E169: Bakari Akil: Mastering the Art of Deal Sourcing and Structuring in Mergers and Acquisitions - Watch Here

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About The Guest(s):
Bakari Akil is the founder of Graves Hall Capital and an expert in mergers and acquisitions. He has bought several companies, including a burlap bag manufacturing company and an educational technology company. Bakari speaks at the entrepreneurship through acquisition program at Cornell's business school and has a unique background in the field, having dropped out of college and learned about M&A through self-study and attending classes at top business schools.

Summary:
Bakari Akil shares his journey into the world of mergers and acquisitions (M&A) and entrepreneurship through acquisition (ETA). Despite not having a formal business education, Bakari was determined to find a path to success. He discovered the concept of leveraged buyouts and realized that he could buy an existing business and use bank financing to fund the acquisition. Bakari did classes at top business schools and built a network of business brokers and investment bankers to source deals. He successfully closed several transactions, including the acquisition of a burlap bag manufacturing company and an educational technology company. Bakari's approach to deal structuring and capital sourcing has allowed him to complete transactions without using his own capital.

Key Takeaways:

• Bakari Akil's unconventional path to success in the world of mergers and acquisitions.
• The concept of entrepreneurship through acquisition and the advantages of buying an existing business.
• The importance of deal sourcing and building a network of business brokers and investment bankers.
• The role of independent sponsors in structuring deals and attracting capital.
• The challenges and rewards of completing M&A transactions without using personal capital.

Quotes:

• "I can go and borrow money from the bank for an existing business that's already up and running."
• "I actually don't put up a lot of money. I actually get paid when I buy a company."
• "There's no free lunch. There's no, 'I'm getting it for free.' It's going to cost something."
• "Be willing to go through that toughness and that grind and not expect to be able to get some great business for no money."
• "There's a ton of time and grind and waiting and patience that goes into doing this."

(Note: The quotes provided are direct quotes from the transcript and may not be suitable for social media sharing. Please select appropriate quotes for social media use.)

Article:

Bakari Akil: A Trailblazer in Mergers and Acquisitions

In this thought leadership article, we delve into the fascinating journey of Bakari Akil, founder of Graves Hall Capital, as he shares his unique approach to mergers and acquisitions (M&A). Drawing from a candid interview, we explore the key themes that have shaped his success and the implications of his innovative strategies.

Introduction: A Different Path to Success

Bakari Akil's journey in the world of mergers and acquisitions is far from conventional. With a background that defies the traditional route of business school and an MBA, Akil's story is one of resilience, determination, and a relentless pursuit of knowledge. His unorthodox path has led him to become a trailblazer in the M&A space, challenging the status quo and redefining what it means to be a successful entrepreneur.

The Power of Leveraged Buyouts

At the heart of Akil's approach to M&A is the concept of leveraged buyouts (LBOs). This strategy involves acquiring an existing business by borrowing money from a bank, leveraging the assets and cash flow of the target company to secure the necessary funds. Akil was captivated by the idea of LBOs as a means to bypass the challenges of starting a business from scratch. He saw the potential to acquire established companies with existing customer bases, employees, and infrastructure, allowing him to hit the ground running.

"I can go and borrow money from the bank for an existing business that's already up and running. I don't have to go learn this business. It's already existed. I don't have to create it. I'm going to find the employees. I got to find the customers. It's all that stuff is all there, and all I got to do is organize the money so I can get this done."

The Unconventional Path to Expertise

Akil's journey into the world of M&A began with a thirst for knowledge. Despite not having a formal business education, he immersed himself in personal finance books and stumbled upon the concept of leveraged buyouts. Intrigued by the possibilities, he delved deep into the subject, attending classes at prestigious business schools like Columbia and Stanford, even without being a formal student. Akil's audacity and hunger for learning caught the attention of professors and industry experts, leading to invitations to speak and teach at Cornell's business school.

"I wasn't a student at Columbia business school, but I lived in Harlem, which is the same neighborhood that Columbia business school went. And so one day when I realized that this class was being taught there, I just went to the business school and sat in the class."

Overcoming Rejection and Finding Success

Akil's journey in the M&A space has not been without its challenges. Early on, he faced rejection from the search fund community, which questioned his qualifications and prerequisites for success. Undeterred, Akil persisted, reaching out to independent sponsors and family offices who recognized the value in his deal structures. By leveraging his network and showcasing his authenticity and expertise, Akil was able to secure financing for his transactions, including the acquisition of NYP Corp, a burlap bag manufacturing company.

"The rejection that I got from the search fund community and the search fund investors at that time... led me to the independent sponsor community. The people who were in that space, who had been doing these types of deals for a long time and recognized that the structure and the deal that I had put together was exactly the type of deal that they wanted to do."

The Art of Deal Sourcing

Deal sourcing is a critical aspect of Akil's approach to M&A. He has developed a three-pronged strategy that includes leveraging business brokers, reaching out directly to business owners, and hosting networking events to connect with entrepreneurs and investors. By compiling extensive lists of contacts and regularly reaching out to them, Akil ensures a steady pipeline of potential deals. His tenacity and resourcefulness have allowed him to uncover hidden opportunities and forge valuable connections.

"I have three approaches to deal sourcing... I would reach out, going online, finding lists of business owners, and just reach out to them directly... I would reach out to business brokers, investment bankers... And then lastly, my weekly event that I hosted up until very recently in New York, where I would bring entrepreneurs and investors together."

Structuring Deals for Success

Akil's ability to structure deals that appeal to investors is a testament to his deep understanding of the M&A landscape. He has honed his skills by studying the guidelines set by the Small Business Administration (SBA) and tailoring his deal structures to meet their criteria. By adhering to these guidelines and making strategic adjustments, Akil has been able to secure financing for his transactions. His approach involves considering factors such as equity rollover for sellers and the involvement of key managers to address industry expertise concerns.

"Once you leave the constraints of the SBA, it's really the deal structure that you put together that defines how things are going to look... The SBA has certain guidelines that will make it possible for them to commit to doing a transaction. And if I can structure the deal against those guidelines, more likely than not, I'll be able to get the SBA."

The Future of Bakari Akil and Graves Hall Capital

As Akil continues to make waves in the M&A world, his future looks bright. Armed with a unique perspective and a track record of success, he is poised to take Graves Hall Capital to new heights. His ability to navigate the complexities of deal sourcing, structuring, and financing sets him apart as a true innovator in the industry. With a memoir in the works and a growing network of supporters, Akil is well on his way to leaving an indelible mark on the world of mergers and acquisitions.

In conclusion, Bakari Akil's journey in the M&A space is a testament to the power of determination, resourcefulness, and a willingness to challenge the status quo. His unconventional path and innovative strategies have allowed him to carve out a niche in the industry, defying expectations and redefining what it means to be a successful entrepreneur. As he continues to make waves in the world of mergers and acquisitions, the future looks bright for Bakari Akil and Graves Hall Capital.

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