October 27, 2023

Making decisions with a long-term perspective in mind

Keith Burns - Apex Physics Partners, President
Search Fund Name:
Seneca Creek Partners
Company Name:
Apex Physics Partners
Company Industry:
Acquisition Date:
April 2014

In June of 2013, Keith Burns and his partner Michael Curry founded their search fund, Seneca Creek Partners. Keith brought a strong professional background, including legal experience at Latham and Watkins and Jones Day following his JD and MsRED from Columbia, as well as a role as Vice President in the securities compliance division at Goldman Sachs. Their journey into the world of search funds began when Michael, inspired by a client's self-funded search, introduced Keith to the concept.  

The duo ran an outstanding search process, acquiring Krueger-Gilbert Health Physics (“KGHP”) within a brief nine months. KGHP is the respected leader in diagnostic medical physics in the Mid-Atlantic region, helping their clients ensure optimal imaging quality and radiation safety for their patients. Under the duo’s leadership, KGHP experienced substantial growth, expanding from 16 employees at acquisition to over 170 today. Additionally, the Company earned recognition as a "Best Place to Work" for three consecutive years, while maintaining an impressive Net Promoter Score (NPS) in the 80s.  

In 2019, KGHP took on a growth investment from Blue Sea Capital to form Apex Physics Partners, with Keith and Michael taking on roles across both firms to ensure continued success. Blue Sea provided capital for KGHP and Apex as they expanded, with KGHP continuing to operate in the Mid-Atlantic region, while Apex sought acquisitions of medical physics practices in new geographies.

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Questions & Answers

Keith, why did you decide to pursue the traditional search path? 

People often underestimate the value of relationships built during a traditional search. In self-funded searches, you are risking both your time and money, which can be a hefty gamble, especially early in your career. In most cases, I don't reccomend taking that risk so soon. It's a matter of choosing between a higher likelihood of being wealthy long-term or being in control short-term. It’s important to note that control can be an illusion; in either scenario, if things go well, you're in control, but if they don’t, you're not. The key is being "long-term greedy" and making decisions with a long-term perspective in mind.  

How did you leverage Relay as a partner, during both the search and operating stages? 

Our search process was relatively short, we found the company within two months and closed just nine months after it all began. We engaged in frequent conversations with Sandro, for example, to ask for introductions to industry individuals that we were keen to learn from. More than just that, Relay provided invaluable emotional support through the challenging phases of both searching and running a business. Operating a business as a searcher is anything but easy, despite what some may claim. There were times when we were uncertain, and good investors not only hold you accountable, but also offer their support and partnership. 

What unexpected challenges did you encounter during the search? 

One of the challenges we faced was the unpredictability of the bidding process. We initially won the bid for KGHP, only to have the seller reverse their decision when a competing bidder offered a better price. However, an investor advised us to remain patient and “stay by the basket”, suggesting that deals can often resurface unexpectedly. True to their word, the broker eventually informed us that the competing bidder had fallen through, and we were once again given the opportunity to acquire the business. 

The challenges didn’t end there, though. During due diligence, we struggled to gain access to employees and other information, so we had to re-negotiate structures to safeguard our interests. In the end, we viewed these challenges as ultimately strengthening our resolve and preparing us for the discipline required to operate the Company. 

Based on your experience, what advice do you have for searchers navigating the deal process? 

It's crucial to maintain objectivity about the deal and the go/no-go decision for as long as possible. Many people tend to fall in love with deals too soon. When I speak to searcher / operators who have faced challenges, I find there were often signs during due diligence that could have indicated the issues they would encounter. However, factors like running out of money or time pressure can cloud judgment. The worst outcome you can have in search isn’t failing to acquire, it’s acquiring a bad business and struggling to break even. So, always keep objectivity in your deal assessments. 

What was your favorite part about being an operator, and what did you cherish most about operating Apex Physics? 

Witnessing the growth of my team and the progression of people we hired at junior levels as they took on increasing responsibilities has been a highlight. We managed to turn employees who were initially skeptical and thought we would harm the business into our biggest supporters. Building trust and goodwill with the team is something I am immensely proud of. There were tough times when I considered whether I should even be an operator, but my family kept me focused on my passion, and I also became a much more patient person in the process. The patience I have now would likely be unrecognizable to my past self. 

What unexpected challenge have you had to overcome as an operator, and what steps did you take to address it? 

Communication with our board was a significant challenge. We didn't do a good job of aligning with our board and understanding what constituted success from their perspective initially. To tackle this issue, we enlisted a business coach who provided some pretty harsh, but necessary feedback that we used to improve our approach. As a slow-growing business, we ultimately became a success when we started expanding through M&A. In this process, one of the key lessons was the importance of articulating our strategy to our board from the outset. So, I would advise others to focus on early alignment with the board and delivering what they expect, as they hold the key to your future in the business.