Rick Martinez is a military nurse who stumbled into the staffing business by accident and grew his company to 600 employees. Then, when he decided to sell his business, he took a surprisingly zen-like approach to negotiating the deal.
It typically takes a hard-nosed, sharp-elbowed entrepreneur to build a 600-employee company but Rick Martinez built a successful staffing business with no previous entrepreneurial experience. Years later, when he went to sell his company, he took a low-key approach to negotiating the sale. Rick’s story provides a welcome alternative to the often adversarial business of selling a company.
About Rick Martinez
Rick Martinez is an award-winning entrepreneur, nurse, veteran, speaker, and the founder of Project BINK. He brings a wealth of experience – and tremendous passion – for impacting lives. His early business success prompted San Antonio Business Journal to name him one of the city’s “40 Under 40.”
His first company, a medical services contracting company, would go on to become one of the US Small Business Administration’s Top 100 companies. Rick was awarded the prestigious Jefferson Award for public service, further embodying his spirit of giving back and serving others.
About Med Trust
- MedTrust is a staffing company that supplies the United States Government with registered nurses and physicians on a long-term contract basis.
- The nurses and physicians are fulltime employees of MedTrust, so the company is essentially a subcontractor to the federal government.
- Rick was 100% owner and sole shareholder of the company.
- During his time owning and running the company, Rick spent 18 months serving at Walter Reed Army Medical Center in Washington D.C.
- His patients at Walter Reed were amputees and traumatically brain-injured soldiers, navy men, and airmen.
- During this time, Rick realized he had another calling. He felt he could have a bigger impact with a company that was already serving the clientele.
Change in Value Proposition
- While Rick was away and was doing better with professional management, MedTrust grew exponentially.
- MedTrust had become a big company where the bottom line was the bottom line.
- The value proposition had changed and it was no longer where Rick had envisioned the company going.
- Rick found himself asking, “Was this the battle I had to choose? Do I realign my company with the values that we started with, or do I want to start fresh?
- When Rick decided to sell MedTrust, he started calling people he knew in the staffing business to put feelers out there and network.
- He wanted to find out which companies wanted to acquire, expand, or add a government portfolio to their private sector portfolio.
- Rick didn’t know to look for brokers, but he knew how to hustle, and he also read Built to Sell.
- The company that bought MedTrust consisted of private parties in the staffing business looking to add a growing book of federal business to their company.
- The negotiations were with the one group, and there was significant back-and-forth on price and terms.
- Rick’s personal philosophy was that he wanted to make the negotiation simple and have both parties walk away with what they wanted.
- The process started in 2011 and took two full years before closing. This was mainly due to Rick being the sole owner and the government staffing contracts were in his name.
- MedTrust had proven that as a company it could run without Rick (as it did when he was activated for 18 months).
- There was an upfront figure, plus an earn-out that was contingent upon contract performance.
- MedTrust had to continue to perform at a certain standard in order to hit the metrics, which is what triggered the earn-out.
- 75% of the earn-out was guaranteed and 25% was based on performance.
- Contracts with the federal government are typically about 5 years, which was one of the reasons there was stability in the earn-out.
- The MedTrust home office was in San Antonio, with 30-40 core admin staff.
- What made it easier during the sale was that Rick’s wife Lisa was staying on during the earn-out.
- MedTrust had 500 staff across the country. They were informed of the sale via email, which relayed the information that management had changed.
- There was no animosity amongst the staff, and the feeling was almost ‘one of our guys won.
Links to Resources Mentioned
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