When Ross Butler enrolled in the course Entrepreneurship Through Acquisition (MGT671), he apparently misunderstood the final project’s requirements. Instead of choosing an industry and company to analyze and evaluate as a potential acquisition candidate, Butler actually acquired a business.
BPI Information Systems, based in Cleveland, Ohio, was established in 1976 and has served as a cornerstone of the I.T. industry in northeast Ohio for 40 years. BPI’s forte is the design, installation, support, and emergency repair of network solutions for business, healthcare, government, and education. Its mission is to provide the highest level of integration support and service in order to keep businesses functioning without lost productivity or downtime. As a technology solution provider, BPI specializes in network consulting, integration, and implementation services; managed I.T. services, like remote monitoring and data backup recovery; virtualized solutions; server, desktop, and storage solutions; technology hardware and software sales; and server, desktop, notebook, and printer onsite repair services. The $11 million company serves more than 300 customers in the greater Cleveland, Akron, and Canton area. “I am ecstatic. I haven’t even completed my MBA program, and I am already the CEO of a thriving business. I started at Yale with the hope of taking on an entrepreneurial project, and now, at 32, I am an entrepreneur. This is awesome, and I am thrilled. BPI is a wonderful business, and it is the right scale for me as a first-time, young CEO. The company has a deep history of growth and profitability, and I like the tech services space. The economic characteristics are compelling, and it’s a perfect fit,” said Butler.
Butler acquired BPI using a self-funded search structure. Once he identified BPI, he sourced debt and equity capital to finance the business acquisition, raising debt from Live Oak Bank by utilizing an SBA 7(a) loan and raising preferred equity with a 10% preferred return. Butler did not put any personal capital into the transaction, yet retained 75% of the business’s equity. “I am excited about the business and the capital structure. Live Oak has been a fantastic partner—they are dialed-in to small businesses and to self-funded searches in particular. They were with me every step of the way through to the deal closing, and I am grateful for their support. My equity investors are excited about their potential returns, and I am delighted that I retain so much of the equity and the economic upside. The entire search ecosystem is a truly powerful resource—banks, searchers, and investors are all very generous with their time and perspective, and I hope I can pay it forward. I am building a business for the long term, and my incentives are aligned with the preferred shareholders. This is an ideal situation to be in as a young entrepreneur.”
Before attending Yale, Butler founded a small real estate holdings company that focused on acquiring and managing mixed-use commercial and multifamily assets in the eastern U.S. He previously worked in the construction industry for 10 years as an account executive for Trane Technologies, where he focused on selling HVAC equipment to commercial and industrial clients in New York City. “I have some strong customer acquisition and sales skills, which will be a big help in growing and running BPI. I am looking forward to using all of my previous professional experiences and the academic training I received at Yale. What was so exciting about buying a business as a student was that I was using concepts I learned in the classroom in real-time. Daylian Cain’s negotiation tools were extremely useful to me – and they worked. The ETA course was a great foundation for my project and provided a step-by-step recipe to operationalize the acquisition of a small business,” said Butler.
When asked about his time at Yale, Butler explained, “Yale has given me so much. I entered the MBA program with a vague notion of where I wanted to go, but it all came together and crystallized at Yale. It’s been a fantastic experience. The faculty has been supportive and encouraging, and my fellow students have been an amazing resource and network that I have tapped into repeatedly. I encourage other students to explore the self-funded search model. It’s been a great experience, and Yale has been a terrific place to incubate my project. I will miss Yale, but I am very enthusiastic about moving on to my next chapter as a CEO and entrepreneur. Yale is about educating leaders for business and society—I am ready and on my way.”