**Transcript was automatically generated by artificial intelligence.**

Paul Martin
Good afternoon and welcome to another episode of Paul Martin's crucial conversations today. We are real excited to have with us Chris Tutt. Chris is a founder and owner of Proactive Specialists. And back in May of 2017, Proactive partnered with Confluent Health. And at that time, Proactive had nine clinics in Oregon and Washington. As of today, they have grown to 15 clinics and will be opening their 16th clinic very soon. Confluent Health currently has 30 plus partnerships, representing over 530 clinics nationwide. So they have grown also. They have 90 education partners and 850 plus workplace injury prevention sites. Chris, it is great to have you with us today.

Chris Tutt
Thanks. Appreciate it. And hopefully I can help some people out here.

Paul Martin
I'm sure you will. I'm sure you will. So, Chris, you know, going way back because we've been talking to you guys since probably early 2015. I know that you and your partners had some financial objectives for your transaction, but what else did you want from an acquire that would make one potential acquire more valuable than the other?

Chris Tutt
That's a really good question, Paul. A lot of it I think a lot of it had to do with with a good fit. You know, you work for 15, 20 years and building a business and helping thousands of people, patients, but not not only employees, you know, helping people buy cars, houses, all that, all that sort of stuff. I want to make sure that somebody kind of took care of our baby and it and took care of our people. A lot of it, too. You know, we wanted to continue to grow and continue to be able to help more and more people. You know, we're kind of our own worst enemy, though. You know, we we had some we had some blindspot that we saw that were really, I guess, affecting our ability to grow and our ability to help help more people. So we're really looking for an organization that that was able to come in and, you know, fill our gaps and help us grow and help more people. But I think most importantly, it was who's going to take that? The best care of our baby. My grandfather and my partner's father gave us some seed money, so there was a certain amount of loyalty. And to want to make sure that we were good stewards of the of their resources to sell didn't didn't take it lightly at all.

Paul Martin
And so. Chris, you talk about your people and how important it was for your people to be well taken care of. And another blind spot, which is great term is, you know, we blind spot so much better than weaknesses right. Another blind spot was growth. And you guys had achieved some growth in order for those two things to be well taken care of. How did having multiple acquire options, how did that benefit you guys?

Chris Tutt
Yeah, I mean, there's when we went through the process kind of 2015, 2016, it was it was a crazy time, you know, much, much like it is right now. And we just didn't really know what was out there. You know, you're focusing on your business for 15 or 20 years. You're aware of your your local competitors that nationally we just didn't just didn't really know who the who the hitters were, who we couldn't go to anything about, what they were like, what they offered, you know, what did they offer in terms of continued education? Who else did they partner with that was going to be able to help us, help us be better? And I think one of our blind spots really was was our bench strength. You know, we were able to grow and in open clinics, it was it was hard. We're you know, we're physical therapists, first and foremost. And I think it's important to to continue to operate within your I guess, your your area of strength, your your waiting, where you you do the best. We're just having a hard time developing people. And so as we looked at the different partners, which it was partners was going to be able to help us develop our people. The best physical therapy companies traditionally are physical therapy companies. They weren't somebody that is necessarily the best. We founded Confluent Health, had a partnership with IIM. So tremendous continued continuing education opportunities. The EPM executive program and practice management, and that really gave the end up giving us a huge edge to be able to really increase our bench strength and continued to help people.

Paul Martin
So. So, Chris, what I hear you saying is that of the larger companies, some regional, some national of those larger companies, each of them had a unique offering as it applies to you and your staff. Being able to have development opportunities for your staff or were they pretty much all the same and you just picked one.

Chris Tutt
They're all they're all different. Yeah. Once we met. Oh, my gosh. I think initially I don't know how many different sheets were sent out. I would say 25 or 30 and we got a lot that that came back that just there was no way are there going to be a good fit based on how they responded to to me trying to find an organization to partner with is I mean, really 90, 90% culture. You know, if you're partnering with another organization that has a different culture, people are going to freak out. I'm I'm going to freak out. It's not going to be a good transition just because you don't you don't have the same beliefs. You don't you don't have the same values. And, you know, we're we had multiple offers. We're able to dig in and find out, okay, which is going to be a culture fit. So much of it came to be the way they responded. You know, we met with a lot of different organizations, from national companies to large and small e farm private private equity firms. How are they going to respond? Because that's you know, it's it's kind of like dating, you know, the first time you date somebody that's as good as it gets. It's, you know, really goes downhill. So we really went through those in which is which of these organizations put the best forward, the foot forward that way, which had the best message, which did I feel was going to be able to take care of our baby, which that I feel was going to be able to take care of our people. But then as we would kind of look at the deaf culture fit, then we would really start to dig into, you know, what are the continuing continue education opportunities, where are where are we weak, where these other organizations can come in strong? They're having a lot of the having a lot of interest was really, really important for the continued success of our of our organization.

Paul Martin
And so while you were certainly, you know, playing offense and defense for your people offensively, you were out and we were together searching for, you know, what's going to be that best match for your people. How did having those options benefit you and your partners?

Chris Tutt
It was overwhelming. First of all, the fact that so many organizations would actually be interested in partnering with us was was was was really it was really humbling. But on the other hand, there's a certain level of, I guess, competitiveness in the industry. When you have an organization that has been successful in their potential to continue to grow and be more successful, the these different companies that were interested in it kind of like can like buying a house in this time that people kind of up the ante a little bit, which was once again really, really humbling, the fact that somebody would pay X amount for for our business. But it also, you know, gave us an operating opportunity to choose which seven we're really interested in. You know, to me it wasn't necessarily about, you know, making the most amount of money I wanted to be able to, you know, be able to cash out. But on the other hand, to me, it was really about a fit and having multiple organizations interested in you. You're able to ask the tough questions. If you go out and you're talking to one organization, there isn't you know, there isn't that competitiveness where they're going to want you, where they're going to be more forthcoming with information. The fact that we had multiple we could we could, you know, go to the CEOs of these these companies and sit down with them for four or 5 hours and ask six pages of questions and see see how they respond. You know, were they looking at you in the eye? Were they sincerely interested in me and my people in my organization, or are they just looking to throw through revenue and net income down to the bottom line and bring it into their company at a higher multiple? So it it really gave us some leverage to really be able to meet these need these leaders, meet the regional leaders and we do the process.

Paul Martin
Yeah, it's kind of interesting when, you know, the faces of these companies, their logos and how many clinics they have, just like I went went through with Confluent. But when you really get behind all that and as you have described so well, when you sit down face to face, when you ask them to tell stories about certain things that have happened within their company, we realize that these are just people and people with different personalities and with different approaches, with different beliefs. And you guys, you went the extra mile. You and your partners went the extra mile, making sure that those people were a match for not only your people, which I know that was first and foremost and for you guys on your mind, but for for you guys as well and and I'm really glad it has worked out.

Chris Tutt
Yeah. Thanks. You know, Chris.

Paul Martin
In addition, as you're searching for that best partner at best, acquire, there's a way there's a process of trying to find what is the best partner that aligns with your strengths. And as you said, kind of fills in on those weaknesses. Talk me through a little bit about how that process enabled you guys to find the company for you that was best suited for your strengths and also was able to, again, maybe get give some guidance and help on those blind spots.

Chris Tutt
Yeah, but that's a really good question. To me, it was a matter of trying to find that clinic that was interested in us. We weren't looking for an organization to sell themselves to us. There's, you know, we were in the position. There's no reason that we had to that we had to sell. It was up to us to find the right company. What I mean by that, those companies that that came in and just told us all about themselves, I'm I'm I'm looking for somebody that has that has a humble heart. I'm not looking for somebody to to puff their chest. I'm looking for somebody that was sincerely interested in us, those companies that were asking about us. What do you guys look, you know, what are you guys looking for? And then they're kind of tailoring their presentation to, you know, to exactly what they're looking for. I'm just not into a bunch of fluff. I'm not into I'm you're not into fancy. I'm really into somebody really taking, you know, taking care of our taking care of our people. So to me, that's where that's where a lot of it originated during the during the interview process. Then as we would get to know, you know, other, other organizations and then like I said, we had multiple offers because we had somebody that was Tom that was in our back pocket that was going out and searching and in finding all these different, different organizations and is we would dove in deep and get to know their culture. To me, that's really where we ended up finding the find that the best fit that initially it's just trying to find out, you know, how interested are they in us, you know, rather than just throw throwing some numbers to the bottom line so they can grow as a company. It's just it's important that, you know, here we are, five and here five and a half years later, I have absolutely zero regrets. CONFLUENT It continues to grow. But, you know, the the the leadership is still interested in in me is is a person I think that's really, really important to that through the process.

Paul Martin
And, you know, what's remarkable is that as you have you as you've described so well, that these are people with their own ideals, etc., etc.. But these are also people that are behind a business that has now grown to over 500 clinics. And if you look at that management team for Confluent, it really has not changed all that much. So it's the same people. Certainly they're going to at some point, I believe, you know, bring in some more artillery at the top level. But it's really the same people that you guys talked to back five years ago.

Chris Tutt
Yeah. Yeah, it really is. It's you know, when you're when you're dealing with a large organization, I think there's an opportunity for one party to take advantage of the other in the fact that, you know, we've had, you know, steady leadership at the top without a lot of change, without any turmoil to me, really, really, really speaks highly internally in terms of how can I say this in terms of, I guess, the help that they hoped that we had. You know, we're we're physical therapists. We're coming into this really without any idea of the environment. How do you how do you sell a business any time there's a a how can I say anytime there's a difference where one party has more information than the other, there's an opportunity to for somebody to take advantage of it. I think using using you're using your team, Paul, that that playing field was was leveled. So there was not an opportunity for anybody to to take advantage of anybody else.

Paul Martin
Yeah. And I appreciate that. Really appreciate that. And yeah, we were we were also humbled and honored to to have been able to work with you guys. So now you've been in this five years, how are things going for you and where do you see things in the future?

Chris Tutt
Chris I'm totally happy, totally love what I'm doing. You know, it's it's nice to be able to cash out a significant amount of of the equity, but on the other hand, feel feel more supported than ever. I think about the the days when, you know, in private practice you're responsible for everything. You're staying up late, doing payroll, going over, you know, the accounts payable and you're signing checks. You know, I don't I don't I don't miss those days. Yeah. Now I'm able to now I'm able to to meet with everybody on a regular basis. You know, no one, everybody on a first name basis where they're, you know, what their significant others do and where they're gone, vacation, how old their kids are. And that was that was really, really tough when, you know, when it was just just myself in my in my two partners quality of life so much better. You know, it's the sort of thing gosh I wish I would have done and I wish I would have done it earlier. But I think as a as a leader, to me, I want to continue to grow and I want to continue to grow our people as well, as well as our business just didn't just didn't have time because I was working on really that the be priorities just seeing not just seeing a bunch of patients as as a therapist. You know we excuse me we get a lot of a lot of self-worth from from helping people. And now that I'm able to I was able to step out a little bit of the of the paperwork aspect. I'm able to focus more and more on our people, more on the more on the relationships. Five and a half years later, I would do it all over again. Sure. There's some rough spots as you're going through the going through the integration that the organization fluid that we chose top notch. You know, going into this process, I was really worried that, you know, about promises being made. You know, you're you've got a 40 or 50 page a agreement to sell a part of your heart and you should go through it. You know, it's well, you know, it's just you guys, this is going to go this way. You going to have to trust us. Trust us. Every single thing that Larry Ben said, it happened. So to me to me that that speed, that speaks a tremendous amount about the not the top level leadership. You hear all these you hear all these nightmares about these deals that they that they did and things they were promised that they didn't go or we didn't didn't receive and we didn't receive anything like that. So there's just, you know, a series of different things happened. Our for example, our bags were stolen when we were meet with Larry and his team years to release this. And everything you see, you know, you just write down what what was stolen. I'm going to pay you back. We were partnered with them like it's no, I appreciate that. But that's that's the kind of organization that this organization is. When the going gets tough, you really find out what people are made of top level. You know the leadership sat with us until the police came. You know, it's really, really important. You can sell your business for, you know, for for top dollar. But in the end, who are you going to be working with? Are these people that you want to call family? Are these people that you're going to trust taken over your babies in maybe, maybe perpetuity? What one once you and then what what's your name in the community going to be like? Don't just I'm just not into not into making the biggest buck to me. It has to be a great set. It has to be a great culture fit.
Paul Martin
Absolutely. Absolutely. Chris, look, I want to thank you. You have served our audience with just some really, really great information. I really appreciate your time today. You're my pleasure. And all of you out there who tuned in and listened to Chris today. If you have any questions on any of the topics that we discussed or any other topic that has come up on Paul Martin's crucial conversations, click below and let's talk. Thanks for joining us and I look forward to seeing you in the very near future.