Some business owners start a company with long-range plans in place. Others begin without a roadmap and instead let the company’s story unfold over time.
Jeff Spanbauer was in this second camp. Spanbauer, co-founder of the healthcare marketing firm Relevate Health, (formerly Healthcare Regional Marketing) didn’t begin his career intending to become a business owner of a healthcare marketing company. He never envisioned guiding a company through a worldwide pandemic, or how the pandemic would create serendipitous opportunity for him.
As Spanbauer navigated these twists and turns, Trelus helped him determine the best path for his goals and avoid costly mistakes. By the time he had seen Relevate Health through the height of Covid-19, Spanbauer had gained a deep appreciation for trusted and candid advisors who help business owners make the best choices—not just the easiest ones.
Entrepreneur at heart – looking for the right business
Spanbauer’s journey to business ownership, and his experience with pivoting to make the best of circumstances, started early. As a teen, he worked for his father’s rose growing business and began a college degree in horticulture. But when he observed that the rose production industry was heading overseas, he earned his MBA to open more opportunities for himself. Spanbauer landed first at Procter & Gamble, then moved on to Pfizer a few years later.
In 2007, when he was working in Pfizer’s marketing department, another pivot occurred. The company announced a major restructuring, eliminating the team Spanbauer was a part of and offering him the choice of a transfer to New York City or a separation package. He opted for the package, as did a coworker who had worked alongside him at both Procter & Gamble and Pfizer. Together, the two decided to take what they’d learned and go into business for themselves. Healthcare Regional Marketing (HRM) was born.
“When we started the company, we didn’t have the vision to know exactly how things were going to turn out,” Spanbauer remembers. “We simply thought we were going to create a company and offer this new service that healthcare marketers really needed: the ability to engage doctors through locally relevant, data-driven marketing. We knew from our experience that this type of marketing worked much better than what pharmaceutical marketers were doing at the time.”
Their approach to marketing healthcare brands and products was unique, in that it segmented geography based on local market drivers and deployed relevant marketing campaigns to healthcare professionals and patients in those geographies. The model better addressed the huge variances in patient populations and prescribing preferences across the country.
Spanbauer didn’t start the company with solid plans for the future. For more than a decade, he lived the day-to-day reality of a successful entrepreneur—finding clients, expanding, riding out revenue dips and coming back stronger. He learned valuable lessons about shepherding a business in an uncertain world.
But nothing could prepare him for the curveball that was 2020, or the choices he’d have to make about leading his company through a pandemic.
Opportunity amidst chaos
Spanbauer and his partner built the company on the belief that “healthcare is local.” When the Covid-19 pandemic grabbed headlines in 2020, Spanbauer recalls that it was like “local on steroids.” People and companies tracked coronavirus’ spread state by state, county by county, zip code by zip code, even hospital by hospital, trying to stay abreast of local precautions and health system overwhelm.
Spanbauer recognized this once-in-a-lifetime opportunity to capitalize on the hyper-local healthcare fixation and scale his business accordingly. At the same time, he acknowledged that the size of the task and the gravity of the moment were beyond his and his partner’s capacity to manage alone.
They needed an additional partner—one with more financial resources and, ideally, with experience in transformational growth. That meant bringing in capital, likely for a partial sale, as a platform company, which was something Spanbauer had not been focused on before the pandemic created opportunity.
Unsolicited offers and bad advice
Neither Spanbauer nor his partner knew much about the process of selling or partially selling a business. His partner was ready to retire, but Spanbauer wasn’t inclined to see a partial sale as the end of his involvement with the company.
“I really didn’t think about it as an ‘exit’ as much as bringing in a partner who had the capital, plus the experience of doing this before,” he says. It was important for Spanbauer to find the right partner, the right deal, and the right people. He realized that whoever he partnered with now would likely one day be his successors, responsible for perpetuating the caring, employee-centric company culture that he had worked hard to develop.
Spanbauer knew the company was valuable, as he’d already received unsolicited purchase offers. But he didn’t have enough experience to discern the good offers from the bad.
Rebecca Smith, Director of Exit Strategy at Trelus, sees this dilemma frequently among owners. “What we find is that unsolicited offers are the catalyst for a lot of owners to sell,” she says. “We see a lot of owners who are getting offers and they rarely have the background to evaluate them. The offers often aren’t fair and are very one-sided.”
Business owners in this situation are at risk of making decisions that are financially and personally costly, and may leave them with regrets.
“In the business world, it’s hard to get data to understand what your industry peers are selling for,” says Smith, which can lead business owners to accept a deal that doesn’t reflect the company’s actual market value. To complicate matters, much of the available info on selling a business is written by advisors who have a stake in business sales. In other words, they have an agenda, and their advice may be biased.
Spanbauer almost fell victim to a bad deal. He and his partner considered one unsolicited purchase offer so seriously that he hired an investment banker to analyze it and help negotiate if necessary. Fortunately for Spanbauer, the banker was a knowledgeable and fair man who warned him away from the deal, explaining that it wasn’t as advantageous as it appeared.
This solidified Spanbauer’s hunch that he needed an expert to help broker a fair deal.
A rigorous evaluation from Trelus
Around this time, contacts in the C12 network introduced Spanbauer to Trelus. He joined the Trelus platform to learn more about selling, and discovered a resource of unbiased advice that helped him evaluate his situation. Spanbauer was able to secure assistance in selecting advisors for future deals who had excellent credentials and shared his values. Spanbauer felt confident that Trelus had his best interest at heart and wasn’t just telling him things he wanted to hear.
Contacts within the Trelus network were able to help Spanbauer evaluate potential partners who understood the life sciences landscape, without Spanbauer himself having to be directly involved. This prevented him from “tipping off” the market that the company might be up for a capital investment or sale. Because of this, he obtained much more objective information about the true value of his business and the true nature of the partners he was considering.
Spanbauer felt that Trelus’ assistance brought a higher level of rigor to the process of selecting a partner than he, as a business owner, could have brought on his own. “When people start throwing [offers] in front of you, it’s just very easy to settle and rationalize into taking whatever’s easiest versus maybe going the extra couple of steps and doing what’s best,” he says. Trelus gave him the clarity and encouragement to take those extra steps.
Spanbauer made the determination to partner with a private equity firm that valued culture and had relevant experience in pharmaceutical marketing. The PE firm invested in the company buying a majority stake, with Spanbauer retaining ownership. The deal’s structure gave him the best of both worlds—the expertise of a private equity firm, and the opportunity to continue leading the company.
The company rebranded, becoming Relevate Health. Over the next 30 months, the company would grow from $18 million in revenue to nearly $70 million.
In the Fall of 2022, Spanbauer moved to Chairman of the Board and on-boarded a new CEO. This move allows him to enjoy his continued stewardship and strategy of the company, but without the demands of being a CEO. Spanbauer is pleased with the direction of his new role so far, and feels confident that the company is in the right hands for the next stage of growth. He has seen the benefit of having continuity between old leadership and new.
Picturing your exit? Trelus is on your side!
If you are on an exit journey from your business, or considering a partial exit, Trelus can help.
Trelus turns the daunting and complex process of exit preparation into an achievable, step-by-step process based on the best practices of fellow business owners.
By combining a guided digital roadmap, well-defined action steps, and carefully curated tools and resources, Trelus equips owners with everything they need to plan and prepare for their best possible exit. You don’t have to do this alone. Find your way to a happy exit. Contact Trelus today to get started.