Bobby Reifman - Lincoln International

0:09Welcome to Northstar's Private Equity Fast Pitch, and thank you for joining us on this journey into the high-stakes world of private equity, where bold ideas, big capital, and brilliant minds collide. In each episode, we sit down with the trailblazers shaping the industry. key leaders, CEOs, founding partners, and visionaries from top-tier private equity firms, influential limited partners, and investment banking powerhouses. These aren't just conversations. They're front-row seats into the strategies, insights, and personal stories from the thought leaders driving the deals that define markets and transform businesses.

0:57Whether you're a seasoned investor, an aspiring young professional, or just curious about the forces moving the global economy, you're in the right place. So get ready to dive into the fast-paced, high-impact world of private equity with your host, the podfather of private equity, Jeff Henningsen. Welcome to Private Equity Fast Pitch. Industrials may be one of the biggest beneficiaries of the AI revolution, and that's not something we would have been talking about a few years ago. My guest today is Bobby Reifman, Managing Director and Co-Head of Industrials at Lincoln International, and he operates at the center of many of the forces reshaping the industrial marketplace.

1:43AI and data centers are creating enormous demand for power, electrification, interconnects, cooling, and filtration. Reshoring is driving investment back into U.S. manufacturing, and aging infrastructure is creating significant opportunities across water, air filtration, and other industrial markets. Bobby has spent nearly two decades advising companies and private equity firms in these sectors. But what makes his perspective particularly interesting is that he started as a mechanical engineer. He understands how these businesses actually work, not just how they trade. During our discussion, we get into where capital is flowing, what's driving premium valuations, why some PE firms consistently win competitive processes, and a great distinction Bobby makes about buyers today.

2:32Resilience makes them want the business, but growth determines how much they'll pay for it. We also talk about his personal journey, the importance of intellectual curiosity, and one of my favorite lines from the episode, time is the currency of respect. This is a highly relevant conversation about where industrial investing is headed, where capital is flowing, and what Bobby has learned from nearly two decades advising buyers and sellers through changing markets. I know you're going to enjoy this conversation with Bobby Reifman. Now let's get it started. Bobby, I'm super excited to have you on the podcast today.

3:08We're going to talk about an area that is just absolutely on fire in the marketplace, and it feels like you're right at the tip of the spear of leading a lot of those investment opportunities and transactions. So if you would introduce yourself, give us a little background on Lincoln and the area that you run in your firm.

3:26Bobby Reifman: Yeah, great to be here, Jeff. Appreciate you having me. I'm Bobby Reifman, a managing director, and I co-head up our industrial group at Lincoln International. Lincoln, a global investment bank that's been around for 30 plus years. We just celebrated our 30th anniversary earlier this year, and I lead our industrial M &A practice at Lincoln. I joined the firm in 2008, so I've been with the firm for nearly 20 years now. I've worked in all areas. I joined the firm when it was much smaller than it is today, but today we've got over 1 ,500 employees globally in all the key geographies and covering all the different sectors, both from an industry perspective and a product perspective.

4:04Bobby Reifman: So great to be here. So let's dive into what are you seeing in the marketplace right now? What's hot on your desk? Yeah, it's a fun time to be an industrial banker. As you think about the last 10 to 15 years, the place everyone was running to was healthcare, it was tech, and industrials was continuing to chug along, but people always viewed it as a more cyclical, sleepier market. What's happened is AI has really shifted the industrial world a ton in a good way. As you think about the disruption that AI has created in M &A for tech businesses, for services businesses. It's been the opposite for industrial.

4:41Bobby Reifman: The worst thing is you think about M &A's uncertainty in terms of getting deals done. And so while tech bankers are spending half their day trying to have the discussions if AI is going to disrupt a certain business they're working on or a certain area, what that's caused is a ton of investment into the industrial world. And we've seen that in a lot of different ways. You also think about how AI has impacted certain sectors. You think about AI data centers and the power grid and everything that's around the kind of electrification of this world that goes directly to the areas of industrials that we love.

5:15Bobby Reifman: You couple on top of that resurgence in terms of onshoring, and it's created a huge boon here for the industrial world. And we've seen how busy we've been and the deals we've worked on really accelerate in 25 and 26. And we don't think there's going to be any slowdown here coming in 27. So it's been quite an exciting time on the industrial side. So why don't you give us a little bit of a deeper flavor in the subsectors and specific areas, because industrial is such a huge space. And like you said, I think the tariffs have driven a lot of onshore manufacturing. But I feel like a lot of your real activity right now, as you said, is in the AI data center world.

5:52What are the specific subsectors in those buckets that are really driving a lot of your momentum?

5:57Bobby Reifman: Yeah, I'll hit a couple of areas as you think about where we're seeing the most activity. and really couples to a few things that all kind of drive to those same themes. As you think about the energy side, you have two pieces. You've got infrastructure across the country that needs to continue to be upgraded and enhanced because of the more demand that exists out there for power. It's a fascinating thing as you look at 10 years ago, it was all about energy savings and everything, appliances you get, and everything you're looking at is how do you use less power. That's flipped on its head here in terms of the needs for power for everything that we have that's being electrified in this world.

6:29Bobby Reifman: with that has created, think of all the components that connect to it. I spend a lot of time in what I call the interconnect space. And you think about connectors, wire and cable assemblies, wire harnesses, all the stuff that's helping to facilitate the electrification. And so if you think about those sectors, very strong. Other areas, you think about water infiltration, other sector that I spend a lot of my time in has a lot of tailwinds to it. As you think about regulatory demands out there, we're always going to need cleaner air. We're always going to need cleaner water and things like COVID just further amplified people's view on that.

7:03Bobby Reifman: And what it's created is sectors that are attracting a ton of investment. And we've seen that directly related to the business we've worked on and the growth that we've had there. So it's been an exciting time. And I'm always careful because everyone loves talking about data centers. And obviously, there's been a ton of growth behind data centers. And I think there's different dynamics to it. There's the businesses that are serving the explosion of construction. We've seen businesses go from family-owned businesses going from three of EBITDA to 100 million of EBITDA overnight. And the questions become much more on the sustainability side, because the one thing that data centers has created is a new end market.

7:38Bobby Reifman: As you think about that pie chart when you're selling businesses of healthcare end markets and aerospace and defense, there's now a new sliver to that is the data center world. And whether that's a slowdown or not in terms of new construction, it's a whole new space that has the same demands for those industrial components. So it's been very exciting, all of the tangential impacts it's had to our other sectors. In the water world, I know that's an area that you do a lot of focus, as you just said. You have the high demands from the AI world, energy drilling world, and obviously human consumption world.

8:11What does that look like in the future? What is the area of opportunity and risk?

8:16Bobby Reifman: Yeah, I mean, there's a lot of different ways that water is being looked at. And obviously, I look at it from the manufacturing product side. There's the whole water service side. You've got infrastructure across the U.S. The water infrastructure in this country is well behind. And there's tons of upgrading needing. And there's a lot that needs to then go into it to service it and companies that come out of that. We sold a business earlier this year called Waterline, which does trenchless pipe rehab. As you think about all the aging pipes in this country, different ways to go and service them and fix them.

8:46Bobby Reifman: So there's that side of it in terms of the wastewater side. I've done a lot also crossover with our consumer guys. You think about water softening companies and filtration businesses on the water side. There is just an incredible number of applications as you think about water and just a lot more attention to it, ensuring that it's being treated the right way, that there's not going to be a slowdown there anytime soon in terms of attention to it. There's other areas, too, as you think about, obviously, the hot area everyone who reads the news is about water with data centers. I don't know exactly what it is, as people say, but I hear that the data centers are ruining our water.

9:17Bobby Reifman: And people don't know why, but it's the catchy phrases out there. And, you know, it goes to the different ways. These data centers are using a lot of power. They need to be cooled down and there's air cooled versus liquid cooled. And the technologies are evolving on a day to day basis. So I think that's going to be something to watch and see how it evolves. Because the one thing I tell you is the way that we are cooling HVAC all around that data center, which I touch a lot from the filtration of water side, is going to be evolving very quickly from a technology standpoint, just given how important it is.

9:47One of the areas that you mentioned was air filtration. Talk to us about that because I know that's a pretty hot area as well.

9:54Bobby Reifman: Yeah, that's been an incredibly active space from the M &A side. We've done a ton of deals in and around that. Obviously, the most prolific and the one everyone's seen is the filtration group deal that we sold to Parker, but we sold Cook Filter, Micronix, Facet. There's just been a lot in and around that space. And so air filtration is an area that has accelerated tremendously. And again, to my comment of you need cleaner air, people are always going to be focused on that. COVID went a long way with that, right? So that got people thinking for the first time, I need to be thinking more about the air I'm breathing and what it's doing to me, which is historically probably people didn't think about it as much.

10:28Bobby Reifman: And the simplest way to think about it is you've got your filter in your HVAC system at home. And how much were you thinking about switching out that filter every three months or six months? And I think post COVID, we saw people having a lot more attention to it. So what you've seen is a lot more demand around air filtration and how important it is. And what's really interesting, what I continue to be very bullish on in terms of the air filtration space is historically, as you think about climate control and air, originally it was, hey, can I control temperature? And now in your house, you've got air conditioning, you've got heat, you can see what's the temperature in your house.

11:03Bobby Reifman: The second piece to that was humidity. You start thinking about what that looks like. And now you have monitors and humidification systems in your house to both humidify and dehumidify. The third part is the piece that hasn't been solved yet, which is going to be fascinating to watch, which is air quality and the monitoring and censoring of that. And COVID is a great example of that. You start to see things popping up in terms of here's the air quality that exists there. But still, we don't have that visibility and no one's figured out the way to entangle that within all the other stuff within the airspace.

11:34Bobby Reifman: And I think further, it just keeps coming up. COVID was one piece of it. The Canadian wildfires. I think everyone's got an example of having been somewhere where it's been impacted. Me being in Chicago, I remember when you literally couldn't breathe outside. It would be tough to breathe. You see the haze coming over you. And further emphasizing, look at the importance of air filtration and people's attention to it. Given the themes that you just described in filtration, how are you seeing that overlay from the M &A world? The last 18 to 24 months has probably been the most active we've ever seen from a deal-making perspective in air filtration, water filtration, because of just the attention to it.

12:12Bobby Reifman: And you've seen a lot of these deals trading at pretty attractive multiples, just given the belief of the growth and future of it. What we're seeing is a lot of strategics that are very active. Atmos bought Cook Filter from us. Clonova bought Micronics from us. We had the Parker Business buying filtration group. And what's happened is a lot of investor interest to get into this space from an industrial perspective. So we hear a lot of private equity that has an investment thesis around filtration. Now, the challenge that exists out there is there's just not a lot of deals of scale. And we find a lot of private equity groups coming down market.

12:49Bobby Reifman: We find a lot of private equity groups looking and chasing private businesses to go try and build up that next platform because there is demand from an investment side. The challenge is finding those assets. So when they do come around, that's a big driver to why all these deals are going for such premium multiples. Bobby, we've been talking a lot about the industries that you're focused on. I'd love to hear more about your team and the geography that you serve. Yeah, I sit in Chicago and we've got about 140 bankers globally in the industrial M &A group with Lincoln. And from the U.S. side, we focus on subsector expertise.

13:24Bobby Reifman: We very early on identified the days of kind of the generalist in industrials. just doesn't work. Individuals, private companies, private equity, they're selling their businesses, they're looking for the experts in the space who have the relationships and the knowledge. And in the U.S., every one of our partners is very subsector focused, and that's where they're spending all their time versus just being a broad industrial banker. I think it's a big reason for the success we've had as we've dug in there. We also have a team internationally, including Europe primarily. And what I'll tell you is the European market is probably a step behind still from the evolution of M &A.

14:01Bobby Reifman: And they're still very geographic focused, but we're seeing slowly that change to also having demand from private equity and others for subsector expertise in Europe. And we wanna be ahead of that curve also. And just given the subsector expertise in the US, we're leveraging that over in Europe and that's been a key part of our success. So it's something we're really excited about. We think it's a key way to compete in our markets. And I think the proof is in some of the deals we've been doing over the past year or two. You know, I've been able to ride along, if you will, watching Lincoln evolve into the areas of specialty that you're in now.

14:37And it's really fascinating to watch how folks like you with your background elevate because of the expertise that you personally bring and the knowledge that you have in the industrial space. Give the audience a little background. What makes you unique in the investment banking world?

14:54Bobby Reifman: I'm unique from the perspective of I'm an engineer by training. Growing up, I always loved being a do-it-yourselfer. I loved building stuff. I still, to this day, do woodworking. I love metalworking. I've built a car with my father-in-law. So I'm a very hands-on individual. Being as that is, I went into engineering and I did a mechanical engineering degree down at the University of Illinois. Great education, very difficult, much longer nights and some grueling semesters there. I came out of there saying, hey, let's go try out the engineering. And I spent my first job being a nuclear power engineer for a company called Sergeant Lundy.

15:28Bobby Reifman: And very quickly into that, I realized not where I want to do from a career perspective. I love the education I got. I think engineering gives you some great problem solving skills and teaches you a lot that's very useful in the business world, but it wasn't what I want to do full time. And so I transitioned over to a hedge fund here in Chicago that was a quant fund. So all engineers, math guys, science guys, very numbers oriented. And I did that for a number of years. I enjoyed that, had success there, but knew that I always had to get back and get that business education, the one exploring those other areas.

16:03Bobby Reifman: So I went back to University of Chicago for business school and learned about what the options were out there and investment banking became very interesting to me. So I spent a summer at Morgan Stanley. At the same time, I had talked to a lot of others, including Lincoln in the space, and decided to take a chance on a small bank called Lincoln International that was probably 50, 60 bankers at the time. And I got a lot of cross-eyed looks from my classmates of turning down Morgan Stanley to go there, but it's been a fantastic decision. And I use that engineering background every day. As you think about the industrial world and often the CEOs and owners we're working with in those businesses, they're engineers themselves.

16:41Bobby Reifman: And I love to get into facilities, love to touch and feel products. And I think it's a big differentiator being able to speak the engineering talk with some of our clients here. And it also just, it creates that intellectual curiosity. I just love the businesses we work with. And I think that's been a big part of what's been helpful and successful to my career. So I want to bounce around here a little bit and thinking about your sellers and the engineers that potentially founded them or running them, selling a business is not something that they do every day. What are the things that they should be thinking about doing early and when should they start if they're thinking about a transaction?

17:17Bobby Reifman: We always say we love to get in as early as possible. I think that preparation, we're big believers in. If you're thinking about it for the first time that you want to sell your business and be out there a month or two later, you're going to find yourself in a tough spot. We're big process hounds and preparation is a key part of that, making sure you're prepared for all the questions that are going to come and how to create the most tailored and tight process possible. And what comes from that is prep. So you ask selling candidates and say, what should I be doing? Our comment to them is thinking like a buyer, well ahead of when you're going to sell your business.

17:50Bobby Reifman: What are the questions you'd be asking if you were coming in and you didn't know about the business? What's the data you'd want to see? Start tracking that very early on. Start establishing protocols internally so that you have all the answers to those questions that are going to come. Also ask the tough questions. I think often people love talking about the positives and the key story you're going to sell the market, but we're big believers in terms of being prepared for the questions you don't want to get. It's what we always ask before we go to market. What's the question we're not going to want to get from buyers or the data that we don't want them to ask for it.

18:21Bobby Reifman: Make sure you're ready to go and be positioned for it. So again, it goes to that prep side of it. And what prep means is really truly thinking like a buyer and doing the work ahead of time so that you're ready to go. Those are the processes that have the most success because the last thing you want is being at the five yard line of a deal and something coming up that you weren't expecting that comes out of left field there. And suddenly the whole process is off the rails. And in M &A, especially in a sell side process, momentum's everything. And when that momentum gets thrown off the tracks, it has just huge implications to the success of the process.

18:53I know this ebbs and flows through the decades that you and I have been in this business. I have my own guess, but where are sellers valuation expectations most disconnected from reality today?

19:06Bobby Reifman: It's private owners are probably sometimes the most real and also sometimes the most detached. What we find is the buddy's got his golf buddy and his buddy got 18 times for his business. And so he wants 18 times. One of them selling a widget to a core kind of hardcore industrial mining business and one was high growth AI business. And it's just very different and you have to educate them of that. I always try to let people understand is just because you're a low multiple doesn't mean you're a worse business. There's good multiples for specific businesses. And that goes to what's the growth of the business, the expectations, the sustainability.

19:38Bobby Reifman: And I'd say what sectors are most attached. I'm not sure it's really what sectors are. I think it's the difference between educated owners and owners who just don't really understand how the markets really value businesses. In the end, it's an art, not a science. And we try and tell them you can do all this stuff in terms of explaining DCFs and LBOs and president transactions and all that's important. But in the end, it's much more of an art and a lot of qualitative factors come into that too. So Bobby, you mentioned your engineering background, but you have a very unique kind of path that you've taken.

20:11You gave a little bit overview of that, but you want to give a little bit more flavor of your journey. We'd love to hear that.

20:18Bobby Reifman: Yeah, happy to. I grew up actually on the West Coast. Both my parents passed away from cancer before the age of 12, within two years of each other. So very early on, I learned about responsibility, about unexpected and being dynamic with life overall. And so at that point, I moved to the Midwest with their family here. And as I mentioned, engineer was always extremely interesting thing to me. I think The other very unique part of my journey was I went to business school starting in 2006. And so in 2006, you could walk into a recruiting room at University of Chicago program and have 10 investment banking offers thrown at you.

20:56Bobby Reifman: It was the hottest place to go. Everyone wanted to go into investment banking. And interestingly, the two biggest recruiters within my business school class were Bear Stearns and Lehman Brothers. And everyone went to their summer internships. The people who went to Bear Stearns came back, and Bear Stearns was no longer an option come spring of 2008. Everyone else went then to their full-time, and literally the first day off of the training desk for the people that went to the Bulge Brackets was the day that Lehman Brothers went bankrupt. It was a very unique time. There's very few in my class still in the banking world because of that, and it opens your eyes very quickly to the real world and what could happen there.

21:34Bobby Reifman: And so I think that's another reason why I was so grateful and excited about joining Lincoln is a big part of what Lincoln does is actually invest in the downturns. We've been able to recruit some of our best people and be able to have a broader look during downturns saying, hey, great time to go bring on more talent because we know we're going to come out stronger. And so as you think about 08, 09 with Lincoln, it was about investing and continuing to develop bankers. And me as an associate at the time, I appreciate that a ton. It's a big part of what helped me on my journey to where I am today at Lincoln.

22:03One piece that I think is fascinating is that you met your wife in mechanical engineering school. And I just, I'm thinking about your kitchen table discussions, just how fascinating those probably are having two engineers in the family. But tell us about that.

22:18Bobby Reifman: Yeah, so I did. I met my wife in engineering at Illinois. I'm not sure there's too many people who could say they met their wife in engineering, given the makeup of the class. My wife, mechanical engineer with me. My father-in-law, mechanical engineer. My family is completely different. My father was a litigator at a big law firm at Mayor Brown. Now what's interesting is neither me nor my wife ended up going into hardcore engineering type roles. She used her engineering degree to go to law school and become an intellectual property attorney. I've used it obviously to get into M &A. My father-in-law, he was a caterpillar for 45 years.

22:52Bobby Reifman: So we actually go down and give a lecture at Illinois to talk to students in engineering and talk about all the different career paths. One of the things that I always look back and say I missed out on, I didn't have a good sense of what all the options were. And my view is engineering opens so many doors. And I think it's important for those students to understand all the different options they have. And so we go down and my father-in-law talk about going into engineering. My wife talks about going into law and I talk about finance. Every year they do a survey at the end of class in terms of what's people's preference.

23:24Bobby Reifman: And I always come in dead last. So we still have some more education to do about what finance is and investment banking. It's great to see just people understand all the different options they could have, because I think historically the view was you go into engineering, you're going to be an engineer. And I think that's changed drastically. And I think our country needs that. I think we need more people with STEM type educations out there, whether they're going into engineering or not. Well, it's funny. and those that listen to every podcast have heard this a little bit, probably not the full story, but my mother went to get her doctorate in engineering when I was in college and she got her doctorate in engineering, mechanical engineering, and was recruited by the Air Force and spent 29 years with the Air Force, retiring as a three-star general equivalent.

24:07But she would have been an incredible investment banker. Actually, when she retired, the Air Force created an Air Force Analyst Lifetime Achievement Award in her name. And so to your point, mechanical engineering or engineering in general can take you a lot of different spots. Yeah.

24:23Bobby Reifman: And it's amazing to see also how the evolution of these undergrad degrees and where people want to go. And what goes again back to the topic we talked about earlier with AI is, especially from a guy who went to Illinois, where computer science is a extremely good program at Illinois. And that was the hot area to go into in the 2000s and 2010s. And obviously the computer programmer career path has been flipped on its head. And suddenly again, the hands-on, the mechanical engineers, the industrial engineers, civil engineers are becoming more in the spotlight and things continue to evolve from that perspective.

24:58Bobby Reifman: But it's just fascinating to watch things evolve as kind of the world changes. And we're seeing that happen in real time here. So if I am one of the students that you're speaking to and they come up to you afterwards one-on-one and say, hey, I really want to get into investment banking or maybe private equity, what advice are you giving them? My advice I always tell people is learn as much as you can. I think knowing where I was in college, you don't know anything. And getting out and having discussions, I'm always open to talking to college students. And we're always making sure that all the people at Lincoln are doing that.

25:29Bobby Reifman: And so go out, talk to as many as you can, and know that your first job may not be the job you end up at. That's okay. I think that what you should do is go somewhere you find interesting that you think you'll enjoy, think you'll learn a lot, but there's no wrong answers to it. I think the question they always ask me on top of that is, what are you looking for in terms of who you hire? Because it's always a challenge. We're recruiting now our summer analysts for before their senior year, we're recruiting them their fall of sophomore year, which is just continues to be crazy to me as I think about that.

25:59Bobby Reifman: And you go and you interview them and it's like, what's your experience? I was a lifeguard for the summer, right? And so what are you really looking for? It's not the job experiences. I think of two things of what makes, and connected, but what makes a good junior banker is intellectual curiosity and hustle. I love the individuals that want to understand more. They're not asking the questions just to ask the questions. They're truly interested in getting to know how it works. I love when my analysts and associates, I tell them always, you can be on any call I'm on. You may not be talking on it.

26:27Bobby Reifman: You may not be announced, but there's zero calls with clients. you're ever not going to be allowed to be on. And the ones that say, that's awesome. Let me just come and listen. Let me listen to how you negotiate those final points of the deal. Let me listen to how you're letting that buyer down. Those are the ones that end up being the greatest bankers because they're trying to just be a sponge and take it all in and really looking to learn as much as possible. Oh, that's fantastic advice. And I really think so often that people have this mindset of a mentor-menteeship type of relationship where the mentor does all the work and what you're describing is the mentee or the young professional.

27:03They need to be the ones doing the work and taking you up on that type of an offer. And most people don't, unfortunately.

27:11Bobby Reifman: Yeah, I think it connects to a little bit of the hot topic of kind of the return to office and people talk about the work from home piece and people say, hey, you had me come to the office just to come to the office. In a job like ours, what's so important is, actually, it's not the call with the buyer. is when you hang up that phone and you're sitting across the rest of the people on your team and you kind of debrief and you talk about it and you get that informal discussion of what's going on. That's where I learned a ton. I remember sitting there and being able to ask questions of why'd you do that?

27:40Bobby Reifman: Why'd you say that? Have we thought about this? What happens when you're working virtually is I remember during COVID is the call ends, you hit end and that's it. And you lose that other piece of it. And I think there's just so much to be done to learn from that. That's so key. And again, that's where the intellectual curiosity comes is you're not just taking notes, you're asking the questions after the call. Why'd you do that? Just help me understand. Well, it's funny you say that because my entire team knows that they do not hang up when the call's over, when the client or the prospect drops.

28:08They stay on and we do a 10 minute debrief and it just, the efficiency, as you talk about, I'm an efficiency hound myself. The efficiency of that versus hanging up and then going, hey, can we schedule a call to talk about the call? Let's just do it like immediately.

28:22Bobby Reifman: Yeah, yeah, it's exactly right. I ask all my guests if they have any quotes or mottos that they love. Do you have anything like that? The quote I always heard, it's a little bit of a harsh quote, but it's the quote I always think of is time is the currency of respect. And I'm just a big believer in valuing everyone's time. And it goes into a lot of different ways. The simplest is being on time, being at meetings, presenting when other people are taking their time to be there. But it's also how you respect other people's time. And investment banking is a grueling job at times. There's no question.

28:51Bobby Reifman: You're on 24-7 and everyone knows the comments about the hours, especially when you're a junior banker. But I think what's important is the difference between working just to work and actually having value-add type efficiency of what you're working on. And I'm very focused and I always say, hey, let's use our time in the most efficient manner possible for stuff that matters. And what I've found is people who work hard, work late, they don't mind it if they're doing it for stuff that matters and stuff that's going to teach them and stuff that's going to be related to a good deal. What they get frustrated in is they go work late into the night on some sort of presentation that's never even used.

29:28Bobby Reifman: And it was a, hey, this would be a nice to have. So that all just circles back to kind of time is the currency of respect and something I always keep in my mind as I deliver tasks and I'm working with people. I'm going to tip back into a couple areas that I think are interesting that our audience is going to want to hear from you specifically. You've had 20 years or more of doing deals. How are the best private equity buyers differentiating themselves in the processes that you're running? There's a number of things, the private equity, who have had the most success. And it's one is being very communicative and good deals that can go for premium values and establishing very clearly upfront that this is important and they want to own this business and not trying to play the game of, hey, let me be coy and pretend I'm not interested so I don't have to pay as much and maybe I can get a deal on it.

30:17Bobby Reifman: if it's a competitive deal, I want to know somebody that I have high convictions going to get there. And it's not always just about the dollars. It's about the certainty, timing, how they handle management, all those pieces to it. And those buyers that have a lot of success, especially for the very competitive deals, they're very early on over communicating and ensuring that people understand, hey, here's what we love. Here's what we're still working on. Let's be honest with you in terms of some of the stuff we're still working through, help us get through that. And I think that's led to private equity that has learned to move quickly, have learned to focus on what matters.

30:49Bobby Reifman: I think there's private equity that gets lost in the weeds in diligence, and there's private equity that says, hey, there's probably more there that could be some stuff we need to work on, but it's not going to matter to the overall picture. And it's really making sure you don't lose the forest in the trees. And too often I've seen groups that get caught up at the end around a half turn of value as you think about the final deal. And my comment to them always is if a half turn of difference in what you pay is going to be the difference in terms of the return you're modeling in, this isn't the deal for you.

31:21Bobby Reifman: What you should care about is winning the business and having the chance to own it. So that's what private equity more and more is learned. Now, interestingly, on top of that question then goes, how does strategics play in that? What are they doing? Strategics are learning to do the same. Historically, strategics were much slower, and that was an advantage that private equity had. We're seeing strategics operate much quicker, being able to do deals much quicker, not getting lost in the weeds, and it's allowed them to compete. We've seen a number of deals this year where strategics have moved very, very quickly to signing the contract, and what they do in terms of timing, certainty, terms in the contract are very private equity-like.

31:57Bobby Reifman: That's been a big game changer in the past couple of years. So are buyers, whether they're PE or strategic, paying more today for resilience or growth? I think they like a business because of resilience and the multiple they pay is because of growth. That's the way that I kind of frame it. And I always think about it as you think about a book, a confidential information presentation that we put together for a company. You've got two key sections, the key investment considerations. That's the hook. That's the why do you want to buy this? What's great about this business? And then there's the growth.

32:28Bobby Reifman: And the growth goes to how much do I pay for it, right? How much is this going to be worth in the future? And that's going to drive multiple more than anything. So one is about, do I want it? And one's how much am I going to pay for it? I want to circle this back around to AI. Earlier, you were talking about how AI is, in my analogy, similar to the gold rush. And there's a lot of picks and shovels that are being sold for the gold rush, which is driving a lot of the activity in the space. But how, from just the process and operation standpoint, what are you seeing AI's effect over the next five, 10 years?

33:00Bobby Reifman: Yeah, I think from an industrial perspective, AI is definitely going to be utilized more and more within industrial businesses. But the difference from the tech world or whatnot is it's not going to change the actual output, right? You still need the widget. And AI is not going to change the need for the widget. You may need more widgets now as you talk about the AI dynamics with data centers and whatnot. What it will do is create more efficiencies, better operating platforms, and better utilization internally from the sales side, from the operations side. So I think it'll enhance the margin profile, the efficiency, the production of a lot of these industrial businesses, but it's not going to change actually what they're making.

33:37Bobby Reifman: And again, that's why there's the investment side of why money is moving over the industrial side is it's only going to make those businesses more profitable, but there's no risk to those businesses going away because of AI. And that's what's so exciting about the space we're in right now. Well, Bobby, this has been a really great podcast. I'm going to ask you the last questions that I always ask my guests. If I'm a private equity firm looking to pick a banker to represent one of my portfolio companies or a founder looking to pick an investment banker, I've whittled it down to a couple of banks to make a decision on.

34:12What are the things you want me to remember tonight that will tip me your way?

34:16Bobby Reifman: I always separate it into two sides. I think one is the actual industrial side. We've got this subsector focus at Lincoln and the expertise, which creates the relationships and knowledge and proprietary insights into all the deals we've done. And there has been no bank that has been more active on the industrial M &A side over the last two years than Lincoln. And that's give us great insights in terms of what's happened in the market. And listen, the proof's in the pudding. You look at the deals we've printed and some of those deals in terms of success we've had and the premiums we've had is because of everything we've done and built internally.

34:47Bobby Reifman: We did a survey a number of years ago where we asked private equity, how do you make your selection? They talked about all the stuff, the subsector expertise and who the partner is and the team and whatnot. But also you want to work with someone you like working with. And that was actually higher on the prioritization list as they talked about who they wanted to be with. These deals we do, what I love about investment banking and what I love about our job is we are typically one of the most significant financial events for private owners and even for private equity. And we take that seriously.

35:15Bobby Reifman: And that means you're working very closely together. and what we like to say is not just that we do a great job, but we enjoy working with them and they enjoy working with us. Well, again, this has been a fantastic podcast and this is an exciting area for so many folks in the marketplace today and hope it continues and wish you the best of success in the future. Yeah, I appreciate that. Thank you for your time, Jeff. This was a fantastic conversation. Thank you for joining us for Northstar's Private Equity Fast Pitch. For more information about Fast Pitch or our boutique private equity heavy hitter events, you can visit us at enorthstar.com.