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Fred Zirkle ‘To Help Them Structure The Deal, Help Make It Painless, Is Just A Tremendous Feeling.’

Only six years ago, Fred Zirkle decided to try his hand as a business broker. Today, he’s having a profound effect on the way the entire industry does business.

Zirkle is pulling and prodding his colleagues around the United States and the world into the technology age.

“It’s been a thrill to put technology together and do things that have never been done in this industry,” Zirkle said last week from the Spokane Valley offices of Zirkle & Co.

“When I speak to business brokers, I tell them this is the information age, and you really are an information broker,” Zirkle said. “If you aren’t using the Internet to do research, and you’re not using computers to store a database, you won’t be around at the end of the decade.”

Zirkle comes by his respect for the power of technology and the computer through long exposure. He is the son of Lewis G. Zirkle Sr., who founded Key Tronic. Fred Zirkle spent years involved in the company, including his own stint as president and CEO of the Spokane-based computer keyboard manufacturer.

After leaving Key Tronic in 1991, though, Zirkle looked for another business to get into. He decided he would enjoy assisting owners in the sale of their businesses.

His research showed him that investment bankers handled sales of corporations worth $50 million or more, and local real estate agents had the sale of gas stations and small restaurants well in hand.

“But there was a huge gap in what we call the mid-market, the market for companies between $1 million and $50 million in value,” Zirkle said. “And I wanted to provide a service to that market.”

Zirkle ran the company by himself for six months, before taking on Dennis Crumb as an associate. Since then, he said, the company has grown by about 60 percent in revenues each year. It brokered the sales of a dozen businesses in 1996. The company now employs 10.

Initially, Zirkle’s market included companies worth more than $100,000. After a couple of years, he raised the lower limit to $500,000, and has now raised the threshold to $1 million.

“It really hurt when we had to stop taking clients under a million,” Zirkle said, “because the issues are just as real for those owners, but with our limited resources, we had to become more focused.”

The company’s growth pace is stepping up. Zirkle will soon move to Salt Lake City for two years to oversee the establishment of a second office there. He says eventually both the Spokane and Salt Lake offices will have staffs of about 14, and he foresees branch offices in Seattle, Boise and Reno.

All of them would be connected by the power of the computer and the Internet - which is where he is guiding the entire mergers and acquisitions industry.

Zirkle has recently been invited onto the board of directors of the International Business Brokers Association and is chairman of the Mergers & Acquisitions Source, which is the group within the IBBA that focuses on mid-market deals.

Soon after he began his involvement with the IBBA, Zirkle began pushing the industry to take advantage of the Internet. And he began shaping BizQuest, Zirkle & Co.’s Internet presence.

“The IBBA thought doing something like BizQuest was a great idea,” said Yvonne T. Smith, BizQuest’s marketing manager. “But nobody understood the Internet, and they didn’t want to fund it. So Fred actually had the vision and bankrolled the operation.”

Through BizQuest, Zirkle & Co. sets up web sites for individual brokers around the world. But BizQuest is also building a huge data base of brokers, business sellers and business buyers which people in the mergers and acquisition business can draw on for an annual fee.

Zirkle, who found other brokers willing to help introduce him to the nuances of the business when he started, has also developed a training program for brokers. And a major part of that program includes applying technology to the business.

Meanwhile, Zirkle emphasizes that the most satisfying rewards of the business come through helping business owners through what can be one of the most traumatic periods of their lives - the sale of a company they have founded and nurtured over many years.

The buyers are typically large, sophisticated companies taking advantage of industry consolidations.

“These companies might be trading at 30 times their earnings, and they are offering to buy these smaller companies at four-to-six times earnings,” Zirkle said. “And the buyer does these deals all the time. But the seller has probably never sold the business before.

“So we kind of level the playing field.”

Zirkle said that after the deal is over, clients often contact him.

“They say it was a very critical period in their lives, in which they had to make critical decisions,” Zirkle said. “And to have helped them structure the deal, helped make it painless, where they don’t have to look back with regret, well, it’s just a tremendous feeling.”

, DataTimes ILLUSTRATION: Photo