This year, two of the largest and fastest-growing registered investment adviser firms, Brookstone Capital Management and FormulaFolios, merged.
The soil for that deal was sown some four years prior, when Dean Zayed, founder and CEO of Brookstone, developed a personal relationship with the co-founder and executive director of FormulaFolios, Jason Wenk. Their mutual respect for what the other had built, and the recognition of the similarities of their businesses, made the two companies an undeniable match.
Though the friendship and the conversation persisted, the deal conversation didn’t result in a transaction.
Instead, Dean Zayed found himself on the sell-side of a deal, when AmeriLife, in 2019, bought a majority share in Brookstone — the first time he had sold a controlling share in his company. Soon after, Dean became the buyer, revising the talks with FormulaFolios and consummating a deal that created a $6.5-billion RIA.
Dean says having a being in the acquiree’s seat gave him a better sense of the due diligence process, and helped him ask better questions for his next deal.
“The experience of dealing with AmeriLife in that previous transaction really helped me frame what to expect, what to ask for, how to analyze some of the moving parts in a deal,” he says. “It was a similar process, but I’d say we navigated much smoother given the precious experience.”
The result of the past couple years of dealmaking is a much bigger firm and a complementary partner to lean on and help the combined organization grow.
Dean spoke on the Smart Business Dealmakers Podcast about both the AmeriLife and the FormulaFolios deals, and how one informed the other.
Listen to the podcast