After this “annihilation,” he was sure he was never going to sell again. “I would die at my desk after that bitter experience,” he says.
It didn’t take long before things were set in motion to unload the firm once again. But this time, Kabarec was alert to all the red flags. He wanted to sell the business soon because he had clients he didn’t want to leave in the lurch, he says.
He noted that people in his firm were interested in purchasing it, and there was a handshake agreement, but the technological infrastructure posed a barrier.
Enter Carson Wealth, one of the largest wealth management firms in the country, based in Omaha, Neb., and founded by Ron Carson. “We came across Carson and started a courtship,” Kabarec remembers. “We called them at the same time they called us.”
“We did our due diligence again, checked once, checked twice. I wished I had done that the first time,” Kabarec says. “I looked under the rug, I looked under the bed for skeletons and I found nothing.”
Kabarec did not reveal how much he received for a 25% equity interest in his firm. He would only say the valuation is similar to that of the Mesa deal. “With Carson it was simple. You do this … I pay you that. We shook hands and had a glass of wine,” Kabarec says.
He praises Carson for “being very open and up-front with everything.” The high-profile Carson is “kind of an evangelist preaching the gospel of old-fashioned financial planning.”
Kabarec changed the firm’s name to Carson Management. It’s the only Carson-branded advisory firm in Chicago, he says. The remaining 75% of the stock is split three ways with Kabarec and his office partners.
Today, the firm has 250 clients and $235 million in AUM, up from $170 million in October 2008 and $160 million in June 2017. Kabarec says that with the Carson Corporation, his partners are looking to acquire some other practices.
The experience from the botched Mesa deal has made Kabarec very cautious, to say the least. “Boy have I learned some lessons,” he notes. “The message here is ‘Be careful and look under the rock, not at the rock.’”