Bob Campana can barely contain his excitement about the M&A market in Northeast Ohio.

“It’s the best climate I’ve experienced since I got out of college in 1981,” says Campana, CEO of Campana Capital. “I’m very optimistic about the region and I think we have a lot of upside and a solid foundation from which we can grow. We have a level of talent in Northeast Ohio to compete with anybody in the world, without question.”

Campana Capital originally started with a focus on the manufacturing space, but has evolved into a broad range of real estate development and private equity investments.

“Investors want to know that the capital they are investing is considered precious and is treated as such,” Campana says. “There are many options in the marketplace. So when capital is invested, the recipient should treat it as a solemn responsibility to gratefully repay the capital with an appropriate return for the risk incurred.

“Capital is like oxygen. Nobody notices when there is enough, but everyone notices when there isn't enough.”

Campana spoke with Smart Business Dealmakers about the state of the current capital market, some tips that guide his approach to dealmaking and one of his most memorable deals.

How would you gauge today’s capital market?

There are banks that have an interest and a certain appetite for financing. But if the business is too small, private equity is typically not fishing in those waters because it’s just not worth the time and effort.

The smaller deals tend to take as much work as the bigger deals. The big guys are typically looking for higher-valued companies. Also, if the cash flow and multiple aren’t at a certain level, private equity typically isn’t interested.

When you go beyond a certain level and you start getting into private equity, these people are flush with cash. From a seller’s standpoint, you need to know where you line up in that position of being big enough to attract private equity or not big enough where you need to participate with private investors.

My focus is on acquiring smaller businesses. We are looking for opportunities that are in the range of $2 million to $10 million in sales. They may have a $400,000 to $2 million EBITDA. We’re even more active with funds that invest as private equity funds. We individually don’t participate above that level, but we are investors in numerous local funds, including Mutual Capital Partners and Riverside Co., that are quite active in this realm.

What are some things that drive your approach to dealmaking?

I grew up in an entrepreneurial household and witnessing my father take calculated risks fascinated me. Being able to rely on oneself versus an employer also resonated with me.

I am a learning machine. I read every day as much as possible and I associate with people who are at the top of their field so I can learn from them.

I always seek advice from multiple sources. It is my job to be a little wiser every day to operate in this exponentially faster moving marketplace.

What is a key piece of advice you can share with other dealmakers?

Learning to ask for advice from trusted advisers sooner rather than later. Surrounding myself with great mentors and business associates has yielded tremendous results.

Remaining humble, yet confident and always operating under the Golden Rule. Constant honesty yields instant credibility. I am the benefactor of this way of life, as are my business associates and my family.

What is one of your most memorable business deals?

In 2000, we sold a pipe manufacturing operation in Houston called Bellville Tube to Lone Star Steel. We were a strategic supplier to Lone Star and they were a strategic supplier to us. We were customers and suppliers to each other and we ended up with a strategic relationship.

It grew to the point where they inquired about acquiring our company because they saw a fit. This was a much larger business than we were and they saw acquiring our company as a strategic fit.

They thought the strategic benefit of owning that operation had growth potential that was worth the price they paid. It was a three- to five-year courtship that led to the sale. We had a very good working relationship, but at the beginning, there was never any thought of Lone Star being a buyer. However, as the relationship expanded, the topic came up and after a couple years, we decided it was the best move for us because of some of the dynamics in the industry that had changed.

You never know when those dynamics are going to change. Buyers and sellers need to always be cognizant of what’s going on.

How to reach: Campana Capital, (440) 935-4480