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MIDDLE MARKET PERSPECTIVE :: RENNILLO DEPOSITION & DISCOVERY Perfect timing Rennillo Deposition & Discovery found the right buyer to make the right deal 6 Smart M&A :: VOLUME 1 ISSUE 3 Rennillo Deposition & Discovery personifies the definition of a well-run, family-owned business. Lou Rennillo, his wife, Irene, and his son, Nicholas, each brought unique assets to cultivate a business that would find, in less than a decade after its founding, national firms in the deposition and litigation support services industry “courting” the company. Even with the attention of industry buyers, the Rennillos stayed the course, intent to see the fruits of their labor. “The company had not reached its optimal size to sell, and I was still too young to cash out,” Lou says with a laugh. “And Nicholas wanted to gain more experience before reaching a point to consider taking over the business.” While that represents some of the considerations that are tangible, the intangibles made up the rest of the story. The Rennillo family enjoyed working together and took pleasure in watching the DISCOVERY & business grow and retain satisfied clients. Even more important, all three Rennillos needed each other in the business. It was DEPOSITION a few years later that Rennillo was courted again and the family decided to sell—when RENNILLO the timing and buyer were right. Lou and Nicholas Rennillo shared their COURTESY thoughts about growing and selling the family business: PHOTO
HOW DID RENNILLO DEPOSITION & DISCOVERY BEGIN OPERATIONS? Lou: As an active court reporter and former partner in a litigation services firm, I spent more than 20 years in the field building relationships with law firms and regulatory agencies. When the former partnership dissolved in 1998, I retained some of the client base from the business, which formed the origins of Rennillo Deposition & Discovery. My wife, Irene, left practicing law full-time to come on as a partner that same year. Our son, Nicholas, also joined the company in 1998 while he was completing his second year at the Cleveland-Marshall College of Law. He was always hard-working and grounded, willing to do whatever was needed. Nicholas came on as an employee and with a great deal of perseverance and sweat equity, later became a partner. WHAT WERE KEY CONTRIBUTORS TO THE COMPANY’S GROWTH? Lou: We each brought complementary skill sets, and the diversity of our professional and educational backgrounds contributed to Rennillo’s growth. I had been a court reporter my entire career, so when we started the business, I was out with the clients every day shaking hands and writing depositions. Irene’s career as a litigator offered a unique, end-user perspective which served as knowledge for the firm’s strong operational backbone, as well as the design of its services. Her penchant for strong protocols and procedures eliminated business or client confidentiality risks. Irene also handled all legal matters, making sure the attorneys followed the civil rules and procedures. Nicholas oversaw sales and marketing and was responsible for new business development, including managing several key client relationships. He was also instrumental in developing our technology platform. Nicholas: I was also in the field doing video depositions and shaking hands. Lou: My initial thought was that once Nicholas graduated from law school, he RENNILLO DEPOSITION & DISCOVERY :: MIDDLE MARKET PERSPECTIVE The company was back on a growth track where the potential of exploring a sale made sense. – Lou Rennillo Rennillo Deposition & Discovery would work for a reputable litigation house and bring business to the firm. Even though he chose not to practice law, some of the contacts that Nicholas made while attending law school went on to firms that eventually became our clients, which was a significant source of revenue for the firm. Lou: Rennillo expanded into multidistrict litigation in 2003. In 2005, we were selected as the dedicated court reporting firm for the Commercial Money Centers Leasing Litigation, one of the largest multi-district litigations ever in the Federal Northern District of Ohio. We completed 500 depositions over a two-year period, which was the largest case ever handled by a court reporting firm. We reinvested the cash flows from that case back into the company. Our use of industry-leading technology differentiated us in the marketplace. We stayed abreast of developments in the litigation markets on the East and West Coasts, which begin filtering to the Midwest typically after a period of about five years. Technological advancements brought increasing demand for videography in depositions and trial presentations. We attended seminars on technology and started bringing those offerings to Ohio before our competition. We opened an office in Columbus a few months before the transaction closed. The expansion represented a substantial commitment to the Ohio market. We already had a recurring base of referral work in Cleveland, so the new office expanded our footprint to the Columbus and Cincinnati markets. We grew our employee base more than four-fold by the time we sold the company in 2011. NEARLY ALL BUSINESSES WERE HIT BY THE RECENT ECONOMIC DOWNTOWN. HOW WAS YOUR COMPANY IMPACTED? DID IT AFFECT YOUR DECISION TO SELL? Lou: It was the first time during my years in the profession, so since 1965, that an economic downturn negatively impacted the court reporting industry. Typically when the economy softens, deposition and litigation work pick up. In this recent recession, it was the opposite. Everybody tightened their belts. We decided to be more proactive and hired our first salesperson. She was a former court reporter and owner of a court reporting firm, so she brought a number of business contacts which helped accelerate our growth. WITH SUCH A SUCCESSFUL MOVE, DID IT CREATE AN INTEREST THAT THE TIME MIGHT BE RIGHT TO SELL? Lou: The company was back on a growth track where the potential of exploring a sale made sense. It was about a year later in 2010 that the partners decided to see what the market had to offer. Nicholas: I knew Effram Kaplan at BGL; we went to grade school together and knew each other during our high school years. I’d kept in contact with Effram over the years, and initiated discussions when the prospect of selling became more concrete. Lou: We were impressed with the depth of experience of Effram and the BGL team and decided to hire BGL to represent the company in its sale. continued on page 8 VOLUME 1 ISSUE 3 :: Smart M&A 7
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