BY RHONDA MILLER
Providence Business News
PBN: United Brokers Group has been based in East Greenwich for five years. Its Main Street business sales division and its mergers and acquisitions division work throughout the Northeast, with 80 percent of sales outside Rhode Island. How did the company determine this is an opportune time to create a new marine-brokerage division?
FLYNN: Ten months ago we managed the sale of a $4 million annual revenue premium retail seafood company in Fairfield County, Conn. to two investment bankers in Manhattan. That experience revealed to us that marine-related businesses have been largely overlooked by the merger and acquisitions community in the northeast. The seller of that profitable, two- location business, Jardar Nygaard, decided to join my firm after his business was sold. As we were successful in selling his business - and we are both surfers – we quickly saw a larger business opportunity for brokering businesses with a connection to the sea. Marine businesses are a nice match with our intellectually geared, community- driven Ocean State brokerage firm. Jardar has spent his career on or around the sea and also owns an oyster farm in Connecticut. He knows how to make money with marine related products and services. We created a strategy to develop a dominant business brokerage brand for selling marine-related entities on the buy or sell side.
The marine strategy was also a logical and innovative expansion of our mergers and acquisitions division, which confidentially markets privately- held businesses with revenues of $2 million or greater. We are affiliated with William Raveis, the largest privately held real estate company in New England, which enables us to be in compliance regarding real property in marine- related business sales in the states in which we operate. Many marinas and fisheries businesses have real property as an asset. William Raveis is also an established and respected realtor in the New York market, which provides further local support to our strategy. Business valuations for the marine-related entities are provided by major independent CPA firms that have the professional Certified Valuation Analyst, or CVA, designation.
PBN: What types of marine businesses do you expect to be working with?
FLYNN: Fisheries-related businesses, ferry services, onshore dock services, marinas and passenger vessels are examples of ocean and coastline business model transactions that we broker.
Our top segment focus is on marine protein, which is comprised of the major seafood processors who process the seafood, brand the products and sell to distributors. We will selectively represent seafood wholesalers and just last week we completed a sale of this type of business.
PBN: What’s your perspective on the status of marine businesses in general? Do you think there will be sales of companies or mergers and acquisitions because of the slow recovery of the economy, especially in Rhode Island? Or do you think there are other factors that will generate business for your brokerage?
FLYNN: Investment demand in seafood is responding to ever-growing retail consumer demand. People are eating more seafood and this drives investment required to respond to the demand. It’s a global phenomenon triggering investment and acquisition opportunities to both scale up and selectively vertically integrate. All of this generates buy-sell opportunities for businesses on the water and along the coastline.
PBN: You were president of the Cookson Group Company Key-Tech, Inc., a patented plastics technology company with operations in Rhode Island and England. You acquired and sold that company to a publicly-traded company in Europe. Based on that experience, do you foresee international business as an opportunity for your new marine brokerage division?
FLYNN: Yes. We perceive that Rhode Island and other Northeast-based marine-related entities are logical and attractive investment targets for European and Asian investors who seek brands, consolidation, export and import opportunities and scale in the United States markets. Norwegian and Chinese investors, many with offices in Manhattan, are among the most active and take long-term perspectives in their investment decisions. Chinese investment in American-based food companies, including meat processing, has been very strong and growing. We will also selectively work with private equity groups to develop a major presence in Marine-related entities.
PBN: Based on your experience in manufacturing and technology in Rhode Island, including as a founding member of the “The Manufacturing Summit,” a manufacturing policy organization, what’s your perspective on why Rhode Island’s economic recovery is lagging behind other New England states? What types of initiatives do you think can help kick-start the Rhode Island economy?
FLYNN: Rhode Island’s economy lacked the compositional breadth that neighboring Massachusetts and Connecticut economies had in their industry portfolios and we are therefore slower on the uptick. I travel daily throughout New England and I perceive that the Rhode Island business community lacks the level of confidence to invest that we observe in Massachusetts and Connecticut. This is sometimes puzzling, given the much-improved local credit environment over the past two years and the easily documented major improvements at our local SBA office.
Private investment starts with attracting and retaining top business people and providing them with the climate and tools that will trigger their investments, especially in the areas of workforce development and innovation. The Rhode Island political culture and business culture have to foster stronger ties, which should include more business people running for public office. The state has to be regionally cost-competitive to attract and retain talent and investment. Investment capital is smarter than any government bureaucrat when it gets down to finding good long-term investment returns. Rhode Island’s small size is a benefit for scaling products, leadership access and easy reach to over one million consumers, but we have to be alert for the same small group of business people on every state, quasi-state and business association board. The end result can be “cooperative self delusion,” whereby the same group reinforces the same stale ideas and a few large-ego business people routinely dominate the discussion and group decisions, often with disastrous results. Every business person and citizen of this state ought to be able to also summarize this state’s strategy and direction. Until we can do so, then I conclude that our young people will continue to leave the state for financially stable environments that offer superior long-term job creating opportunities created by well-thought-out private and public investments.