Tag Archives: middle market companies

Intellectual Capital and Cautious Traditional Banking Fuel Investment Activity in the South: An Interview with Ken Cyree

Photo by Robert Jordan/Ole Miss Communications
Photo by Robert Jordan/Ole Miss Communications

Dr. Ken Cyree is the Dean of the School of Business and the Director of the Mississippi School of Banking at the University of Mississippi. He is also the Frank R. Day/Mississippi Bankers Association Chair of Banking, and a Professor of Finance at the University. He holds a Ph.D. in finance from the University of Tennessee at Knoxville. His research interests include banking and financial markets, and his papers have been published in the Journal of Business, Financial Management and Journal of Banking and Finance, among other academic journals.

Key Takeaways:

  • The culture of debt financing in the Southeast has typically been risk-averse and remains that way today.
  • Because traditional banks remain risk-averse in debt financing, there are more investment opportunities in the Southeast for private equity firms, venture capital firms and angel investors.
  • To best fuel middle market growth and activity in the Southeast, create partnerships between venture capitalism, private equity, traditional banking and hedge funds to support companies from inception to the middle market stage and beyond.
  • The intellectual capital found in the South’s college towns and cities have the resources to spur entrepreneurial growth.

Continue reading Intellectual Capital and Cautious Traditional Banking Fuel Investment Activity in the South: An Interview with Ken Cyree

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A Window Into the Tech Industry in the Southeast: An Interview with Doug Johns

Doug Johns is a senior advisor to Doug Johns headshotFourBridges Capital Advisors with many years of executive experience in the technology and telecommunication sectors. He also currently serves as the Chairman of the Board of Directors for NIVIS, LLC, the world’s leading developer and integrator of wireless network technologies.

Key Takeaways:

  • Overall, the technology market in the Southeast is very robust, particularly in Atlanta.
  • From a tech standpoint, the Southeast is underserved in terms of access to capital, investment bankers and advisors.
  • The tech industry in the Southeast needs increased visibility to become comparable to other major tech hubs.
  • Developing incubators and accelerator programs are critical to the growth of tech startups.

Continue reading A Window Into the Tech Industry in the Southeast: An Interview with Doug Johns

What the Recent Sale of Southern Tool Steel Tells Us About the M&A Market in the Southeast – Part 1

Key Takeaways:

  • The sale of Southern Tool Steel supports several trends found in the Investment Banking South market survey, including:
    • Manufacturing is particularly strong in the Southeast and is an especially attractive sector to the M&A market.
    • There is a lot of money from outside the region looking for deals in the Southeast. Money is willing to travel to the region because prices are inflated in other parts of the country.
    • There is a lot of money chasing a few quality deals in the region, and it’s a seller’s market.
  • Even if a company has a few blemishes, it’s still a great time to sell if the business is properly packaged and the owner is emotionally ready.
  • Despite interest in the Southeast from investors across the world and advancements in communication tools, proximity can still matter and give local investors an edge.

Continue reading What the Recent Sale of Southern Tool Steel Tells Us About the M&A Market in the Southeast – Part 1

No Geographic Barriers for Middle Market Companies in Florida: An Interview with Glenn Oken

Glenn Oken is a managing director at Mangrove Equity Partners in Tampa, FL, where he focuses on originating deal opportunities and qualifying acquisition candidates. Glenn has been a private equity investor focusing on the lower middle market for 27 years and has completed 129 transactions across 57 different niche industries.

Key takeaways:

  • For lower middle market companies in Florida, there are no longer geographic barriers. Money is willing to travel.
  • However, capital for startup companies may more commonly find seed funding through local angel groups and investors. Once they prove their business model they tend to attract interest from local investors, or from the start-up focused areas of the country.
  • Face-to-face meetings are essential in M&A deals. While numbers are important, relationships are key. In-person meetings give both sides an opportunity to assess the character of a potential partner.
  • As equity partners seek out lower middle-market companies, they look for those whose products or services are essential, non-cyclical and non-commoditized. Often, this ends up being companies with some measure of engineering content, customization, or technical capability who offer mission-critical products or services.
  • Thanks to the strength of the manufacturing and industrial services sector, the South may be one of the best regions for investors focused on those industry categories.
  • The M&A market has not yet seen a sudden mass exit by Baby Boomers. Multiple factors, not just age, are involved in an exit decision. Thus, deal volume seems to have followed a natural cycle over the years, rather than a sudden deluge of exiting Baby Boomers.

Continue reading No Geographic Barriers for Middle Market Companies in Florida: An Interview with Glenn Oken

Capital Looking For a Home in Charleston, South Carolina: An Interview with Bobby Pearce

Bobby Pearce is an attorney with Smith Moore Leatherwood and the co-managing partner of the firm’s Charleston office. His practice includes mergers and acquisitions, corporate law, private securities offerings and shareholder disputes.

Pearce has an entrepreneurial background, having started or invested in multiple companies, and since 1984, he’s spent a great deal of time working on economic development initiatives for the state of South Carolina and the Charleston area.

Key Takeaways:

  • There is a broad chasm in South Carolina between investors with money and companies seeking to raise funds. With a shortage of mid-market companies that have the longer-term, proven track record that most investors are seeking, capital often is being left sitting on the sidelines.
  • Established companies, especially with EBITDA of $2 million and above, now have many more options for capital.
  • Charleston is on a fast growth track with its commercial and industrial base of companies; the number of home-grown and recruited successful, mid-market companies is expected to grow exponentially over the coming years.
  • The snowballing growth of mid-market companies in this region will lead to many more successful exits and then much more capital being reinvested into new companies in the Lowcountry of South Carolina, creating a self-fulfilling cycle of formation, growth and corporate and investor success.
  • Tech-savvy and creative millennials are migrating to Charleston at a rapidly accelerating rate because of its livability, coastal amenities, historic charm and now high-impact work opportunities. The region is one of the top 17 fastest-growing metro areas in the U.S. and is experiencing some growing pains, having to explore infrastructure options to better accommodate the increasing influx of people and businesses.
  • Boeing’s new multi-billion dollar aircraft manufacturing and assembly plant here has spurred an explosive growth of investment in the Charleston region’s aerospace and aviation cluster. Daimler just announced its plans to grow the region’s automotive cluster by building a Sprinter plant, which will complement the already-existing defense, tourism and health care industry clusters.
  • South Carolina’s highly-integrated, 16-campus technical education college system has greatly helped to attract Boeing and other companies to the state and the region. This system offers unparalleled industry-specific training and education and thus provides a steady stream of well-trained, qualified employees, which most other states cannot provide.

Continue reading Capital Looking For a Home in Charleston, South Carolina: An Interview with Bobby Pearce

Tech Companies Attracting Out-of-Region Investors to North Carolina: An Interview with David Jones

Mr. Jones is co-founder of Bull City Venture Partners in Durham, NC, and partner of Southern Capitol Ventures in Raleigh, NC. He previously co-founded and served as the Chief Technology Officer of Orthocopia.com.

Key Takeaways:

  • In today’s market, growth is one of the greatest definers of value. Consequently, private equity groups are competing to invest in tech companies because they are fast growing, require relatively little upfront capital and offer the potential for a quicker return.
  • Traditional tech centers like San Francisco, New York and Boston are investing outside their region because markets are overcrowded and value can be found in innovative companies in areas like the South.
  • The startup market is gaining strength because successful entrepreneurs who have sold their businesses are choosing to reinvest in their local communities by funding early stage companies.
  • Industries that have a binary outcome – meaning they are either approved or not, like biotech – are becoming less attractive to investors. Meanwhile, hardware companies like 3D printing are gaining traction.
  • Companies should seek to build relationships with funders long before they think they need the money. By engaging funders in the business early on, companies position themselves to call on them when the time is right.

Continue reading Tech Companies Attracting Out-of-Region Investors to North Carolina: An Interview with David Jones