a week from family offices and their advisors interested in how we can help.”

What can ACG offer family offices?

“Over the last five years, we’ve really focused on hosting seminars, introducing our membership to family offices.

In addition, our members provide connections and professional expertise in mid-market M&A, that family offices often cannot access on their own. We have an established ecosystem of advisors, lawyers, accounting firms and other specialty consultants to help family offices looking to invest, buy or sell.

We also partner with other business and industry organizations that we help family offices connect with.

ACG covers all industry sectors and practice areas, so if you’re looking for a mature business in mining or resources or manufacturing, or new ones like AI [artificial intelligence] tech, we have members in every sector.

And geographically, we cover the country with chapters in Toronto, Calgary, Edmonton, Vancouver and Montreal.”

What is ACG’s role in the current financing environment and demographic shift?

“If you’re looking for growth opportunities across many sectors, ACG programs and specifically Capital Connection are targeted and efficient opportunities for business development and deal-flow. We provide access to capital and advice for people who want to grow their businesses and get outside their comfort zone investing in or acquiring businesses outright.

Moreover, the mid-market M&A sector continues to be dynamic, supporting small- to medium-size enterprises.

There is a lot of money – call it ‘dry powder’ – on the sidelines that private equity firms and pension funds must deploy.

Combined with a growing number of aging owners needing to transition out and sell their business after the pandemic, conditions still favour investors, even amid higher interest rates and inflation.

It is now harder for businesses to find money through traditional means because those typical financiers and buyers have become cautious, and so if you have money to deploy as a family office, you can pick where you want to invest because company valuations have come down so much.”

Responses have been lightly edited for clarity and length.

More from Canadian Family Offices

• Family offices are fat targets, but scams likely stay under the radar
• ‘Soul-baring experience’ needed for proper onboarding of clients
• Divesting may not be the right ESG move
• Next gen on how 7 kids, 14 grandkids plus dad work together

Please visit here to see information about our standards of journalistic excellence.