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The Wise Exit is an open dialogue with fellow founders and former business owners sharing real stories and offering honest advice around selling their companies to some of the top acquirers in the world.
Beyond the entertaining and educational exit stories, host and M&A Advisor, Todd Sullivan is here to help demystify the Mergers & Acquisitions (M&A) process. For example:
- How much is my business worth?
- What is Net Working Capital?
- When should I get a Quality of Earnings analysis
- Should I hire an Investment Banker, M&A Advisor, or Business Broker?
- When do I talk to my Key Employees about a possible transaction?
We hope you enjoy... and learn a few things along the way!
The Cashing Out Mergers & Acquisitions (M&A) Podcast | E33 | April Anthony
00:00:00:00 - 00:00:15:11
April Anthony
And so, you know, I think to entrepreneurs, I say, you know, sure, we all want to be profitable. We all want to have a successful exit. But at the same time, the best way to get to that successful exit is to find the thing that you were so passionate about that it doesn't feel like work.
00:00:16:16 - 00:00:40:01
Todd Sullivan
Welcome to the Cashing Out podcast, where our fellow founders share real stories and offer honest advice around selling their companies to some of the top acquirers in the world. My name is Todd Sullivan, CEO of Exitwise, where we help business owners create the exits they deserve. Today, we are very fortunate to be chatting with April Anthony, currently the founder of the VitalCaring Group, which is her fourth home health care company.
00:00:40:13 - 00:01:03:02
Todd Sullivan
April is a home health care and technology entrepreneur with three exits under her belt. She started her career as an accountant, but at the age of 25, with the initial goal of being a stay at home mom, April talked herself and her husband into buying one of her clients, which was a failing home health care company. The next 25 years is a remarkable story of perseverance and success.
00:01:03:09 - 00:01:34:20
Todd Sullivan
where April built and sold three home health care businesses for more than $1.5 billion. April’s superpower comes from her early days as an accountant and her unwavering perseverance to follow her purpose, which allowed her to flip the home health care industry on its head. In our discussion, April shares how finding your purpose will drive your business success. Why you should do due diligence on your buyer and when to sell pieces of your business while rolling equity to take a second, third and fourth bite of the apple.
00:01:35:04 - 00:01:37:19
Todd Sullivan
I hope you enjoy my conversation with April Anthony.
00:01:40:09 - 00:02:01:16
Todd Sullivan
Hello, everyone. I'd like to take a minute to highlight this week sponsor Doeren Mayhew, a top 60 national accounting tax and M&A advisory firm who we frequently recommend to conduct sell side QofE or quality of earnings for our clients. In 2023, there are a lot of things changing in the world of M&A. Economic headwinds failed banks and big bankruptcies.
00:02:01:23 - 00:02:22:09
Todd Sullivan
But with the credibility of a sell side. QofE from a top firm like Doeren Mayhew, more buyers will look at your deal. Buyer diligence will run faster and your investment banker will be armed with clean financial data to be able to address any buyer questions with well-conceived responses. What this really means is you're more likely to maximize your exit.
00:02:22:21 - 00:02:43:07
Todd Sullivan
Doeren Mayhew is one of Forbes best tax and accounting firms in the United States. Check out their quality of earnings offerings and everything else they can help you with at doeren.com. We'll make sure to put a link in the show notes.
April, thank you so much for being here. Very excited to have this talk with you.
00:02:43:14 - 00:03:07:02
Todd Sullivan
Your background is amazing. I know you know one of our best, best, most downloaded episodes with Shannon Wilburn, and she recommended that we talk to you. And then you and I got to hear your whole story. I am thrilled that you agreed to be here. So much so that I don't know if you might even be a neighbor of yours, but I asked Mark Cuban to kind of take the next time slot because you are so much more important.
00:03:07:02 - 00:03:08:10
Todd Sullivan
So thank you for being here.
00:03:09:01 - 00:03:12:23
April Anthony
Well, if the Mavericks don't make the playoffs, I'll be more than more even for a whole season.
00:03:13:15 - 00:03:31:22
Todd Sullivan
There you go. I love it. So I think it's just a natural place to start is you're at PricewaterhouseCoopers, right. And maybe you could talk to us about the early beginnings, that foundation that you created that led to the decision to purchase your first business.
00:03:32:16 - 00:03:52:18
April Anthony
Yeah, I. I'm going to count it by training. Did a few years at Pricewaterhouse, and after my first busy season as a newlywed, my husband said, Hey, you know, maybe this isn't the best career path. And I said, You're right. I really was kind of thinking my career path was to become a stay at home mom. And we agreed that was sort of where we were headed.
00:03:52:18 - 00:04:10:23
April Anthony
I said, I just need a job. I don't need a career. I just need a job. For a couple of years. We could save some money and start a family. And so that all seemed like a great plan. And I left Pricewaterhouse and threw an odd set of circumstances. I end up stumbling into this job of becoming a controller for a home health care company.
00:04:10:23 - 00:04:27:23
April Anthony
And my first assignment, once I get there, is to do the financials. And in those days, home health was what you call cost reimburse. And it meant that every year Medicare as the primary care would sort of set a limit and they would say, as long as you spend less than this maximum limit, we'll pay you what you set.
00:04:28:06 - 00:04:46:14
April Anthony
But if you spend over the maximum limit, we won't reimburse you beyond that limit level. Well, sure enough, this company had four of these Medicare provider numbers and one of the four was well over the limit. And being a good accountant, I did a budget for the rest of the year. I discovered that it was actually going to get worse before it got better.
00:04:47:07 - 00:05:08:13
April Anthony
And so I went to the owner and I said, Hey, listen, you have a problem, What would you like to do? And he said, Let's sell it. And I thought, okay, but it’s money losing, cost reimbursed reimburse businesses. I'm not sure I'll be successful at that. So sure enough, I started making phone calls, trying to find an interested party, had a few conversations, but eventually they all came to the same conclusion of having no interest.
00:05:08:13 - 00:05:29:04
April Anthony
And so I go back a couple of weeks later to report my activity, and in about halfway through this conversation, my deeply competitive gene comes out of me because I just really don't like to fail at anything. I just a very, very competitive person and I'm thinking, here's my first big assignment and I'm going to have to admit that I failed at this first job.
00:05:29:04 - 00:05:54:04
April Anthony
And so with zero forethought planning, which is unusual for an accountant, I say these words, What if I just buy the assets? And I said, Well, wait a minute by that point. But I really mean it. Why don't you just give it to me? Because you said you've got enough capacity in these other three. You could absorb all your costs if you just had those three, if you just didn't have this one, you would be in the best possible position.
00:05:54:04 - 00:06:13:05
April Anthony
So just give it to me with the losses that it has today. And again, he said, Sold. And I said, Wait a minute, my new husband might have an opinion about this topic. So I rushed home that evening and I was trying to figure out how was that a better deal since I said to my husband, Honey, good news, we're going to buy a home health agency.
00:06:13:12 - 00:06:31:12
April Anthony
At the time, he said, Well, with what? And I said, Well, that's the better news. They're just going to give it to us. And as the story unfolded, he eventually listened and said, Hey, one question. What do you know about home health care? Gosh, I don't know anything about her health care, but it doesn't seem that hard. Those auspicious words.
00:06:31:12 - 00:06:55:11
April Anthony
I returned and at the age of 25, within 58 days of experience in the home health care industry, I became the owner and CEO of a money losing source reimbursed business. So my entry into entrepreneurship was not necessarily a planned one. I love the phrase, “God does not call the equipped He equips the called.” And I think for me that that ended up being what it was really all about.
00:06:56:00 - 00:07:08:05
April Anthony
Stumbled my way into home health care, but then really found something that now for the last 31 years has been a business that I have just loved and felt passionate about the fold to for all these last 31 years.
00:07:09:00 - 00:07:31:16
Todd Sullivan
Wow. What a beginning. April. That's fantastic. I want to step back just a little bit because it sounded like your first assignment was to go find a buyer for, you know, a failing business, Right? That's hard enough for us professionals to go out and find buyers for really quality companies, right? So that did not seem like a winning situation.
00:07:31:16 - 00:07:53:19
Todd Sullivan
But you come back and turn that into the ultimate negotiation of, you know, what about me? Oh, wait, wait, about what about me? Let me go ask. And you end up with a fantastic opportunity, right? And you obviously had the appetite for risk. So it's a great kind of entrepreneurial beginning. But again, like what I really, really, really like is that you have the accounting background, right?
00:07:53:19 - 00:08:17:08
Todd Sullivan
You know what you're looking at when you're looking at these financial statements and seeing where this business could go and potentially what the problems are. And maybe you have an idea of what you're going to do to fix that. Right. I think as entrepreneurs, we tend to be more on the sales side, the visionary, the ones that is going to try to create product market fit and the unit economics the way the business runs tends to be slightly secondary.
00:08:17:13 - 00:08:24:05
Todd Sullivan
So I love where coming in on this. All right. So now you own this business and what are the next moves?
00:08:24:17 - 00:08:46:09
April Anthony
Well, so from there, my first real thought was, okay, I don't know anything about home health care. I don't know exactly how to run this business, but I know for certain I don't have any money. And so losing money is definitely not going to be something that I capable of doing. And so first thing I did was go in and lay off all the employees that were in the back office that weren't licensed employees.
00:08:46:09 - 00:09:01:10
April Anthony
So I kept the nurses and the therapists, but I became kind of the billing clerk and the medical records clerk, and I did the accounting and I was the hiring manager and I was kind of in charge of everything, but I was I was kind of a one man show when it came to all of those administrative functions.
00:09:01:19 - 00:09:19:02
April Anthony
But I was also a one man show when it came to sales and marketing because I also knew one of the keys to success was going to be growth, that we needed to create an environment where we could really grow quickly. And so I developed my my elevator pitch a couple of minutes. I thought, okay, I know just enough.
00:09:19:02 - 00:09:39:07
April Anthony
I can go out in the market and start selling. So I got my little two minute elevator pitch together. I went out and started calling on doctors and hospitals, discharge planners and trying to get some business. And I was sort of facing rejection after rejection after rejection when finally I got behind the window, you know, Do you ever go to your doctor's office?
00:09:39:07 - 00:09:53:21
April Anthony
There's always that little glass window. And as a salesperson, your objective is, Man, I just want to get on the other side of that window because then I've got a chance to close the deal. So sure enough, for the first time, I get invited into the back of the office As a salesperson, I think I'm about to make my first sale.
00:09:54:05 - 00:10:13:06
April Anthony
About that time the physician comes walking down the hallway and he notices my name badge with Home Health on it, and he says, Home health. What? What do you all do when a patient has CHF? For the life of me, I had no idea what CHF even was, let alone what we did for it. And I stumbled and stammered and I said, had to bring my nurse back.
00:10:13:06 - 00:10:31:15
April Anthony
And then he asked about COPD and again I was clueless about the diagnoses and what we did for it. And so eventually he dismissed me and as anticipated I walked away, ended with a referral. And it was kind of at that moment when I knew my elevator pitch wasn't going to get the job done, I needed a different approach.
00:10:31:15 - 00:10:50:07
April Anthony
And so I went back to my office that afternoon and I started calling our nurses and our therapists, and for the next couple of weeks I scheduled ride alongs. I said, Hey, can I just come with you? Will you tell me what does this patient have? What does that mean? What are we going to do about it? What do we hope will happen as a result of our care?
00:10:50:07 - 00:11:18:10
April Anthony
You know, what will it look like when our care is completed? What will they be able to do? And if I could just sort of observe, maybe I could have some stories to tell the next time I go out marketing. And sure enough, that was that was sort of what I thought was going to be a couple of weeks of building a better sales pitch turned into really probably the most transformative two week period in my adult life, because it was it was those two weeks where all of a sudden for the first time, I got to see what home care was all about.
00:11:18:10 - 00:11:39:20
April Anthony
I got to see patients in their home. I got to see all the challenges they face. I got to see the way our nurses with such compassion come in and care for them. And and I got to observe what it was all about. But by the time I would sort of get to the afternoons of those ride along days, my head would be sort of swimming with clinical jargon and I would finally kind of say, Hey, I can't take anymore.
00:11:39:20 - 00:12:11:08
April Anthony
Don't don't tell me any more clinical diagnoses or information just tell me about you. How is it that you came to be at this place? And after a few days and a few different people, I came to notice that everybody's stories were really similar. You know, something like I knew I wanted to be in the clinical field from the time I was a young person, but I went and got my my degree or my certifications and first job was in the hospital and 12 hour shift after 12 hour shift after 12 hour shift, I finally just felt like there was just nothing left for me to give.
00:12:11:08 - 00:12:26:17
April Anthony
And so I left the hospital. I went to the nursing home and I felt like that was just worse. And and now I'm sort of here in home health care, and I'm kind of hoping it won't be awful. And I remember thinking to my then 25 year old self, okay, I don't know if I could be any good at this, but surely I could be not awful.
00:12:26:17 - 00:12:45:00
April Anthony
What if I could create a work environment that was not awful? What if I could create one that was good? What if I could create one that was great? What if I could become the best place to work in health care? Gosh, if I could do that. I think I've watched these people for the last few weeks. Every day they just give and give and give of themselves.
00:12:45:00 - 00:13:20:10
April Anthony
If I can create an environment that or back into them and and kept them feeling renewed and replenished and they'll go out every day and give of themselves. And I think we'll do some pretty amazing things from a care perspective and people will take notice. And so really those two weeks not only gave me a passion for our patients and for what we were able to do for them, but I think for me, even more so, it gave me a passion for how do we take care of the caregivers, how do we make sure that we're the kind of company that really creates something distinctive and a place that's unique, that lets those people really
00:13:20:10 - 00:13:43:04
April Anthony
live up to the calling that they felt in the first place that caused them to enter the health care field. And so that's that's sort of the foundation upon which the last 31 years of my time in health care has been built is around this idea of being the best place to work and how can I create that so that we can be not only the best place to work, but in turn the company to receive the best care from.
00:13:43:04 - 00:13:49:10
April Anthony
And so that's really kind of the underpinning strategy of everything that I've tried to do in my career.
00:13:50:06 - 00:14:10:10
Todd Sullivan
That's fantastic. I mean, you let the secret sauce out right at the beginning here, and it's an account and a 25 year old account and was able to figure this out in two week ride alongs to change health care. Right. It's that is it's it's very admirable. And I'm wondering why that perspective was not so obvious before. But that's fantastic.
00:14:10:19 - 00:14:23:21
Todd Sullivan
So, April, you build this company now to a point where you're still very young and you go to sell the business. Can you talk to me about the growth and then that maybe opportunities to sell? How did that land on you?
00:14:24:04 - 00:14:40:03
April Anthony
Yeah, you met you may have heard the phrase accidental entrepreneur or that that certainly sort of falls into my my realm. I didn't really make a grand plan for this business and just sort of fell in my lap and and sort of the same is true of the first exit. It wasn't like I said, okay, well, now I've built this up.
00:14:40:03 - 00:15:07:10
April Anthony
We were, you know, about $35 million in revenue. I support the business in 92 and 1996 comes along. We're renovating at about $35 million revenue, still a cost reimbursed business. So really no profits there. We were able to cover expenses and pay ourselves salary and those things, but there was no profitability and boomerang and it was somebody who said, hey, we understand that you operate a business that operates below the Medicare cost caps.
00:15:07:10 - 00:15:34:15
April Anthony
And in those days, in the in the mid-nineties, kind of the philosophy of home health care was spend every available dollar, like if they give you a maximum cap of a dollar, spend $0.99. But I was an accountant by training and I had started this business where we were digging out of a deep hole. And so my first year in the business was spent trying to figure out how I could operate on $0.50 so that I could dig out of the 50 cent hole we had started in and get back to the dollar by the end of the year.
00:15:34:15 - 00:15:54:15
April Anthony
And so I had always kind of come up with a an efficient operating model because I had to out of necessity. But when we got to the next cost reporting year and kind of had a fresh start, I was still struggling with, well, I don't want to just spend money to spend it. I mean, if our people are happy or patients are happy or care is of high quality, I'm not going to just waste money simply because I can.
00:15:54:22 - 00:16:12:20
April Anthony
I'm going to try to do the right thing. And so I always operated about 25% below the cost cap. So sure enough, this company calls and they said, hey, we've we've sort of heard in the marketplace that this is the way you operate and we'd like to buy your business and we'll pay you a5x multiple on that cushion.
00:16:13:16 - 00:16:36:09
April Anthony
Well, our cushion at the time was about $8 million below the cost cap. So it was $40 million. I wasn't even 30 years old yet. And so I didn't ask questions. I just jumped at that opportunity. And as it turned out, that was a poor decision. You know, you never can never can second guess necessarily a transaction you were happy with on the day that you did it.
00:16:36:09 - 00:16:58:04
April Anthony
But it didn't take too many days after the transaction to realize I probably had not picked to the right partners. I hadn't asked nearly enough questions as Fortune would have it. About 11 months later, I had stayed on in a in a role as regional vice president. About 11 months later, I actually got terminated from that position because we were really not seeing eye to eye on the way to operate the business.
00:16:58:04 - 00:17:19:21
April Anthony
And so I was sort of in this fog thinking, okay, I've found this thing that I love. I've built this business that was really successful. We had a great reputation. We were growing rapidly and now here I am on the outside looking in. As is often the case with transactions like that, I had a non-compete and so I was sort of sitting in an idle place trying to figure out exactly where to go.
00:17:20:06 - 00:17:37:17
April Anthony
And it wasn't too long into that I learned to hold the the OIG and the FBI ended up raiding that company and came in and really the company ended up being caught doing some things that were inappropriate, which was frankly, why I got fired in the first place, is I wouldn't do some of the things they were asking us to do.
00:17:38:02 - 00:17:54:19
April Anthony
And and it turned out what I thought was maybe the darkest day of my career, the day that I got fired turned out to be the happiest day of my career because it was about seven months later when all of this went down and I was long gone and and didn't have any part of any of that. So I never got dragged into all of those conversations.
00:17:54:19 - 00:18:15:19
April Anthony
So, you know, that gave me the opportunity, though, when that happened, the company filed bankruptcy and they closed down their entire Texas operations. And when they did, all of my non-compete immediately went away because they were no longer operating in Texas. And that gave me the opportunity to go start my next home care business, which I did about 45 days after their bankruptcy filing.
00:18:15:19 - 00:18:42:05
April Anthony
I was able to things back in the home health care space and began here in Dallas with a single location. And ultimately that business grew over the next 20 plus years into an organization, Encompass Home Health and Hospice, that, by the time I left was about 1.2 billion in revenue and had 325 locations spread around 31 states serving home health and hospice patients to the tune of about 50,000 patients per day.
00:18:42:16 - 00:18:47:09
April Anthony
So a pretty amazing journey that got started on that rebound from that first transaction.
00:18:48:00 - 00:19:09:02
Todd Sullivan
April, thank you for sharing all of that. So I'd love to go back for a second because, you know, when you talk about how they valued your company, which was pretty clear, right, you had that $8 million cushion, which if you had maxed out your ability to charge for your service. Right. That you could have said a million of profitability or something close to that.
00:19:09:11 - 00:19:29:21
Todd Sullivan
And so they're saying, okay, it's five times that. But that to most entrepreneurs would say, wow, this is the win of my lifetime. Was it not structured properly where, you know, it was more earnout related and then you get fired? I would have thought you'd have a structure that made you very comfortable financially. Was that the case?
00:19:30:04 - 00:19:49:06
April Anthony
The transaction was I was half and half, half equity and half cash up front. So I got 20 of that in cash. But from that I had to pay taxes and all of the rest. And then I had 20 million be in stock in the company and that stock turned into nothing. It turned into into being worth nothing at the end.
00:19:49:06 - 00:20:12:17
April Anthony
And so, you know, the transaction certainly it was still even at the $20 million valuation, but that was the cash portion. It was still a big transaction. Certainly, again, I wasn't 30 years old yet, so it was still a big number, but it wasn't quite the number that we had initially anticipated. You know, and for me, though, you know, I think I had my two children at that point in time.
00:20:12:17 - 00:20:30:10
April Anthony
I now had three that I had had my two children during the time from the first acquisition to the first sale. You know, and I think for me, it was just more than that. I mean, I've been so fortunate and so blessed to make, you know, a lot of money over the course of my careers. But but I've never done it to make money.
00:20:30:10 - 00:20:54:13
April Anthony
I've always done it because I love it. And I think for me, when the opportunity to get back into it, it really wasn't a, gosh, I made a lot of money. I don't have to do this anymore. It was the opportunity to take those proceeds and reengage in something that I was passionate about, that I love doing. And I think so much of the success that I can look back on came from doing things for the right reason, not not just for the economic returns.
00:20:54:13 - 00:21:05:01
April Anthony
Now, don't don't mishear me. I love the economic returns. I'm not saying I don't, but they're not the sole reason that I enter into those transactions or make those decisions.
00:21:05:13 - 00:21:25:07
Todd Sullivan
I yeah, I absolutely hear you right. You built something very special from the ashes and there's some legacy behind that. And now, you know, it's gone, right? You handed it over to the wrong people. So, you know, financially, you didn't hit the what you deserved and then the legacy is gone. So you're kind of picking up the pieces.
00:21:25:07 - 00:21:50:09
Todd Sullivan
I absolutely understand that. But in that transaction, is there any advice that you would give? Right. I wasn't there as that was being negotiated, but one of the things that we really try to impress upon our founders is you're doing due diligence on a buyer as much as they are doing due diligence on you. Is that something that you wished you'd dug more into, or really was there kind of character hidden and you weren't going to discover?
00:21:51:00 - 00:22:21:12
April Anthony
Well, I think I definitely could have discovered it had I had more experience, had I had better advisors or any advisors for that matter, or and had done my homework more, I think I was I was so young and so green and so inexperienced that I sort of took everything at face value. And I think it is absolutely true when you're selling a business and you have to be as discerning about the buyer as they are being about you, particularly if it's a business where you feel like you've got this connection.
00:22:21:12 - 00:22:42:05
April Anthony
I mean, all of us know person builds their business alone, they build it, the team around them, the people who work alongside them, who sacrifice to give, who look for ways to make it better than it could be. None of us can do it alone. And so to me, every time I've ever sold a business, I've wanted to feel like I've made a good choice about who I sold it to.
00:22:42:05 - 00:23:05:00
April Anthony
And I think that first go around, I was I was young and naive and inexperienced and didn't know what I was doing. But in my subsequent transactions, you only have to burn me once for me to learn that that fire is hot. And so it created this foundation that then gave me the opportunity in subsequent transactions to make sure we felt like we were doing our best to take care of our people.
00:23:05:19 - 00:23:15:20
April Anthony
That's great. So it's never the entrepreneurs rarely ever working alone. It's it's almost always a team around you that's helping you get the job done and helping you build the business.
00:23:17:05 - 00:23:42:12
Todd Sullivan
So great points. I think what I would like to share is that when you have the right advisors, the advisors that really know the buyers from your industry, they know the history of these buyers, right? So they know what you're getting into and I think a lot of times we've sold a business where a founder has said to us, you know, not only do I want the right buyer, I want my name to still be on the building, there cannot be a change in the brand.
00:23:42:12 - 00:24:05:04
Todd Sullivan
Legacy is so important to me. And so the right advisors know which buyers are going to adhere to that. They know which buyers are going to try to change the price at the last minute and they won't allow those buyers in or they will take those buyers less seriously. So we really recommend getting the best possible investment bankers on your team who really know the buyers and have transacted with them before to avoid those kind of situations.
00:24:05:16 - 00:24:26:09
Todd Sullivan
I really do want to get into like the big kind of Grand Slams that you're hitting, but a lot of structures are equity based, right? So you got 50% up front, 50% is rolled in equity. So you really are betting on this team and that it must have been a terrible feeling when they tossed you out after 11 months.
00:24:26:09 - 00:24:38:20
Todd Sullivan
In hindsight, very lucky, personally and professionally, but not necessarily financially. Any recommendations there when you're thinking about investing your earned money back into a company?
00:24:39:12 - 00:25:03:16
April Anthony
Yeah, you know, I've had a lot of success taking multiple bites at the apple, and so I love reinvesting. I think it's it's a great way to create to take some risk off the table, to create lifestyle opportunities and opportunities, philanthropy and other things that are of interest to you through interim transactions. But I also love continuing to bet on myself.
00:25:03:16 - 00:25:23:17
April Anthony
And so when you do find those right partners and you really have to understand kind of what you're getting into, and in my case, you know, more times than not, the transactions that I ended up doing were with private equity partners where I was still going to really have control over the business in the day to day operations of the business.
00:25:23:17 - 00:26:01:12
April Anthony
They certainly had voting controls over the exit decisions and the and the financing decisions in many cases. But I wasn't going to have to fight about what the business was going to be about, or at least didn't anticipate that I would. And I think that if you want to rollover equity, that's a really great structure. When you roll over equity into a strategic entity where you're just going to become a smaller part of something, I think no matter, no matter what is said, no matter what the intent at the time is, I just think it's virtually impossible not to ultimately find yourself swallowed up by that bigger entity.
00:26:01:12 - 00:26:22:09
April Anthony
And so I think as a seller, you have to know when you choose a strategic buyer as the next step in your journey, they ultimately, no matter what they say, you were likely giving up potentially everything about what really matters to you about that business and you've got to be okay with that. And if you're not, my advice to you would be choose private equity.
00:26:22:14 - 00:26:40:08
April Anthony
You know, choose somebody where at least you're going to continue to be the leader of that business where at least you're going to have the opportunity to speak into it. As long as you can perform, there's no guarantee you get to stay if you can't perform. But if you can continue to perform, you're going to get to continue to be the leader of that business and and drive it and direct it the way that you want to.
00:26:40:08 - 00:27:00:18
April Anthony
So I think it's really important when you're rolling over equity to a strategic buyer, it's almost impossible to know enough about that buyer to fully understand the implications on the other side. So you got to really get yourself to a place mentally to feel like, you know, even if it doesn't go anything like they say, I'm going to be okay with this.
00:27:01:01 - 00:27:19:17
April Anthony
Yes, you got to get to know with that money, you're at that point you're playing with house money. Yep. And if it doesn't play out, you've kind of made the decision that you're okay with that. Obviously, you try to make great decisions, try to assume what might happen. But in my mind, I always sort of write it off as house money at that point in time.
00:27:19:17 - 00:27:24:14
April Anthony
And if I walk away, I still walked away with a good return on my initial investment.
00:27:25:04 - 00:27:44:15
Todd Sullivan
That's that's perfect advice of that as well. Right. If if you're not in full control of the levers of the growth and direction of the company, operationally, everything that is being kind of dangled in front of you, you need to consider as, as you say, house money and you need to be comfortable with the upfront piece as the only thing that you may see, right.
00:27:44:16 - 00:28:11:06
Todd Sullivan
Because you look, you lose control, you're no longer betting on yourself. And there's so many different personalities and inner workings going on that you have no idea about. So I love that. I love that advice. So you're building this business initially via acquisition, right? As opposed to organically where your business is growing itself. You're going out and buying companies because you're seeing this this opportunity to pick them up for pennies on the dollar, which is fantastic, right?
00:28:11:06 - 00:28:32:18
Todd Sullivan
I think that leads back to your accounting background really being able to understand financial statements, being able to relate to people and create a kind of win win situation. So you're getting a certain size by doing that. The economy turns and now you're saying, okay, we're going back to organic growth, we're going to grow the base of this business, which is fantastic.
00:28:33:02 - 00:28:39:10
Todd Sullivan
Then you're saying, okay, there is opportunities to leverage technology. Can you talk to me about that?
00:28:39:14 - 00:28:58:01
April Anthony
Yeah, So exactly. So sort of 98 to 2000 where we're building the business through acquisitions, but at a really low multiple and really effective cost, not having to put much capital back in. And then finally prices begin to sort of go back up and and I think, okay, well, we'll refocus our effort on organic growth, which is a more cost effective way to grow.
00:28:58:06 - 00:29:14:16
April Anthony
And things are going pretty good on that front. And so all of a sudden, I sort of decided to take a little bit of a detour. I decided that as we moved into this sort of new period, sort of 2000 was a big kind of a transformational period in the way Medicare reimbursed home health agencies. And so there was this new opportunity.
00:29:14:16 - 00:29:40:00
April Anthony
We weren't going to be cost reimbursed anymore. We're actually going to have the ability to make a profit. And so being being somebody who's really process oriented, I immediately went to, okay, we need been better, more effective technology to help us manage this business more effectively. I think at the time we maybe had ten locations spread around Texas and I was seeing even with just ten locations, how hard it was to keep everybody on the same, you know, same methods, same approach to doing things.
00:29:40:00 - 00:30:05:07
April Anthony
So I go out and I start looking for technology solutions and I kind of walk away from the exhaustive search feeling like there really aren't any good solutions out there. That because the industry for so long had been built on this idea of cost reimbursement, efficiency had just never really been the mindset of a home health operator. But that was very much my mindset for this future period as well as sort of how I had gotten to the place I'd gotten to begin with.
00:30:05:07 - 00:30:28:19
April Anthony
And so I thought, okay, well, I'm going to have to build this. Well, I knew about as much about technology as I knew about home health when I got into the business, but I knew what I wanted. I knew what I thought we needed. And I was super fortunate because early on I found a technology partner who could come in and take my yellow pads and my scratchings of what I thought it needed to do and turn it into solutions.
00:30:29:04 - 00:30:49:07
April Anthony
And so we began in the fall of 1999, building this technology solution that was going to be the electronic medical record system and really the enterprise management solution for our whole organization. And by the time we got to about 2001, we had spent my whole budget that I had sort of set aside. I thought, okay, I can do this for a million and a half dollars.
00:30:49:07 - 00:31:03:20
April Anthony
Well, I had spent about two and a half million dollars in the first 18 months, and there was no light at the end of the tunnel that that spending was going to decrease. As a matter of fact, every time you did one thing, you're like, Oh, that's cool. Can we make it do this also? Well, that's cool, but we make it do this also.
00:31:03:20 - 00:31:21:17
April Anthony
And if you've ever been in technology development, you, you know, it's kind of like a Chinese buffet. There's an endless opportunity of things that you can make it do or that you want it to do. And so I thought, okay, this is a bad idea. I'm finally in the home health space. And in an era when I'm going to be able to make a profit in home health care.
00:31:21:17 - 00:31:49:17
April Anthony
But now I'm taking all of my profits and I'm pouring them down this technology hole. This seems like a bad outcome. And so 2001, I decided I would spend the technology division out of the operating company, and then I would start trying to build technology not only for ourselves but for the industry at large. And so I began a company called Home Care Home Base at the same time that we were building and growing and campus began home care home base in the fall of 2001.
00:31:50:01 - 00:32:16:12
April Anthony
And and as as it would turn out, I ended up putting every dollar that I had made from that first transaction back in mostly to the technology company. Wow. I remember in 2006, my husband said, At what point do we get to stop putting good money after bad? Because you have now taken all of the financial stability we had created and poured it into this technology solution.
00:32:16:12 - 00:32:36:19
April Anthony
When do we get to stop? And I said, Well, all I can tell you is that if we stop now, we will have absolutely lost everything. But if we keep going, there's a chance that we'll turn the corner. And as you can already tell, Mark's a pretty trusting guy. He let me stumble into this home care business with no knowledge, and he just kind of kept nodding his head.
00:32:36:19 - 00:32:57:07
April Anthony
I think we remortgaged our home that we had paid off and took the proceeds and put him down this this endless tunnel of technology spending. But as Fortune would have it, we were able to turn the corner in about 2007, sort of the first year that we actually broke. Even So, after six years of trudging along, making money, losing I mean, losing money for money.
00:32:57:13 - 00:33:19:11
April Anthony
And finally 2007 comes along. And for the first year we're cash flow positive. And then from 2007 on, the company just rocketed from a growth and profitability perspective. By the time we got to 2011, we brought in our first set of private equity investors. When I began the building, I had I had written a number on a piece of paper.
00:33:19:11 - 00:33:42:07
April Anthony
If I could make it worth $60 million, I was going to be happy. And in 2011, the business was valued at $150 million. From an enterprise value perspective, we sold 40% of it in 2011 to a private equity partner, and by 2013 the business had grown to be worth $625 million in two and a half, not even quite two and a half years later.
00:33:42:13 - 00:34:14:11
April Anthony
And so it was just an incredible run. So sold another chunk of the business, another 40% of the business in 2013, that $625,000,000,000 million valuation. And then ultimately that remaining 20% we sold down in a multiplicity of chunks between 2016 and 2020. Last last sale was actually December of 2019. And I think the final valuation for our last chunk in 2019 was $2.1 billion of enterprise value.
00:34:14:11 - 00:34:39:19
April Anthony
So the business, you know, took off, really became the industry standard for the home health and hospice industry. And we had all of our biggest competitors from our operating business were our biggest customers for our technology business. So Really an interesting sort of set of circumstances, but it kind of gets back to that. As entrepreneurs, I feel like, you know, you either really believe in what you're doing or you don't.
00:34:40:05 - 00:35:00:19
April Anthony
And sometimes, you know, people have asked me before like, well, you don't really have any like failures, like all these businesses that you started actually, you know, ended up being successful. And I said, well, the only reason they weren't failures is because I refuse to stop, because there are times where each one of them probably a wiser person would have said, This is silly, quit doing this.
00:35:00:19 - 00:35:18:16
April Anthony
Stop pouring this good money after bad. But something within me, just the competitive gene or whatever it is, just kept saying No, I believe that. I believe it's going to turn. I believe it's going to turn. And, you know, thankfully for me, that that proved to be the truth. But, you know, I think think the only way you guarantee failure is to stop trying.
00:35:19:02 - 00:35:33:20
April Anthony
And so for me, I was able just to kind of defy the odds and outlast the losses and find my way to profitability eventually over time. And that's the success of home care. Home base is outlasting losses.
00:35:35:04 - 00:36:11:13
Todd Sullivan
April, there is so much there. But, you know, I'll tell this little story. I was just having a meal with Mike Vanderjagt and he is the most accurate kicker in the NFL in NFL history. And he was telling a similar story. And there's so many parallels for sports and business. And I think he had said that was cut by 12 teams before he even got to the NFL and he just refused to stop and just kept getting better and learning and honing his his trade to the point where he became the best ever.
00:36:11:21 - 00:36:43:22
Todd Sullivan
Right. And you hear that story in business over and over and over. And it's it's that persistence that entrepreneurs have that may be slightly irrational, but they many of them will attribute that to their success. So thank you for sharing that. I want to step back because I think the opportunity for you to sell 40% of the business to a private equity firm, so you have 60% of your equity is still in the business and they are likely injecting cash into the business for growth.
00:36:43:22 - 00:36:57:23
Todd Sullivan
They want to see growth. Right. And their plan is how do we have a three or four X on our investment? Can you describe it like that, that particular partner? What that structure look like and what made you to make that decision?
00:36:58:15 - 00:37:17:21
April Anthony
Yes. So for us, actually, we were we had gotten to a pretty healthy place from a cash flow perspective. We were still making significant in the technology that we were now making them out of free cash flow instead of out of added new capital. And so really, when we did the 40% transaction in 2011, it was a take risk off the table for us.
00:37:17:21 - 00:37:51:02
April Anthony
And so it was literally buying 40% of our interest and letting us diversify our personal portfolio away from having so much risk. And so the company itself didn't really need more capital at that point. It was we were refueling and refunding the need for ongoing development through free cash flow. So we took that money off the table, that 40% money, and we were able to use that to really kind of be the I would say that was kind of the first of really the big transactions where all of a sudden we created significant liquidity.
00:37:51:02 - 00:38:11:18
April Anthony
We'd had a couple other smaller liquidity transactions along the way and the operating business from the 1998 Act or startup of that business. But this was kind of the first really big deal that we were able to close and that that changed the way our family lived. It changed the level of financial flexibility we had. It changed the way we supported charities that we love.
00:38:11:18 - 00:38:20:08
April Anthony
It just became it was kind of the beginning of a whole new cycle of of wealth in our family and how we would distribute that differently among the things we cared about.
00:38:20:20 - 00:38:44:06
Todd Sullivan
Oh, that's great. Okay, so you're really derisking personally. The other holders in the business are getting that opportunity to maybe breathe a little bit better and do the things that they really want to do. And I think it ties into, you know, when is the right time, personally and professionally to take your chips off the table. In many cases for us, people come to us, should I raise money or should I sell?
00:38:44:13 - 00:39:01:01
Todd Sullivan
And that's not a binary decision, right? In your case, you were able to sell 40% of the business and achieve the liquidity that you needed. So that's great. So you found a partner that saw the future, let you hold the reins, and we're going to bet on April to deliver this this return. Right?
00:39:01:09 - 00:39:01:17
April Anthony
Right.
00:39:02:05 - 00:39:03:03
Todd Sullivan
That's fantastic.
00:39:03:14 - 00:39:19:14
April Anthony
I think I tell young entrepreneurs I have an opportunity to visit with them and get connected to them through a variety of different ways. But, you know, I always say if, if, if you want to sell because you're you're burned out, you're tired, you just don't believe really in what you're doing. Your heart's just not in it anymore.
00:39:20:11 - 00:39:43:06
April Anthony
Then sell and take your chips and go home. If you want to sell because you want to create a lifestyle, then ask yourself what's the lowest amount that I can sell to get to the lifestyle that I want? Because it's if it's just I want something now, you know, what is that something that you want and what's the least you can do to get there?
00:39:43:06 - 00:40:03:03
April Anthony
Because if you still believe in your companies, you're still all in at working hard and delivering on what you've started as an entrepreneur, then wait as long as you possibly can to sort of sell that bigger chunk. I was talking to a young entrepreneur the other day and I said, I think the question really comes down to do you want a lake house?
00:40:03:03 - 00:40:24:14
April Anthony
Or do you want generational wealth? Because that's kind of your decision. If you choose to pull the plug right now, you can go build a really great lake house and you can have some creature comforts in life and you can create some some stability and de-risk some things for your family. But if you want to create generational wealth for your family, don't do this transaction right now.
00:40:24:14 - 00:40:42:06
April Anthony
So it really comes down to what? And there's nothing wrong with either one of those answers. The question is just what do you want? What is it that you're looking for at this time and what matters most to you? And I think, you know, kind of the worst thing an entrepreneur can do is pull the trigger to sell their business too soon.
00:40:42:14 - 00:41:06:22
April Anthony
At the first sign of success, you run to sell your business. I think you got to ask yourself, if I'm going to sell my business, I'm going to do it at a good multiple. Yeah, I got to leave gas in the tank. I can't sell an empty tank, but how much gas am I even in the tank? And if I've done all this work to fill up this big hundred gallon tank, then maybe I want to stick around and use some of that to get to the next stage of growth.
00:41:07:09 - 00:41:26:03
April Anthony
And I still have to leave something even at that later stage for the next buyer to be successful with. But where's my heart in that? And I think there's so many things about Lynn that are just very personal and very subjective to what, you know, the seller wants and what they're looking for in their life at this point in time.
00:41:26:03 - 00:41:32:12
April Anthony
And it's hard to have a as you say, it's not a binary discussion. It's hard. There's a lot of factors that come into the conversation.
00:41:32:22 - 00:41:59:20
Todd Sullivan
A lot of factors. April, I really appreciate that advice. That was very, very clear. I think the thing that I would add, and it's through personal experience is that, you know, there comes a point where you love what you're doing, but your skill set is maybe not a match for the next level of growth. You have proven to have a skill set from beginning to multiple billion dollar valuations and that maybe that's not in every entrepreneur.
00:41:59:20 - 00:42:17:20
Todd Sullivan
So that's the one thing that I would add. We tend to say, you know, with our sports analogies that selling a business in the fourth inning after you put, you know, good runs on the board, you've got to lead. You've got the heart of the lineup coming up. That's the gas in the tank, right. And you are selling the vision of future cash flows.
00:42:18:11 - 00:42:41:16
Todd Sullivan
And now that you're seeing that, I'm rethinking well, you know, if you are that relief pitcher, that is unbelievable coming in in the seventh inning, you want to play to that point because you're playing your strengths and you love what you do. Then by all means, is there a way to take some chips off the table to derisk that future risk and stay in the game for, you know, to finish it out?
00:42:41:21 - 00:43:04:08
Todd Sullivan
And I wouldn't say quite finish it out because like you said, the buyers have to be buying something with gas in the tank. Yeah, it's a very personal tricky decision. I myself knew, right? I didn't believe I had the skill set to build to the to the billion dollar outcome. And so I tended to sell my businesses when I felt like the ROI for myself in every stakeholder was probably at its height.
00:43:04:21 - 00:43:08:06
Todd Sullivan
But again, very, very personal decision. So thanks. Thank you for sharing that.
00:43:08:14 - 00:43:27:02
April Anthony
And I think it just takes a ton of self-awareness to get there because, you know, it's hard when you've been when you've been a successful entrepreneur. Sometimes it's hard to look critically at yourself and say, do I really have what it takes? Because you you're like, Well, I got it here. You know, I did this. I think I can do that.
00:43:27:02 - 00:43:46:10
April Anthony
But it takes a lot of really soul searching, not only about what you want to do, what you're willing to do to get to that place. But really, what what do you have the capability to do? And I think frequently entrepreneurs, you know, drink a little too much of their own Kool-Aid sometimes and they fail to see their own weaknesses.
00:43:46:10 - 00:44:05:02
April Anthony
And so it's also, as you think about selling a business, you got to be really, really honest with yourself. You don't have to be, but you got to be really, really honest with yourself about do I really believe I can do this? And do I believe the market is in a position for me to be successful doing it with the dynamics that are out there?
00:44:05:02 - 00:44:30:05
April Anthony
Or do I need to pass this off to somebody that has deeper experience, deeper skills, just a more scalable model? Because that's that's the other thing. I think entrepreneurs so often don't build scalable models, like they're really good at this level, but they really won't work at two X at this level. And, you know, trying to figure out, you know, where am I in my ability to really evolve the model to address scale that's coming.
00:44:30:05 - 00:44:34:19
April Anthony
And so those are some of those self-awareness questions. You got to really dig deep on it.
00:44:34:19 - 00:45:02:05
Todd Sullivan
Yeah, I would agree that, like, maybe we all have a different level of of how introspective we can be. I found to be very introspective and maybe, you know, not not as confident in that next step. And I tend to surround myself with people that have been there, right. To be able to see what it really takes. And, you know, on the venture where we're building today, what I ended up doing is getting a partner who has built that billion dollar company before, right.
00:45:02:05 - 00:45:25:16
Todd Sullivan
So already been there to fill in. How do you create scalable operations? I mean, I love that conversation. Maybe it's for a different podcast, but could you answer one question as you've got the operating company right and private equity group that's come in and bought this 40% is is still allowing you to run a separate business while betting on your ability to grow the technology side of the house.
00:45:26:05 - 00:45:27:07
Todd Sullivan
How did how did that work.
00:45:27:19 - 00:45:47:12
April Anthony
Yeah so you know, kind of missing a few steps in the middle there but so the operating company started out in 1998 and brought in the first private equity partner there in 2004. Okay. So I had the tech I had the tech business. The buyer who came in in 2004 said no way too early way to early stage.
00:45:47:12 - 00:46:14:18
April Anthony
I don't want that. So I had a private equity investor from 2004 to 2007 in the operating business. Things went really well. Multi x return on their investment. They said it's time for us to flip out. Brought in a new investor in oh seven, a new private equity investor. They stayed the investor in the operating business until 2014 and it was actually them and it at the time they said, you know, in 2007 when they came in, again, we're not interested in this technology business.
00:46:14:18 - 00:46:37:01
April Anthony
It's just barely broken even on a cash flow basis for the first time in 2007. But by the time 2011 came along, they had not only seen what was happening in that tech business, but as one of the largest customers of the particular software we were building in the operating business, they saw the impact that it had. So they were the actually the ones who said in 2011, Hey, we'd like to now buy in to the tech business.
00:46:37:19 - 00:46:48:23
April Anthony
And so had the same partner there for a period from 2011 to 2013 in the tech business, same partner that I had on the operating side, kind of a different division, but at the same private equity firm.
00:46:49:16 - 00:47:12:08
Todd Sullivan
Oh, this is fantastic. All right. So I'll jump ahead to really where you went. You had multiple opportunities to take on more partners, get more liquidity, and you're essentially you're betting on yourself, right. You're keeping a little bit of equity as the business grows. Is there a culmination to all of this when you ultimately say, you know, it's time to time to sell it all?
00:47:12:18 - 00:47:36:08
April Anthony
Yeah, exactly. So let's take the operating business sort of as the first one. So 2014, the home health industry kind of went through a tough period, right, from a regulatory and reimbursement perspective from 2010 to 2013. And then there was a little bit of relieving in some of the rates in 2013 and the business began to really take off and grow again after having a couple of years of sort of flat earnings.
00:47:36:15 - 00:47:54:12
April Anthony
All of a sudden 2013 comes along, it takes off. We have a great 13 and 14 and our private equity partners who had been amazing because they had stayed with us for seven years, that doesn't happen very often in the private equity world, the last three of which, you know, from 10 to 13 had been a tough year.
00:47:54:21 - 00:48:13:22
April Anthony
And so often when you find a partner, you know, as soon as things kind of start to slow down, they won out. Our partners were great to say, hey, we still believe in you. We still believe the industry. We still believe in the business. This is just a cycle will outlast it. And in fact, they did. And so at December of 2014, they said, okay, now, now, now it's time.
00:48:13:22 - 00:48:35:17
April Anthony
It's been seven years. The business is back on the upswing. We think now's the time to get out. And so in 2014, again, sold the operating business, this time to a public company. So when we kind of looked at how much gas was left in the tank, we looked at my plans for the long haul. Seemed like that was that was the right decision in 2014.
00:48:35:17 - 00:48:59:03
April Anthony
So again, I rolled over. I kept 20% of the company. So even though I sold to a strategic buyer, I was playing on so much house money. By that time it seemed like, yeah, let's, let's try this. And we had a defined mechanism for how I could sell. I didn't own shares in the public company. I still own shares in just our division within the public company, which was I didn't want shares in the public company.
00:48:59:03 - 00:49:25:06
April Anthony
I'd been down that road before and so I was able to keep a minority equity interest in just my division of the business and then have a defined mechanism for how I would sell that down. And so I did that in December of 2014 and then sold it down in bytes starting in 2018. So the chunk in 18, 1920 and then sold my final final chunk in summer of 20, right, right before the pandemic started.
00:49:25:06 - 00:49:50:06
April Anthony
So yeah, so had that opportunity. And then as I mentioned earlier, we we had the same private equity investor come in in 2011 in the tech business, and we sold all of their interest. Plus I sold another 40 down, sold mine down to 20%, as well as the tech business, and became partners with Hearst Corporation. Not technically a strategic buyer, not technically a private equity firm, really a conglomerate of companies.
00:49:50:15 - 00:50:15:10
April Anthony
So it was kind of the best of both worlds because it gave us a long term future home, but it did so in such a way that really let us still be run as a as an individual portfolio company. And so did that in 2016. I stayed on as CEO until December of 19 and then still remain as chairman of the board today, even though I've now sold down all of my my equity in that business as well.
00:50:16:10 - 00:50:26:04
April Anthony
So it's been a fun ride. And like I say, when you talk about taking multiple bites out of the apple, I, I think I'm a winner at this. I've been able to figure out how to do that multiple times.
00:50:26:13 - 00:50:50:10
Todd Sullivan
It's a it's amazing, right? So I feel like you really learned from the first one, right, That didn't go in your favor. And and I don't know if it's you know, you chose the right partners or you surrounded yourself with the right advice or, you know, fool me once, right? You're never going to let that happen again. But, you know, what's what's your biggest takeaway?
00:50:50:10 - 00:51:04:01
Todd Sullivan
You clearly learned how to play this game incredibly well. And this this podcast is really about sharing that advice. And you've got, you know, just a plethora of it. What would you what are the big takeaway is that you would want to share?
00:51:04:19 - 00:51:27:06
April Anthony
Well, I think it kind of comes back to something I said earlier, which is I love making money. I love building businesses that are successful, that allow you to kind of create that generational wealth. But it's just never been the reason. And that's easy to say when you're in a situation like mine. But that's really the truth that I've never built a business to say, Oh, if I can do this by this date, I could sell it for that.
00:51:27:06 - 00:51:47:13
April Anthony
It's always just been, this is a business that I love and I really do feel like for me, you know, God just kept opening these doors. That didn't make sense, but bringing me into areas I didn't have experience exposing me to, things I didn't have specific knowledge of, but he just kept equipping me with these opportunities and then giving me these abilities to be successful with it.
00:51:47:13 - 00:52:05:15
April Anthony
And I think it's because I always loved it and I was always doing it for the right reason. And I am an accountant and I'm a I'm a girl who loves numbers and finances, so I definitely wanted to do it successfully financially along the way. But at the end wasn't to be financially successful. The end was to be exceptional at the business.
00:52:05:15 - 00:52:22:04
April Anthony
Whether that was the tech business or the service delivery business, it was if I could be successful and and really be exceptional at that, the financial thing was going to take care of itself. And so, you know, I think to entrepreneurs, I say, you know, sure, we all want to be profitable. We all want to have a successful exit.
00:52:22:04 - 00:52:43:22
April Anthony
But at the same time, the best way to get to that successful exit is to find the thing that you were so passionate about that it doesn't feel like work. And I think that was that was it for me, is finding that thing that just didn't feel like work. It felt like something that I love to wake up and do and the thing I love to go to bed still thinking about do it, could I do it better tomorrow?
00:52:43:22 - 00:52:53:03
April Anthony
So when you find that passion, then the reward of the financial success becomes a byproduct of how passionate you are about what you're doing.
00:52:53:19 - 00:53:24:06
Todd Sullivan
It is such a great lesson. And and I agree with you. It is it sounds when you hear it all, that's easy for that person to say, right? They have that kind of financial cushion. And so we tend to prioritize that as entrepreneurs. But I can also speak from experience. What we are doing today was just born out of passion of how to help our fellow founders because the exit liquid, those liquidity events, they're really black boxes that most people don't get to do that as many times as you have, right?
00:53:24:13 - 00:53:43:19
Todd Sullivan
So you've accumulated a lot of that knowledge and we certainly have through transaction after transaction, and we've just figured out a better way to do this. And helping founders giving back to founders is really like the central component of what drives us every single day. And to be able to say that it's exactly right, it's not work, right.
00:53:43:23 - 00:54:08:23
Todd Sullivan
We're just feel like we're giving back and helping. So very, very much resonates with me. I think the other lesson really from from day one for you is knowing your buyer. Right. So you I'm curious, like in these Nick, these subsequent transactions, you had one private equity firm that you knew really well. They knew you really well from previous experience until you allowed them into the technology side of the business.
00:54:09:04 - 00:54:17:03
Todd Sullivan
That one seems obvious, but, you know, getting in better initially, were you having really good advice or you're doing due diligence differently?
00:54:17:16 - 00:54:46:09
April Anthony
Yeah. So the first first transaction after the one that didn't go so well was 2004 when we brought private equity in to the operating business. So I mentioned, you know, we did some acquisitions that are really low. Multiple things were going great. Then we kind of leaned into organic growth. By the time 2004 came along, we had done a lot on the organic growth front, but we just needed to do more acquisitions if we were in a really grow and scale the business to the size we thought it could be and that we wanted to to make an impact at that bigger level.
00:54:46:15 - 00:55:07:20
April Anthony
And so we really at that point in time, we went out and started searching for a partner at that point who could bring not just an exit to us, but capital into the business to grow, which at that time it was more about putting capital in the business than it was taking capital out. And so we we did hire a banker at that point and we ran a process.
00:55:07:20 - 00:55:26:15
April Anthony
By then. I knew a lot more than I had known the first go around and in 1996. And so we were able to we were able to find that great partner, and we had an exceptional private equity partnership from 2004 to 2007. It was relatively short lived, not out of any failure, frankly, out of a lot of success.
00:55:27:00 - 00:55:48:12
April Anthony
We just created a really big return for them. And and when you have a smaller partner, it's hard not to capitalize on that return when it presents itself. So we had a great relationship. As a matter of fact, I still talk to that guy on a fairly regular basis. That was our lead partner there. So it was a great transaction, a win for everybody, and it just opened the door to the next relationship.
00:55:48:12 - 00:56:08:20
April Anthony
And you know, in 2007 when we did that, we were it was sort of a little bit unique at that point in time for one private equity company to buy from another private equity company. That didn't happen nearly as much back then as it does today. And so it was a little bit rare that we we knew we really liked the structure of that relationship.
00:56:08:20 - 00:56:29:05
April Anthony
We liked the autonomy that it gave us. We continued as a team to really believe in ourselves and that we had a lot more ability to continue to grow and expand the business than we had realized to date. And so it was to make that transition, transition from one private equity partner to the next. That turned out to be a great, great relationship.
00:56:29:21 - 00:56:35:08
Todd Sullivan
So before we go into our overtime questions, I love to hit on what what you're doing today.
00:56:35:21 - 00:57:02:00
April Anthony
Well, so I'm I've failed at one thing in my life, and that was retirement. So in 2021, I decided after having sold the last tranches of equity to the public company that we had sold the operating business to, that it was probably time for me to step away. I stayed for six years after we did that initial transaction and it was successful for all parties, but things were just starting to move in a different direction.
00:57:02:00 - 00:57:21:12
April Anthony
It just didn't feel like it was the right decision. I thought it was probably time to retire. I was 30 years in the industry and I thought that was where life would lead me. So I left there in June of 2021, spent a year playing golf and traveling and enjoying a little bit of downtime with our family. But I just kept feeling unfulfilled by that.
00:57:21:15 - 00:57:43:12
April Anthony
My my golf handicap got better things. Things were fun, but it just didn't bring that fulfillment that I wanted. And so in August of 2022, I came back. I had a I only had only a one year non-compete from that transaction. And so my non-compete ended in June. And in August I decided I was going to start another home health and hospice business.
00:57:43:12 - 00:58:12:12
April Anthony
So I came back into the industry and I'm building a company called Vital Caring Group. Right now we're up to 65 locations, runs across five states already, and about 200 a little over $200 million in revenue. So we're looking to build another billion dollar business and really excited to start over. So when I when I say it's not about the money, I think that's probably the best proof point because I could have stayed retired and invested in other people's businesses.
00:58:12:12 - 00:58:28:20
April Anthony
But I just love this one. I love what we do. I love it. I love the challenge of it. I love the opportunity to serve people. And so I am excited to be back at it and see what we can build, see if I can do, see if I can have a fourth success in the home health and hospice industry.
00:58:29:21 - 00:58:52:16
Todd Sullivan
April this so inspiration. All of this is just fantastic. Thank you. Let's let's jump into kind of the overtime questions. So you've had multiple exits and it really seems like your husband was the one you'd go and say, Can I go do this? And he was the encouraging one. So maybe it's pretty obvious, but who did you first call when you inked the first deal and then the second and the third?
00:58:52:23 - 00:58:55:14
Todd Sullivan
Was was that pretty consistent of who you were talking to?
00:58:56:05 - 00:59:13:07
April Anthony
Yeah. So Mark's been a great partner along the way. As a matter of fact, in 2006, when things were going kind of sideways in the technology business, we were pouring all this all this money down. I finally said, You know what I really need is a great salesperson to come help me sell more of this product in the marketplace.
00:59:13:14 - 00:59:38:22
April Anthony
Why don't you quit your job and come do that? And so in 2006, he left his job as an institutional equity stockbroker and had his own broker dealer firm, after spending a career at Dain Rauscher, started as an broker dealer firm in 2004 and then and then in 2006 ended up selling off his his part of the partnership and coming to work, leading the sales effort for the technology business.
00:59:38:22 - 01:00:01:22
April Anthony
So he was my my partner at home Care home base, literally day in and day out on that transaction and helped us really, you know, solidify our foundation as the leading technology solution for the home health and hospice market. He stayed working in that until 2015, a couple of years after the initial sell. The strategic buyer there and and he's better at retirement than I am.
01:00:01:22 - 01:00:13:14
April Anthony
He stuck with it. But we had we had a good run there together for about nine years, working together day in and day out, building that business.
01:00:14:03 - 01:00:28:20
Todd Sullivan
Oh, that's fantastic. Something for your kids to look back on. That was just kind of amazing. So. So how did you reward yourself each time any, like, special purchase or vacation? What did you do not only with family, but maybe employees as well?
01:00:29:01 - 01:01:01:00
April Anthony
Yeah, exactly. So, you know, on the on the personal front, we have a wonderful family, a daughter, 27, son 25, and a daughter 22 and 2007 was really sort of the first year that we had put together enough capital to kind of buy that getaway place. And we bought a little small condo in Cabo San Lucas that over the years turned into a bigger condo and then a house, and then kept growing as the successes grow but love to be together with our family, and especially now that they're all grown.
01:01:01:00 - 01:01:21:02
April Anthony
I found if you if you have homes in really great places, they'll continue to come to visit you no matter how old they are, they'll they'll show up. So we love that. We've got to get to spend some time in the winter in Cabo San Lucas. And we have a summer home up in Portland, Idaho, which is a long way from here, but a beautiful area and setting.
01:01:21:02 - 01:01:46:19
April Anthony
And so I feel like our family and our have sort of grown up in those places, and those are places that we love being together. So those are kind of our big purchases. But, you know, one of the biggest joys of entrepreneurship is being able to help your team members out. And so in each of our transactions, we were able to provide equity to our management team and create you, you know, in some cases generational wealth for their families.
01:01:47:03 - 01:02:07:13
April Anthony
And so that is just been such a joy to be able to have team members that you've been able to make sort of life changing impacts in their finances. So we've loved doing that. But but really, in addition to the the toys which tell folks all the time, the toys are great, don't get me wrong, I love fun toys as much as anybody, more than most probably, actually.
01:02:08:20 - 01:02:30:10
April Anthony
But what we've really loved is, is being really engaged in important philanthropy in areas that we really we really love. So for us are kind of our biggest single thing is our alma mater. My husband, I attended Abilene Christian University, and I've served there as a board of trustees member for 25 years now and have been the chairman of the board since 2018.
01:02:30:10 - 01:02:38:01
April Anthony
But that's a that's a place we into heavily and that we've loved sort of sharing our success back with our alma mater.
01:02:39:01 - 01:02:47:14
Todd Sullivan
That's great. All right. So final question, Is there one person that you would like to thank for all your kind of personal and professional success?
01:02:48:01 - 01:03:12:00
April Anthony
Yeah, You know, everybody kind of says their parents. Both my parents were small business owners. They they literally never had more than two or three employees apiece in their businesses. And for many years, I was one of those two or three employees. As I was in high school, I did the accounting for both of those small businesses because my dad was an accountant by training and he taught me debits and credits from a young age.
01:03:12:00 - 01:03:31:04
April Anthony
And so I was the summer accountant who would come on. But you know, what I learned from my parents was not so much how to run $1,000,000,000 business, but what I learned from them was this hard work and how important it was to be passionate about what you do to really lean in from an effort perspective. You don't have to be the smartest on the block.
01:03:31:04 - 01:03:55:20
April Anthony
You just need to outwork the kid who is. And that's kind of one of the philosophies that I've hopefully passed down to my children. And and then I just watch them care about things that mattered. And even even in the days when they were small business owners, even when things were tough economically, they never stopped supporting charities that they believed in supporting works that they thought were meaningful.
01:03:55:20 - 01:03:58:08
April Anthony
And so I think they deserve a lot of the credit.
01:03:59:07 - 01:04:18:09
Todd Sullivan
Oh, that's fantastic. April, thank you for doing this for me. All I can think of is what's the address in Cabo? So we can play golf together, buddy. But. But the lessons here are fantastic. I think we could go on for several more hours. Really inspirational story, and I appreciate you sharing it with all of us. Thank you.
01:04:19:11 - 01:04:41:14
Todd Sullivan
Thanks again for listening to the Cashing Out podcast. For more founder exit stories, please subscribe to the Cashing Out podcast on Apple, iTunes, Spotify, or wherever you listen to your favorite podcasts. And please remember exercise dot com and the Cashing Out podcast are for entertainment purposes only. This should not be relied upon as the basis for investment decisions.