While Dean Zayed was ready to make a deal for Brookstone Capital Management, he wasn’t prepared to walk away from the business.

“It’s great to say we got to $3 billion in assets under management in 13 years and did it organically,” says Zayed, the firm’s founder and CEO. “But to get us from $3 billion to $20 billion, we realized that we were going to have to do some deals.”

In 2016, Zayed got to the letter-of–intent stage with a potential buyer before stepping back. Two years later, he and Darryl Ronconi, now Brookstone’s president and COO, found what they were looking for in Clearwater, Florida-based AmeriLife Group LLC.

“We probably could have sold for more money and walked away, but that wasn’t our goal,” Ronconi says. “We found somebody who is going to partner with us in the right way so we can manage the business and grow this together.”

Last summer, AmeriLife completed a deal to acquire a majority interest in Brookstone.

Zayed and Ronconi take us behind the scenes of the AmeriLife deal and offer keys to finding a buyer who can help you grow your business.

Lots of work to be done

Brookstone's business model is to attract insurance agents who are independent with their own practice and successful but are leaving money on the table and not providing a more holistic solution to their clients, Zayed says.

“The thinking was we would be their partner on the securities side and really help them build up that part of their business,” he says. “AmeriLife identified us as a prime asset in the space. They sought to make a strategic move to bring that solution within their world.”

Zayed wasn’t looking to exit the business. His goal was to find a partner that could work with him and Ronconi to build on what they had already achieved.

“We believe we still have lots of work left to do,” Zayed says. “This is not one of those deals where there was big succession planning for somebody looking to retire. This was a whole different story about growth and synergies and finding the right strategic partner.”

The experience in 2016 that did not end in a deal proved quite valuable for Zayed’s approach to making a successful deal.

“It greased my thinking and softened me up to the idea of selling a majority share,” Zayed says. “It was a dry run that turned out to be a good experience for me.”

Things will change

The thing about dealmaking is that you can negotiate just about anything you want. You can own a majority share and leave the day-to-day operations to someone else. Or you can sell a majority share and still play a key role in plotting the future of the company.

Either way, once you make a deal, things are going to change, Ronconi says.

“One of the biggest lessons learned for an individual who is selling their company is if they are going to stay on and run it, they better understand who they are going to be partnering with and how it’s going to work,” Ronconi says. “It’s kind of a shock to a person who’s going from being a 100 percent owner to part owner. When you sell part of your company, you’ve got other people that you you’ve got to answer to for business decisions. Sometimes people don’t take that into consideration.”

Zayed wouldn’t have done the deal if he didn’t feel comfortable with his level of control going forward. Still, he took actions to protect those interests should things change down the road.

“We obviously anticipated that if there’s a change of control at AmeriLife, who is the buyer, that could impact us,” Zayed says. “We could be dealing with a different CEO and a different parent company tomorrow. So we definitely incorporated those terms very clearly in the deal so that it protected our rights as minority shareholders and as a management team. The lawyering process is very important.”

In the end, Zayed is excited about the future and being part of AmeriLife.

“Our goal was to keep a lot of skin in the game with a lot of equity and a lot of upside,” Zayed says. “This was not going to be the deal that ended all deals for us. It’s a deal that allows us to grow that much faster and push us to the next level as a company.”

Photo: From left, Darryl Ronconi, president; Dean Zayed, founder and CEO, Brookstone Capital Management