Middle Market Growth - April 2013 by Association for Corporate Growth

Growth Middle Market

// APRIL 2013

Framework of a Deal Q&A WITH PNCâ&#x20AC;&#x2122;S SCOTT WALL ON EMERGING MARKETS IN FLORIDA

BlackEagle Partners and US LBM Holdings Save Jobs and Drive Growth Despite Economic Challenges

FRANCHISE PLAYERS: PE PROS SEE PROMISE IN Business model

A publication of

WEDNESDAY, 8 MAY 2013 TRANS-ATLANTIC SIMULCAST: LONDON–NEW YORK

INSIDE THE MIND of the LIMITED PARTNER

HOW DO

middle-market

PRIVATE EQUITY FUNDS look to align their interests with LPs– CAPITAL COMMITMENTS, Euro vs. U.S. waterfall,

middle-market

FUNDS HAVE

the operational capabilities to

CREATE NEW

VALUE?

COMMUNICATIONS?

AT OUR SIZE, CAN MIDDLE-MARKET PRIVATE EQUITY really move the needle FOR US?

CAN

sector specific M I D D L E - M A R K E T funds

boost returns through vertical integration?

Duane Morris LP Institute presents its inaugural trans-Atlantic simulcast, originating in New York and London, which will provide an inside look at the drivers of LP investing strategies in middle-market private equity on both sides of the Atlantic.

Join us for a fast-paced exchange of views from LPs, GPs, gatekeepers, placement agents and advisors.

NEW YORK | 12:00 p.m. to 2:00 p.m. Sentry Centers | 810 Seventh Avenue (between 52nd and 53rd Streets)

LONDON | 5:00 p.m. to 7:00 p.m. ETC Venues | 200 Aldersgate (near St. Paul’s) The New York program will include a light luncheon; a networking cocktail reception will follow the London program.

Click here to register. For more information, contact Ellen Auwarter. www.duanemorris.com

executive summary GARY A. LaBRANCHE, FASAE, CAE // President and CEO, ACG

Driving Middle-Market Growth

ere in Chicago, the ground is finally beginning to thaw and spring is slowly emerging. Along with these signs of new beginnings, ACG is proud to celebrate the inaugural edition of ACG’s

official publication, Middle Market Growth. This magazine is the flagship of a new suite of digital publications that will also include daily and weekly e-newsletters. Middle Market Growth will address the evolving knowledge needs of ACG members and provide a diverse range of insightful business intelligence. Presented in a cutting-edge, digital format, Middle Market Growth offers an interactive rich media experience available via tablets, smartphones and personal computers. The magazine also allows readers to share articles and other content via email and on social networks. If you are reading this on your computer and want to access it on the go,

download the app for your tablet. Middle Market Growth is passionate about sharing the middle market story. Each issue will feature a “Growth Story,” which showcases how private capital investment has helped a company benefit customers, owners, managers, employees and the community. Additionally, the magazine will act as a bridge to connect ACG chapters from all over the globe. ACG chapters hold more than 1,200 events each year with speakers from the financial industry as well as prominent and respected thought leaders from a wide range of fields. Middle Market Growth will highlight some of that content, leveraging the power of the ACG network. As a result, the wisdom of a speaker on the West Coast will be accessible to readers on the East Coast—or in China and Europe. Middle Market Growth also provides a platform to share research and thought leadership from the world’s leading authorities on strategic and financial growth. With an audience of more than 40,000 mergers and acquisition professionals, Middle Market Growth has an amazing reach. It also will also be delivered to elected officials in Washington, as well as media, academics and others who would benefit from more knowledge about the world of middle market private capital investment. If you know someone who should receive Middle Market Growth, just let us know and we’ll add them to our list. In addition to Middle Market Growth, ACG members will continue to receive Mergers & Acquisitions, a print magazine published by SourceMedia, Inc. Together, Middle Market Growth and Mergers & Acquisitions will provide a powerful combination of insight and industry intelligence, providing M&A professionals with world-class resources. Spring, the season for growth and renewal, is the perfect time to launch a magazine dedicated to growth. You can help this effort bloom by providing us with your feedback on this issue and every issue to come. Together we will cultivate a powerful resource to help you achieve your professional objectives and enhance ACG’s mission of “Driving Middle-Market Growth.” //

Reason says: go with the well-known. Instinct says: go with the know-how.

One of the six largest global professional services firm, Grant Thornton specializes in helping private equity firms and their portfolio companies realize their potential. We have the industry knowledge and breadth of resources to advise on all aspects of the private equity transaction from deal origination, through structuring and value creation to exit planning and execution â&#x20AC;&#x201C; all delivered quickly through a single point of contact who has the experience and know-how that complements your expertise. To help unlock your potential, visit GrantThornton.com/Growth.

Grant Thornton refers to Grant Thornton LLP, the U.S. member firm of Grant Thornton International Ltd.

Growth Middle Market

// APRIL 2013

growth story

Framework of a Deal

Growth MIDDLE MARKET

// APRIL 2013

Framework of a Deal Q&A WITH PNC’S SCOTT WALL ON EMERGING MARKETS IN FLORIDA

BlackEagle Partners and US LBM Holdings Save Jobs and Drive Growth Despite Economic Challenges

FRANCHISE PLAYERS: PE PROS SEE PROMISE IN BUSINESS MODEL

During the housing crisis, building materials companies took a hit along with homeowners. Black Eagle Partners and US LBM Holdings saw promise in these distressed companies and forged ahead to save jobs and create stronger businesses. What many saw as risky, they saw as an opportunity to drive growth in the middle market. Read more.

“We believe the best businesses are locally focused, and we keep each of our companies focused on the local customer.” Jason Runco, a BlackEagle Partner

A publication of

ON THE COVER // BlackEagle Partners saw a tremendous investment opportunity in lumber.

table of contents in this issue President & CEO Gary LaBranche, FASAE, CAE glabranche@acg.org

Vice President, Communications & Marketing Christine Melendes, CAE cmelendes@acg.org

Editor-in-Chief Kristin Gomez kgomez@acg.org

feature

in every issue

Franchise Players Roarke Capital Group and FOCUS Brands show there are numerous opportunities for growth in the franchise world. Using examples from successful acquisitions, including recognizable brands such as Cinnabon, Carvel and Auntie Anne’s among others, FOCUS Brands proves it’s worth a fresh look at this winning business model. Read more.

Executive Summary Face-to-Face The Ladder

Director of Communications Matt Switzer mswitzer@acg.org

Manager, Creative and Branding Brian Lubluban blubluban@acg.org

It’s the Small Things

vice president, strategic development

The Leadership

Ellen Moore emoore@acg.org

vice president, chapter operations Leslie Whittet, CAE lwhittet@acg.org

departments the round Find out how private capital helps the middle market and other news. Read more.

a qualified opinion Scott Wall, CTP, president of ACG Orlando, talks about investment in Florida and beyond. Read more.

acg@work Find out what’s happening at ACG chapters around the globe. Read more.

the portfolio

Custom media services provided by Network Media Partners, Inc.

Advice from a franchise expert, trends in franchise sales, and due diligence in M&A.

Association for Corporate Growth 125 South Wacker Drive, Suite 3100 Chicago, IL 60606 ACG Membership: membership@acg.org www.acg.org

“In an uncertain market, be assured of a first-class presentation of your company’s assets.”

Wrap up your deal with Merrill DataSite . ®

Maximize your deal’s potential with a Merrill DataSite virtual data room. Every day, dealmakers all over the world use virtual data rooms from Merrill DataSite® to drive deals to a successful conclusion. Why? Because Merrill DataSite makes it easy to present your deal to buyers anywhere around the world, and it’s fully supported by an expert and experienced project management team. Invite interested parties to review your deal’s due diligence information online, via a secure virtual data room, hosted by Merrill DataSite. A Merrill DataSite virtual data room is smart, simple and secure. It captures buyers’ actual due diligence activities online and provides you with valuable intelligence to help negotiate a successful deal. To find out more, or to arrange a demonstration of our VDR solution, call 1.888.867.0309, email us at info@datasite.com, or visit www.datasite.com today.

www.datasite.com

APRIL 22-25, 2013 | ORLANDO, FLORIDA

Networking 2.0: The Fist-Bump

The fist-bump is the stuff of champions, a celebration of achievement. Variations include the “explosion and rewind” and a chorus of boo-yahs. And, it is one way to signal the start or end of a new deal. Get your fist-bump on at InterGrowth 2013.

The strength of the ACG Global network is showcased at InterGrowth, where attendees experience firsthand the business-building power of the ACG community. Network with more than 2,000 professionals from every part of the M&A “ecosystem.” Register today at www.InterGrowth.org

Face-to-face Connect to Your Next deal

Bringing the M&A Ecosystem Together Click to view a slideshow of photos from 2012.

InterGrowth is the premiere event for you to experience firsthand the business-building power of the ACG community. Coming up April 22–25 in Orlando, Fla., this event is created to maximize your time away from the office. InterGrowth brings together 2,000 professionals from the M&A “ecosystem,” including private equity firms, corporate development, intermediaries, law firms, accounting firms, lenders and others. The schedule allows for plenty of time to network informally as well as structured business networking opportunities such as ACG Capital Connection and ACG DealSource. With 2,000+ private equity industry leaders convening in Orlando, this is THE event to discover your next deal! Register today!

“InterGrowth provides an opportunity for us to share our thought leadership with industry professionals, form new connections with funds and investors, and deepen our existing relationships.” Brent Gledhill, global head of investment banking, William Blair & Company

Face-to-face Connect to your next deal

chapter events May 16, 2013 Ninth Annual M&A ACG DealSource and ACG Capital Connection Metropolitan Club, New York, New York More info

April 9, 2013 Vancouver ACG Capital Connection Four Seasons Hotel Vancouver, British Columbia, Canada More info

May 29-30, 2013 ACG Boston Growth Conference TBD More info

Visit www.acg.org for an up-todate list of events in your area.

April 18, 2013 ACG Capital Awards Gala Ritz-Carlton Hotel Tysons Corner, Virginia More info May 1, 2013 Ninth Annual ACG Silicon Valley U.S. Trust GROW! Awards TBD More info May 14-15, 2013 ACG Mid-America Corporate Growth Conference Chase Park Plaza St. Louis, Missouri More info

June 10-11, 2013 ACG Marylandâ&#x20AC;&#x2122;s Second Annual Deal Forum Pier 5 Hotel, Baltimore, Maryland More info JUNE 13-14, 2013 Mid-South ACG Capital Connection Marriott Downtown Louisville, Kentucky More info

To have your chapterâ&#x20AC;&#x2122;s upcoming events featured in Middle Market Growth, please send the details to editor Kristin Gomez. Be sure to include name of event, time, date, location, cost and link for information about the event.

the round News that Matters GrowthEconomy.org Reveals Powerful Impact of Middle-Market Companies GrowthEconomy.org, a project of ACG in collaboration with the Institute for Exceptional Growth Companies (IEGC), PitchBook and the Edward Lowe Foundation, is changing the public perception of the private equity industry, most notably the middle-market growth community. Never before has quantitative information on private capital investment been at the fingertips of the general public so readily—and the findings are powerful. GrowthEconomy.org launched in 2012 to provide a historical comparison of the performance of more than 16,500 private capital-backed businesses and publicly traded companies. Users can browse through states and Metropolitan Statistical Areas, and select different time periods from 1995 to 2010. The site will produce actual data for the economy and time period

“For the first time, GrowthEconomy. org makes visible the impact of private capital investment in the U.S. economy.” Andrew L. Rice senior VP, international, The Jordan Company

selected, viewed by sectors, stages and growth factors. Every search is dynamic, producing data and graphs driven by the user’s search criteria. “For the first time, GrowthEconomy.org makes visible the impact of private capital investment in the U.S. economy,” says Andrew L. Rice, senior vice president, international, The Jordan Company and ACG Global immediate past chairman of the board. “The data reveals that private-capital backed middle-market companies outperform other companies on sales, which drives employment growth.” Looking at the broadest possible sampling

(1995-2009), highlights from the data at GrowthEconomy.org reveal: • Private capital-backed companies grew jobs by 81.5 percent, while all other companies in the U.S. economy grew jobs by 11.7 percent. • Private capital-backed companies grew sales by 132.8 percent, while all other companies in the U.S. economy grew sales by 28.0 percent. • Middle-market private capital-backed companies created more than twice the amount of new jobs (339,909) than any other employment stage. • Private capital-backed companies had more annual relative growth every year except one compared with the general U.S. economy. // Find out more about how private capital helps middle-market companies grow.

Tell Us Your News // Do you have middle market news to share? Middle Market Growth wants to know what’s happening in the middle market around the world. Please share your news in 250 words or less, along with a color photo if available, to editor Kristin Gomez.

the round News that Matters

the pulse What do you think are the most pressing issues facing private equity and the middle market in 2013?

ACG JobSource® is an online job board geared toward helping

regulation

middle-market private capital

tax reform

professionals identify and apply

uncertainty

for open M&A jobs. In addition,

SEC registration

employers and recruiters seeking

economic volatility European debt crisis

to fill middle-market jobs can

access to capital

access qualified candidates through online job postings. ACG JobSource job posts range from entry-level positions and internships to c-suite executives. Tap for more information.

Other Responses “Chinese economic slowdown” “Health care costs” “Interest rates due to QEs” “U.S. spending” “Continued systemic slow growth of the U.S. economy” “Lack of inventory as to good sellers who are uncertain about the economy” “The uncertainty in the economy coupled with expected low returns in the financial markets are leading a number of sellers to defer the sale process. This is reducing the supply of qualified companies for sale.” “Lack of deal flow” “The elephant in the room is the federal government debt and deficit.” “Tax and budget reform” For more responses and to join the conversation, visit the ACG LinkedIn group.

answer this Which industries do you think have the greatest potential for growth in the next 12-18 months and why? Send your thoughts to Middle Market Growth editor Kristin Gomez. Watch for select responses in the next issue of Middle Market Growth.

the round News that Matters PitchBook Releases Fundraising and Capital Overhang Report

HOnors

PitchBook recently released its 1H 2013 PE Fundraising and Capital Overhang Report. This semi-annual report examines U.S.-based fundraising for all

Peter C. Spier,

Bradley E.

Joel Montminy,

Tim Ramsey

types of private equity funds,

attorney at

Haddock

CEO of Creo

of Bodker,

including buyout, growth,

Gould & Ratner

of Haddock

Capital Advi-

Ramsey,

mezzanine and energy.

LLP and of ACG

Law Office,

sors and of

Andrews,

PitchBook publishes multiple

Chicago, was

LLC and an

ACG Los Ange-

Winograd &

report series that offer critical

recently named a

ACG member-

les, was named

Wildstein and

insight and analyses on trends

2013 Rising Star

at-large was

by The M&A

ACG Atlanta,

in the private equity and venture

by Illinois Super

recognized

Advisor as a

was named

capital industries. Powered

Lawyers in the

as the 2012

winner of the

Super Lawyer

by the same comprehensive

areas of corpo-

Alumni Fellow

2012 40 Under

by Thompson

research available in the

rate law, M&A

for Washburn

40 Award.

Reuters.

PitchBook Platform, PitchBook’s

and gaming.

University.

reports range from quarterly industry breakdowns to more specific reviews, such as exits and fund returns. To learn more about getting

Babson Capital Management Supports Harbour Group Acquisition of Onicon Babson Capital Management LLC, a global investment management firm

access to the highest-quality

with more than $160 billion in assets under management and operations

private equity and venture

on four continents, announced it provided senior debt to support Har-

capital data please visit

bour Group’s investment in Onicon Inc.

www.pitchbook.com.

“Harbour Group is pleased to work with Babson Capital on the Onicon acquisition,” says Jeff Fox, chairman and chief executive officer of Harbour Group. “We are excited about the organic and acquisition growth opportunities for Onicon, and are confident that Babson Capital will be a strong partner for us going forward.” Onicon, founded in 1987 and based in Clearwater, Fla., designs and manufactures highly engineered energy measurement systems and flowmetering devices. These include BTU meters and turbine, electromagnetic, ultrasonic, thermal mass, and vortex flow meters for use in hydronic (water-based) heating/cooling systems as well as water, steam, gas and compressed air applications.

the round News that Matters

International Deal-Making Indian consumer M&A likely to cool in

Telco deals to dominate Baltic markets.

2013. India’s consumer sector may see deal

Mergers and acquisitions in the Baltics are

heat cool off considerably this year after

expected to increase in 2013 from the low

seeing a record 301 percent year-on-year

levels last year, polled senior dealmakers

increase in 2012 due to a smattering of high-

said. Dealflow is expected to come from a

profile deals, but the region is still a gold

number of sectors, although technology, me-

mine of untapped opportunities, industry

dia and telecommunications are likely to bring

sources said.

the most transactions across the region.

Read the full story online.

Danish private equity dealt blow by new

South Korean corporate restructuring to

punitive tax rules. In its efforts to close

buoy 2013 M&A. Large corporate de-lever-

gaps in the tax legislation the Danish Gov-

aging, a strategic focus on core businesses

ernment has effectively made life difficult

and moves that may improve corporate

for private equity funds active in the Scan-

governance will create merger and acquisi-

dinavian country. The new law, dubbed L10,

tion opportunities in South Korea this year as

means that foreign and local investors could

uncertainty surrounding the presidential elec-

face double taxation on capital returns from

tion fades, Seoul-based deal makers say.

investments in Danish companies.

Read the full story online.

Japan’s trading conglomerates curtail Private equity firms chase China consum-

energy and resources M&A. Japan’s ma-

er deals. Private equity firms are likely to be

jor trading houses will seek to diversify their

the most active in greater China this year as

investment portfolios next year, increasingly

they focus on making new investments, pan-

shifting toward power infrastructure, health-

elists said at the “Asia Pacific Private Equity

care, chemical and consumer retail acquisi-

Outlook” forum organized by mergermarket

tions while curtailing M&A in natural resourc-

in Hong Kong.

es, industry sources said.

Read the full story online.

These articles on international deals are provided by mergermarket. To find more stories like this, please subscribe or inquire about a free trial at mergermarket.

44%

the round News that Matters

vertical view // Technology Add-ons accounted for 62% of IT buyouts in 2012â&#x20AC;&#x201D;the highest percentage ever. California had the most private equity IT investments of any state in 2012 with 33 transactions, nearly double No. 2 Texas with 17; California and Texas also led IT exits in 2012, accounting for almost 25% of exits.

The average private equity IT exit is

60%

Core middle market continues to make up at least 44% of both exit count and capital exited, representing almost 60% in both for 2012.

Software has increased its share of deal flow by 22% since 2008.

$223 million Private equity firms completed 29 secondary buyouts of IT companies in 2012â&#x20AC;&#x201D;the most ever.

Private equity investors realized more computer hardware investments in 2012 than any year since 2005.

The average private equity IT investment is

$175 million

85%-95% Core and lower middle market continue to make up 85% to 95% of IT deal flow.

Private equity deals and capital invested have increased every year since 2009.

Private equity investors closed more computer hardware deals in 2012 than any year since 2007.

All stats are from PitchBook for the middle market (deal values between $25 million and $1 billion).

From 1995â&#x20AC;&#x201C;2009, private capital-backed companies in Florida grew jobs by

252.1%

Private capital helps middle-market companies grow. See how. www.GrowthEconomy.org

S N

BlackEagle Partners and US LBM Holdings Save Jobs and Drive Growth Despite Economic Challenges

Framework of a Deal by Jerry Soverinsky

Photo by Jeff Green

Black Eagle Partners LLC // Founded in 2007, it targets companies in underperforming or distressed industries. There were 76 jobs saved when BlackEagle acquired the debt of Edward Hines Lumber Co. through its portfolio company, US LBM Holdings.

ellow and fraying, the notice was nonetheless legible and prominently displayed near the restroom, instructing employees as to expected workplace rules and conduct, prefaced by its bold “Notice to Teamsters” headline: “Every teamster is held responsible for his chains, stakes, blankets, whip, etc.” “Be sure that the burrs on wagon are tight before leaving yard or mill.” “In case your horses lose a shoe on road, not near yard, go to the nearest blacksmith shop and have shoe put on, get duplicate ticket and hand to barn boss on return.” “Do not water horses when warm.” Date-stamped 1911 on its back, the sign was one of several items Bryan Tolles discovered while surveying the Edward Hines Lumber Co., headquartered in Buffalo Grove, Ill., in early 2010.

Notice to Teamsters // This yellowed and fraying sign, dated 1911, was a piece of history found at the Hines Lumber Co. headquarters near Chicago during BlackEagle Partners’ deal to acquire the company’s debt. View Black Eagle Partner portfolio.

A member of ACG Detroit and vice president of BlackEagle Partners LLC, a private equity firm focused on midmarket acquisitions, Tolles was used to observing dated operations—they stood to benefit most from his firm’s postacquisition management expertise—though a 101-year old sign from a business founded in 1892 was indeed memorable and reflected the nature of the lumber business. “It’s the slowest-moving industry I’ve come across. Change is not something they do,” Tolles says. “In some cases, it’s the same business model from the 1800s.” While there were no signs of horses, whips or blacksmith shops nearby, the well-preserved artifact underscored the challenge facing BlackEagle when it agreed to acquire Hines’ debt through its portfolio company, US LBM Holdings, LLC, halting a planned liquidation by its lender. “It was a distressed sale of a third-generation company,” recalls Jason Runco, a BlackEagle partner. But shortly after the deal closed in March 2010, US LBM deployed new management while investing heavily in the company. The acquisition immediately saved 76 jobs at Hines, and in less than three years spent steering the company through a challenging housing market, US LBM’s efforts had re-established Hines as the leading building products distributor in Chicago, hiring 39 additional employees in the process. It is one of several success stories for the Bloomfield Hills, Mich.-based BlackEagle, whose principals bring more than 100 years of experience working in private equity, investment banking, operations management, and mergers and acquisitions. Founded in 2007, BlackEagle targets companies in a range of industries that are either underperforming or distressed, as well as non-core subsidiaries of large enterprises in outof-favor markets. “So long as one of those two things is in the investment, we’ll take a hard look at it,” Runco says. US LBM is a substantial investment in its portfolio, a holding company that BlackEagle helped create in October 2009.

Photo by Jeff Green

The Deal makers // Left to right: L.T. Gibson of US LBM Holdings and Jason Runco and Bryan Tolles of BlackEagle Partners.

At that time, the housing industry was deep into its decline. As a result, Raleigh, N.C.-based Stock Building Supply, LLC, the second-largest lumber and building materials distributor in the United States, was looking to divest its businesses in Wisconsin, Connecticut and central New York, raising cash to help survive the crisis while focusing on what it considered its core Sun Belt markets. “They were going to sell or shutter the Midwest and Northeast locations,” says LT Gibson, president and CEO of US LBM and a former Stock senior executive, noting closing the sites would have resulted in a loss of nearly 500 jobs spread among 13 locations. Gibson saw value in the divisions and rather than go to work in another part of the trimmed-down Stock, he sought private equity funds to save the three businesses from liquidation. “I met Building Industry Partners … a fundless sponsor that agreed to help us find the right private equity fit,” Gibson says. “We probably met four or five different companies, but BlackEagle was the right fit. We knew it. They had the same view of the industry and a similar view of the company that we thought we could create.”

Partnering with Building Industry Partners, BlackEagle sponsored the formation of US LBM, designating Gibson as president and CEO. The next day, October 31, 2009, it executed its first acquisition, purchasing three divisions from Stock and quickly changing their names from what Stock had called them back to their originals: Bellevue Builders Supply (central New York), East Haven Builders Supply (Connecticut), and Wisconsin Building Supply (Wisconsin). A little more than three years later, all three companies are turning a profit, and the number of employees has increased to 516 associates, a 3.6 percent lift during a period when the industry was otherwise flat.

A Local Focus

Sky High // Three years after US LBM acquired three divisions from Stock Building Supply, each of the companies is turning a profit and the number of employees has increased 3.6 percent.

Since those initial acquisitions, US LBM has pursued a deliberate purchasing strategy, executing five additional acquisitions of lumber and building supply companies that hold No. 1 or No. 2 market share. It’s a straightforward strategy that, following thorough due diligence, allows US LBM to implement turnaround plans shortly after closing the deal. “We’ve gotten better at this,” Tolles says, reflecting on three years of activities and eight acquisitions. “The idea is to approach things on a market-by-market basis, dealing one-to-one with customers while applying best practices to the back office,” Runco says. “We believe the best businesses are locally focused, and we keep each of our companies focused on the local customer to have the speed in decision making and drive local relationships and drive improvements.” It’s an approach that runs contrary to US LBM’s competitors, which he says generally opt for central management. “A lot of the bigger companies in our industries use a central approach, but [we feel] that becomes watered down by the time it reaches the customer,” Runco says. “We embrace the differences in each market, and provide autonomy to the sales and customer relationships while bringing as much synergy and scale as we can to earn the benefits of a large company.”

Photo by Jeff Green

A Fresh Look // US LBM conducts a thorough assessment of each of its new companies, then strives to blend the unique local flavor with its own management and operations expertise to produce the most efficient company possible.

While retaining each company’s local focus, US LBM applies best practices across its portfolio of companies, leveraging its management and operations expertise after doing a thorough assessment of existing processes. “For instance, one company did all of their bookkeeping by hand, including invoices,” an approach that’s not uncommon in the industry, he says. While upgrading accounting procedures is relatively straightforward, others are more substantial. “One company was using a dispatcher to figure routes by hand for all of their driving routes,” he says. “We invested hundreds of thousands of dollars on a new logistics system that automates those logistics … now the dispatcher has computers and finds the most efficient routes possible.” As a building supply veteran, Gibson understands firsthand the challenges facing many of the industry’s established companies, a perspective that enables him to fully appreciate what the BlackEagle team brings to each deal.

“Operationally, they help a lot with strategic plans for the year on what we’re focused on, bringing other-industry experience that we’ve tried to implement,” Gibson says. “The building supply industry hasn’t really changed a lot over the years. We try to bring the newer processes and systems as to how we approach the business.”

Middle Market Growth US LBM’s goal for each acquisition is to find a company that offers growth potential, a scenario that often takes several years to develop. During that time, the focus is never on contraction but one of expansion. “We want to get as big as we can but at the same time build the best company,” Runco says. To that end, most of the company’s acquisitions have saved and added employees (see sidebar)—the total number of saved jobs for companies that faced liquidation was 1,231 through 2012, with 155 jobs created. Meanwhile, US LBM’s corporate employees doubled, from six people in 2009 to 12 people today. And despite industry-wide numbers that have been tepid at best during that period, US LBM’s companies have experienced strong growth. Through targeted hiring, new locations and improved market conditions, US LBM generated $515 million in sales, a 14.4 percent lift from 2011, making the company the seventh-largest lumber and building materials distributor in the United States. It’s an impressive achievement in just more than three years, but one that has not bred complacency. “US LBM remains active adding to its team of talented building material specialists and continues to evaluate addon acquisitions,” Tolles says.

Photo by Jeff Green

Through targeted hiring, new locations and improved market conditions, US LBM generated $515 million in sales, a 14.4 percent lift from 2011, making the company the seventh-largest lumber and building materials distributor in the United States.

Bright Future // US LBM acquisitions have saved 1,231 jobs through 2012 at companies that faced liquidation, with 155 jobs created. It’s own corporate employees doubled during that time, from six people in 2009 to 12 people today.

The BlackEagle Experience Reflecting on the company’s initial success and the contributions that BlackEagle has made, Gibson says the benefits of working with the PE firm extend far beyond each acquisition. “The entire company, they share the same operational commitment— continuous improvement and driving market share,” he says. “They’re not just an equity partner, they’re a strategic partner. We’ll continue down the path we’re going to maximize our growth potential. They bring a lot to the table beyond equity. That’s a great partnership.” // Jerry Soverinsky is a freelance writer and contributor to Middle Market Growth magazine. He may be reached at jerrysoverinsky@gmail.com.

Growth over the years // Since its founding in 2009, US LBM has pursued a deliberate strategy, executing eight acquisitions through 2012:

Status of Target(s) Jobs Saved Prior to Acquisition or Retained

Job Growth

Current Employees

Bellevue Building Supply, East Haven Builders Supply, Wisconsin Building Supply

Liquidation

498 Saved

519

1/6/10

Universal Supply Co.

Ongoing

182 Retained

190

3/31/10

Edward Hines Lumber Bo.

Liquidation

76 Saved

116

April-May 2010

Hines (suburban location), floor and truss manufacturer in Connecticut

Liquidation

13 Saved

5/1/10

Millwood Lumber

Ongoing

22 Retained

TBD

7/6/11

John H. Myers & Son

Uncertain future

142 Saved

145

10/31/11

Lyman Lumber Co.

Uncertain future

515 Saved

605

12/28/12

H and H Lumber Co.

Ongoing

15 saved

TBD

Date

Acquisition

10/31/09

TOTALS

1,259 Saved 187 204 Retained

“Jobs saved” refers to employees at companies that were bought as they were about to close. “Jobs retained” refers to employees of companies that were bought without the threat of liquidation.

To learn more about Black Eagle Partners please visit www.blackeaglepartners.com

1650

The Authority on Middle Market Loans

LO S T T HE

D EAL.

UN DERES T I MATED FI N AN CI N G CERTA I N T Y. I K N O W WHO TO CALL N EX T T I M E.

G O LU B CAPI TAL. OF COURSE. Contact Andy Steuerman, Head of Middle Market Lending 212.660.7280 or asteuerman@golubcapital.com www.golubcapital.com

A fresh look at a winning business model

Franchise Players By Danielle Fugazy

merica Runs On Dunkin’. By now every person in America and beyond has heard that tag line. Dunkin’ Brands, the franchise that is responsible for Dunkin’ Donuts and Baskin Robbins, has created one of the most recognizable retail brands in the world. However, what the average consumer who knows the slogan may not know is that Dunkin’ Brands was owned by a consortium of private equity firms, including The Carlyle Group, Bain Capital and THL Partners, from 2006 until it went public in 2011. While this may surprise some, the fact is private equity firms own a lot of well-known franchises and they are increasingly looking for investment opportunities in the sector. There’s no question as to why private equity firms are taking notice of the franchise model. Franchises are responsible for generating a whopping $2.1 trillion in sales globally per year and despite tough economic conditions, the industry continues to grow, according to the International Franchise Association (IFA). During a time when many companies are pulling back, franchises managed to add 150,000 jobs in 2011 and 167,000 jobs in 2012. The IFA expects continued growth in 2013.

Dunkin Donuts // Since the first franchise was licensed in 1955, it has grown to more than 10,000 restaurants in 32 countries.

“A lot of people think of the Carlyle Group and Bain Capital when they think of private equity involvement in franchising, but there are over 275 private equity firms engaged in various segments of franchising.” Steve Caldeira president and chief executive officer of the IFA

What’s more, the franchise business model is scalable, repeatable, proven and has predictable cash flow — all the attributes that private equity firms like to see in companies they are interested in owning. “A lot of people think of the Carlyle Group and Bain Capital when they think of private equity involvement in franchising, but there are over 275 private equity firms engaged in various segments of franchising,” says Steve Caldeira, president and chief executive officer of the IFA. Argosy Capital, a Wayne, Pa.-based middle-market private equity firm, has been investing in franchises since its founding in 1990. And while 50 percent of retail stores are franchises, there are a number of other types of franchises that are not in the direct retail space, which is mainly where Argosy focuses its franchise buying efforts. Case in point: Argosy has invested in five franchises that may not be household names, but are still strong-performing franchises. Argosy’s investments include Keystone Retaining Walls, which is in the construction space, Great Clips, a hair cutting company, Eldorado Stone, a construction company, AmBath/ReBath, a manufacturer of bathtub liners, and Atlantic Aviation, an operator of general aviation support services. “Buying a franchise is a good strategy,” says Kirk Griswold, a founding partner with Argosy Capital, which has $500 million under management. The statistics are hard to ignore: 97 percent of new franchises are still in business after five years compared with only 38 percent of non-franchise start-up businesses. It’s the mechanics of a franchise that makes them successful. “When a franchise opens, there’s a training program and a process. It’s a system that’s been built and tweaked and can be replicated,” Griswold says.

ROARK CAPITAL GROUP // Cinnabon is one of five popular franchises in its FOCUS brands, operating more than 1,000 locations worldwide.

Middle-market private equity firm Roark Capital Group has created one of the strongest presences in the franchise arena. In 2004, the Atlanta-based firm launched FOCUS Brands, which houses its five well-known franchises: Carvel, Cinnabon, Schlotzsky’s, Moe’s Southwest Grill and Auntie Anne’s Pretzels. These brands have performed well under Roark’s ownership. Despite continuing economic headwinds, FOCUS Brands has managed to increase its number of restaurant locations by an impressive 90 percent (see chart) over the last five years. Russ Umphenour, president and CEO of FOCUS Brands, says Roark has played an instrumental role in FOCUS Brands’ growth. “They help with the strategic thinking that goes into making acquisitions and the analytical process of how we look at the overall business,” Umphenour says. “It works because they are coming at things from a different perspective, which brings a diversity of ideas and opinions for us to talk about and think through. They are not active day-to-day, but what they do provide is invaluable.”

FOCUS Brand unit growth 3,800 3,400 3,200

2,000

2008

2,100

2009

2010

2011

2012

Umphenour says Roark typically helps with supply chain direction, identifying acquisition targets, franchise sale strategies and the overall prioritization of strategic initiatives. “Roark will bring acquisition ideas to us, identify our brands’ strengths and help us leverage them. They also introduce us to their contacts,” he says. This can all give a franchise an advantage, which can go a long way toward keeping franchisees happy. Observers who believe franchises run themselves are mistaken. It takes constant effort on the franchisor’s part to keep the franchisees content and generating revenue. Franchisors get an initial payment when a franchisee buys into a system, but the franchisor also receives recurring revenues from the franchisee based on their sales. “Franchisees have to be able to make money and feel that they are making a reasonable investment in the brand. Not only is the franchisee buying the brand, but they are also paying the franchisor every month. They have to feel satisfied,” Griswold says. “There are a lot of ways to add value

whether it’s with new products, marketing, regulatory information or legal support. Franchisee satisfaction is paramount. There’s always that question of what have you done for me lately.” Having to keep franchisees happy is just one of the differences between buying a franchise and a standalone company. Franchisors also have to understand the brand, its value proposition and how geography will play a role in the business model. For example, the franchisees who bought Starbucks franchises were none too happy when the Starbucks franchisor started selling its coffee into local supermarkets at a lower cost. Additionally, the majority of growth in franchises comes from adding new stores. However, that has to happen without cutting into the profits of existing stores. “How many additional franchises can an area support without cannibalizing the neighboring franchisee? There’s a balance,” warns Griswold. What’s more, the brand popularity can vary from location to location, so franchise sales may not be strong everywhere. For example, Argosy’s former portfolio investment, franchisor AmBath/ReBath, refinishes old bathtubs with new acrylic liners. This business model works great in housing markets where there are older homes like there are in the Northeast. It does not work as well in newer construction areas. “In areas where there are only new homes, AmBath’s hit rate decreases,” Griswold says. “The bottom line is that a franchise that works great in New York may not work well in Dallas.”

starbucks // The first of its coffeehouses opened in 1971 in Seattle’s historic Pike Place Market. There are now close to 18,000 retail stores in 60 countries.

“Franchisees have to be able to make money and feel that they are making a reasonable investment in the brand. Not only is the franchisee buying the brand, but they are also paying the franchisor every month. They have to feel satisfied.” Kirk Griswold a founding partner with Argosy Capital, which has $500 million under management.

To understand all the potential pitfalls, due diligence is a must. “At the end of the day, any PE firm worth its salt will do its due diligence. A potential buyer needs to look at current management, expenses, policies and industry metrics,” Caldeira says. Despite the challenges of owning a franchise and tenuous economic factors, all of the indicators point to private equity involvement being welcomed in franchising going forward. “We have had slow but steady growth, but we could be doing a lot better. There’s a lot of economic uncertainty with the tax issues and while improving slightly, there is still a lack of capital to meet the forecasted demand for franchised, small businesses. This makes private equity involvement of greater interest to some of our members,” Caldeira says. “We have been dealing with a host of pending legislative and public policy issues and yet the franchise industry remains strong. The key to a good match between a buyer and franchise is thorough preparation, good communications and ultimately, strong execution on both sides.” // Danielle Fugazy is a freelance writer and contributor to Middle Market Growth magazine. She may be reached at dfugazy@fugazygroup.com. To learn more about the potential of franchising please visit the International Franchise Association.

How deep is Hilco’s knowledge of the metals sector?

09/14/12 Hilco Purchase Completed Sparrows Point Mill 3400 Acres; Baltimore County, Maryland

Deep enough that we put our money where our mouth is. Monetization l Acquisition l Disposition l Asset Valuation Inventory l M&E l Real Estate l Intellectual Property Hilco’s team has a unique cumulative understanding of the metals marketplace that enables us to deliver the most holistic creative solutions possible. The net result is more value to the customer. In fact, with our acquisition of one of North America’s largest steel mills at Sparrows Point, we risked our own capital based on the strength of our total market knowledge. Contact our team today and test our metal.

Gary C. Epstein

Chief Marketing Officer

847.418.2712 / gepstein@hilcotrading.com / www.hilcotrading.com

a qualified opinion Scott J. Wall CTP, vice president, Corporate & Institutional Banking, PNC Financial Services Group, and president, ACG Orlando

rawing on more than 16 years of financial services industry experience, Scott Wall talks to Middle Market Growth about the state of business in Florida. Wall is vice president of corporate banking in the corporate & institutional banking sector for PNC Financial Services Group, where he provides a broad range of financial products and services to middle-market clients. He also serves as president of ACG Orlando.

select above to see q&a

How does Florida foster investment and business development?

think Florida emphasizes a handful of competitive advantages. We don’t have personal income tax, our state is a “right to work state,” and we are seeing the success of a large and growing state university system with campuses, for the most part, in every major state market. It’s a business friendly state—we were ranked fifth in the Tax Foundation’s State Business Tax Climate Index on tax-friendly states. Additionally, Florida is attracting diverse labor talent and experiencing a growing population. So it’s no wonder that Florida is known by many consumer brands as one of the premier test markets around the country. Combined with our gateway to international markets, top talent and robust port system, the opportunities become very interesting. Investment seems to be happening more in our larger population areas. These include the coastal regions from Jacksonville down to Miami and from Naples through Tampa. I would add the I-4 corridor from Tampa through Orlando as well. We have seen some large regional investments throughout the state that should drive capital deployment, investment and job growth for years to come. Photo by Cy Cyr

a qualified opinion Scott J. Wall CTP, vice president, Corporate & Institutional Banking, PNC Financial Services Group, and president, ACG Orlando

select above to see q&a

What advice would you give to non-Florida residents about M&A opportunities in Florida?

hile we have our fair share of larger companies, Florida is comprised to a large extent of small business and middle-market companies. At PNC we find that many of these companies are family owned, with the founder from the Baby Boomer generation. These business owners are either passing on ownership to younger generations, or actively seeking an exit strategy for retirement. We think there are tremendous opportunities with this dynamic, particularly given a growing educated work force, access to overseas markets and a tax-friendly state approach, which helps with attracting capital and jobs.

Photo by Cy Cyr

a qualified opinion Scott J. Wall CTP, vice president, Corporate & Institutional Banking, PNC Financial Services Group, and president, ACG Orlando

select above to see q&a

What industries are experiencing the most growth? Â What role does M & A play in that growth?

hile this perspective may be biased on our Central Florida economy, I can tell you that we see pockets of strength in healthcare, distribution, manufacturing, hospitality, tourism, logistics, technology and education. The healthcare space seems to be consolidating and changing, and within some of the other industries above we do see opportunistic M & A activity.

Photo by Cy Cyr

a qualified opinion Scott J. Wall CTP, vice president, Corporate & Institutional Banking, PNC Financial Services Group, and president, ACG Orlando

select above to see q&a

In what sectors are your clients choosing to invest?

t PNC, we see clients investing in technology, equipment, human capital and research & development. In addition, where it makes sense to pick up revenue growth and/or market share, companies are on the hunt for acquisitions. One thing is clear in regards to new investment: Companies are closely analyzing their ROI and working hard to make smart decisions that offer a compelling strategic return or quick payback. Capital seems to be moving more efficiently in this process and buyers are more than ever focused on return.

Photo by Cy Cyr

a qualified opinion Scott J. Wall CTP, vice president, Corporate & Institutional Banking, PNC Financial Services Group, and president, ACG Orlando

select above to see q&a

How has being a member of ACG helped you connect to the right people to forge successful M&A opportunities?

y involvement with ACG has provided me with incredible connectivity that has led to the creation of some wonderful friendships and business relationships. The organization is all about connecting professionals within the middle market, deal flow and capital deployment. Personally, I have forged strong relationships with specialists and professionals aligned in many facets of M & A and within particular niche sectors that are both local to our Orlando market, as well as all over the country and beyond. My employer, PNC, has been a big supporter of ACG around the country. This has created good synergy, given the bank plays in some form or fashion in many of ACGâ&#x20AC;&#x2122;s chapter markets. For M & A professionals and corporate c-suites alike, ACG offers a way to quickly plug into a deal community and create relationships. Itâ&#x20AC;&#x2122;s just that simple.

Photo by Cy Cyr

Mc Gl adr eyQuar t er l yDeal F l owPr ol es Ac l os erl ooka tPEa c t i v i t yf ort hec ons umerpr oduc t sa nds er v i c es , bus i nes s pr oduc t sa nds er v i c es , I Ta ndhea l t hc a r ei ndus t r i es . Power edbyPi t c hBook .

F ol l owusonT wi t t er : @Mc Gl adr eyPE

acg@work chapter news from around the globe

LONDON CLEVELAND LOS ANGELES AUSTIN, Texas

tap cities to navigate to article Learn more about ACG’s global chapters.

LONDON Save the Date: EuroGrowth® Join dealmakers from around the world this November in London for ACG’s 2013 EuroGrowth. This event is a chance to engage with the European marketplace and explore trans-Atlantic deals. Similar to ACG’s annual InterGrowth conference, EuroGrowth presents an opportunity for networking among private equity professionals, interand development officers doing business in the UK and across Europe.

Austin, Texas ACG Central Texas

To learn more, please e-mail events@acg.org.

Last fall, ACG Central Texas

mediaries, lenders, deal lawyers and accountants, corporate executives

hosted Toast to Private Equity in the Stephen F. Austin hotel in

Tell Us WHAT’S HAPPENING // Middle Market Growth wants to highlight ACG chapters around the world. Please share your recent chapter events or notable member news in 250 words or less along with a color photo if available to editor Kristin Gomez at kgomez@acg.org.

downtown Austin. Attendees from across the state took part to honor Texas’ leading private equity investors for their contributions to the Texas economy.

acg@work chapter news from around the globe lOS ANGELES

ACG LA Members Spearhead MNX’s Acquisition by the Riverside Company “I regularly attend ACG functions across western states, and not only have I made great relationships, I’ve been introduced to a lot of opportunities as well.”

When lives are at stake, people don’t

Jeremy Holland the Riverside Company’s regional director, origination, ACG LA member

and external acquisition,” Dailey says.

normally think of logistics. But that’s not

Representing MNX was MNX’s legal

the case for MNX, the Los Angeles-based

counsel of record, Greenberg Glusker, led

provider of specialized, expedited trans-

by ACG LA member Richard Hong. Hong

portation and logistics services. During

also was impressed with The Riverside

its nearly 30 years of operations, MNX

Company’s approach.

has earned the reputation as an industry

“Having worked with MNX for so many

leader in the delivery of critical-need

years, I am familiar with Scott Cannon’s

shipments—including biopharmaceutical

unwavering dedication to MNX, which ul-

and life sciences materials—where on-

timately led MNX to being a world-leader

time performance is crucial.

in logistics,” Hong says. “In our negotia-

ACG Los Angeles member Jeremy

tions with Riverside, they presented a

Holland, The Riverside Company’s re-

compelling package to help the company

gional director, origination, attended

in reaching its long-term growth strate-

a 2012 spring ACG Los Angeles mixer

gy.” Hong was assisted by associate Rich-

and learned about MNX through fellow

ard Sweet (a member of ACG Los Ange-

members. “Based on MNX’s size, strong

les’ Rising Star program, Class of 2013).

management, and leadership position in

Closed on Nov. 2, 2012, the deal will

a niche, third-party logistics vertical, the

leverage Riverside’s relationships, know-

company profile fit our initial criteria,”

how and financing to aid MNX’s expan-

Holland says. “I regularly attend ACG

sion into Asia Pacific and continued

functions across western states, and not

growth in domestic business lines, as well

only have I made great relationships, I’ve

as building strategic opportunities in

been introduced to a lot of opportunities

Europe and Latin America.

as well.” Holland set up a meeting with MNX’s

ACG member Lisa Lathrop of the law firm Jones Day performed legal diligence

board, along with CEO Scott Cannon and

on behalf of The Riverside Company.

the company’s shareholders, to discuss

Information technology diligence was

the opportunity with Riverside’s deal

completed by ACG Chicago member John

team, led by Riverside partner Matt Dai-

Abernathy of West Monroe Partners,

ley. “It was clear from the start that MNX’s

and ACG Cleveland member Jeff Schwab

management shared our growth philoso-

handled corporate diligence for his firm,

phy in terms of both internal expansion

Oswald Companies. //

acg@work chapter news from around the globe

Cleveland Top Cleveland-Area Deal Makers Honored Organizations deemed the best engines of growth during 2012 were recognized at the 17th Annual ACG Cleveland Deal Maker Awards on Jan. 31 for their significant corporate growth and deal-making activities in Northeast Ohio. The award winners were:

RPM International Inc.

Check out the creative video ACG Cleveland developed to promote its event.

RPM is a holding company

Blue Point Capital Partners

STERIS Corporation & US Endoscopy, Inc.

that owns global specialty

Private equity firm Blue

During the past 24 months,

coatings businesses, includ-

Point’s investment activity

STERIS, a leading provider

ing recognized consumer

during the last two years

of infection-prevention

brands Rust-Oleum, DAP

has been robust, with four

products and services, has

and Zinsser. During the last

new platform investments

engaged in more than $425

18 months, RPM closed nine

and four divestitures. New

million in M&A activity.

acquisitions, including deals

companies include JTM

Most notable was its acquisi-

in Brazil, Australia, Germa-

Foods, Alco Manufacturing,

tion of US Endoscopy, which

ny, Spain, and Italy, and four

Selmet and Smith-Cooper.

expands STERIS’ presence

in the United States, adding

Recent exits include Apex

in the gastrointestinal

more than $400 million to

Companies, Packers Sani-

market. As a subsidiary of

its annual revenues. These

tation Services, Legend

STERIS, US Endoscopy will

transactions extend RPM’s

Brands, and Quality Syn-

gain the size and scale nec-

reach into new markets

thetic Rubber.

essary to continue to inno-

around the world.

vate and grow globally.

APRIL 22-25, 2013 | ORLANDO, FLORIDA

Networking 2.0: The High Five

The high five is the go-to celebratory gesture for a job well done. Variations include the “up high,” the “down low” and the playful “too slow.” And, it is one way to signal the start or end of a new deal. Get your high-five on at InterGrowth 2013.

Corporate Finance | Investment Banking RGL Advisors delivers strategic counsel to business owners, executives and private equity firms. Whether helping to navigate the competitive landscape or execute a transaction to fuel value-added growth, we offer broad industry and situational expertise through an approach tailored to meet the unique needs of clients. For more information, contact: Matt Morris Managing Director

T: 972.996.3373 E: mrm @ rgladvisors.com

RGL Advisors, LLC 5215 North O’Connor Blvd., Central Tower, Suite 640 | Irving, Texas 75039 T 972.996.3370 F 972.996.3371 rgladvisors.com

■

Buy-side and sell-side M&A advisory

■

Financial opinions to fiduciaries

■

Sourcing of acquisition financing

■

Recapitalization of investments

the portfolio insight from the experts

PE LAW

sound decisions

by the numbers

tap buttons to navigate columns

Choose the Right Team, Tackle M&A Issues Early and Make Sure the Numbers Add Up IN THIS ISSUE pe law Sid Feltenstein, franchising legend and one of many high-profile clients of leading private equity firm Duane Morris LLP, was recently interviewed by two of the firm’s attorneys, George Nemphos and Wil Sirota. The topics ranged from emerging trends and changing economics to the fluctuating customer tastes that make franchising a dynamic and profitable sector for private equity today.

sound decisions Mergers and acquisitions have played an increasingly prominent role in corporate growth strategies in recent years. Many companies view M&A as a viable, though complex, mechanism to quickly achieve a number of objectives, such as grow their product line, enter into new markets, and/or fuel long-term corporate growth. Done well, it is proven to be a very effective strategy.

by the numbers Selling a franchise is harder than ever as a result of the scrutiny that comes along with any deal-making process these days. In today’s much more prudent environment, buyers are taking their time to better understand what they are buying by completing more thorough due diligence processes. Could that be why only 46 corporate franchises changed hands during the past two years?

COMING SOON Be sure to check out the Portfolio section of the May issue to read more on the latest middle-market trends written exclusively for Middle Market Growth by our team of expert ACG Partners. To learn more about contributing to this section, please contact Meredith Rollins, Tel: (312) 957-4260 or Ellen Moore, Tel: (312) 957-4274. These articles are brought to you by ACG’s Official Sponsors of GrowthSM.

the portfolio pe law // George Nemphos and Wil Sirota, partners, Duane Morris LLP

PE LAW

sound decisions

by the numbers

tap buttons to navigate columns

Evaluating New Market Opportunities

S Private Equity Plays Key Role in Franchise Development

id Feltenstein, franchising legend and one of many high-profile clients of leading private equity firm Duane Morris LLP, was recently interviewed by two of the firm’s attorneys, George Nemphos and Wil Sirota. The topics ranged from emerging trends and changing economics to the fluctuating customer tastes that make franchising a dynamic and profitable sector for private equity today. Duane Morris: Sid, it’s great to have the op-

Duane Morris: You’ve seen a lot of change

portunity to speak with you for the inaugu-

over the past few years. What’s different

ral edition of ACG’s Middle Market Growth

today with regard to the marketplace, fran-

magazine. In your opinion, what is private

chise culture or other key indicators?

equity’s key role in the emerging franchise

SF: Franchising is a great barometer of the

universe today?

consumer market, but also of the financial

SF: I think private equity has been a game

markets, and a reflection of culture in the

changer—and as a source of capital it’s

broadest sense. When we talk about chang-

going to become even more important over

ing consumer tastes, some of what we’re

the next few years, partly because private

seeing reflects the wild swings in the finan-

equity is all about cash flow. On one side,

cial markets over the past few years, with

concepts need capital to expand, and there

a resulting negative impact on consumer

are strategic add-ons that help accelerate

confidence. Some of that has been good for

the scale-up of these concepts to become

mass market fast food franchisors, but at

regionals, super-regionals and national

the same time you’re seeing the rise of hot

players. At the same time, I’m seeing pri-

segments that are a direct result of chang-

vate equity coming in at the store level –

ing demographics. What stays the same is

bundling up big blocks of units, sometimes

this: It’s rare to talk with a franchisor today

large chunks of company-owned stores, for

who doesn’t focus on programs and prin-

example, from large franchisors. On the

ciples that drive franchisee profitability.

franchisee side, private equity will come in, buy those blocks of stores, allow the franchisee to cash out, bring in some new operational capability, and take cash flow to a completely different level.

the portfolio pe law // George Nemphos and Wil Sirota, partners, Duane Morris LLP

PE LAW

sound decisions

by the numbers

tap buttons to navigate columns

Sid Feltenstein

George Nemphos

Duane Morris: So it’s a hard focus on making

Envy, which started in 2002 from nothing

the franchisee the best operator it can be?

and today has about 800 units. It was pur-

SF: Exactly. Franchisors today need to focus

chased about two years ago by a private

aggressively on the business model—unit

equity fund called Sentinel Capital. In two

economics—to assure that a properly run

years, its EBITDA almost tripled and was

franchise can provide a handsome return

sold at a huge multiple-producing a mas-

for the franchisee. For example, most fran-

sive return for the investors. This type of

chisors invest in a real estate model that

franchise was also a category creator, offer-

enables them to work with the franchisee

ing affordable massages. It’s been amazing

to identify the best possible location for the

to watch! //

concept. It’s a regression model, where they take the best stores, determine the optimal

George Nemphos is corporate head and co-

characteristics, the prime demographics,

chair of private equity at Duane Morris LLP,

and pump all that data through their sys-

and also serves on the governing Partners

tem to help the potential franchisee make

Board. Wil Sirota is chair of Duane Morris’

the right real estate decision.

Baltimore office, practicing in the area of corporate law with a focus on mergers and acqui-

Wil Sirota

Duane Morris: What is the most interesting

sitions, venture capital and general corporate

franchising situation you’ve been involved

and tax law. Sid Feltenstein is an operating

with in your career?

partner of Sentinel Capital Partners. He has led

SF: I guess it’s the company Wil and I

private equity investment groups in multiple

worked on together, Yorkshire Global

franchise transaction, including the operating,

Restaurants. We took two very troubled

marketing and turnarounds of the largest fast

companies that had great brand equity but

food franchisors, such as including Burger

weren’t managed properly. We recognized

King and Dunkin’ Donuts.

the opportunities and capitalized on them by putting together a great team to execute our strategy. It was immensely successful from the standpoint of the investors, but also because of the guidance provided by Duane Morris. It was probably, when you look at the last 10 or 15 years, one of the more successful transactions in my career. I was also involved recently with Massage

the portfolio Sound decisions // Richard A. Martin Jr., senior director and head of global marketing, Merrill Corporation

PE LAW

sound decisions

by the numbers

tap buttons to navigate columns

Due Diligence Key to M&A Success

M Invest the time to ensure deal proceeds smoothly

ergers and acquisitions have played an increasingly prominent role in corporate growth strategies in recent years, a trend that is likely to keep growing in the future. Many companies view M&A as a viable, though complex, mechanism to more quickly achieve a number of objectives, such as grow their product line, enter into new markets, and/or fuel long-term corporate growth. Done well, it has proven to be a very effective strategy. Done poorly, it can be a financial disaster. One of the reasons M&A transactions

As the first step, all buyers are best

fail is an inability to quickly identify all

served by investing the time to develop

the potential areas early in the discovery

a sound acquisition strategy and testing

process where the newly merged organiza-

it through experience and feedback from

tion achieves substantial cost savings. The

other seasoned deal advisors. Also, perfect-

element of time becomes a cruel taskmas-

ing your due diligence process and uncov-

ter here, and unless all areas of synergy

ering the real facts and factors that may

savings are discovered within a reason-

exist in an M&A transaction is equally

able period of time, the potential for â&#x20AC;&#x153;deal

important. However, the pressure to close

fatigueâ&#x20AC;? is heightened. When this occurs,

the deal in a compressed timeframe while

the likelihood that one or both parties will

getting to the truth is becoming much more

have the fortitude to complete the process

complicated. Many times in the euphoria

diminishes, leading to a failed agreement.

and momentum of closing a transaction, an

Therefore, it becomes imperative that both

acquisition may not seem at all what it was

buyers and sellers quickly leverage infor-

positioned to be in the initial analysis.

mation resources and tools that will uncov-

Understand the full set of opportunities

er all synergy savings opportunities, allow-

before moving forward. Since stakes have

ing the discovery process to move forward

changed in M&A due diligence over the past

and the M&A transaction to be completed.

few years and the growing interest in crossborder investments, increasing regulation and a competitive marketplace have all complicated M&A transactions. The pressure is on for buyers to quickly identify attractive targets, conduct thorough due diligence and close the deal in shorter time frames.

the portfolio Sound decisions // Richard A. Martin Jr., senior director and head of global marketing, Merrill Corporation

PE LAW

sound decisions

by the numbers

tap buttons to navigate columns Regardless of your company’s size or the

Richard A. Martin, Jr.

The most successful acquirers invest in

scope of a pending transaction, preparation

experienced professionals and technology

is imperative early in the pre-transaction

that help them more quickly get to the most

period, so take advantage of data room

important factors in pursuing a transac-

technology. By working with a virtual data

tion. As the seller considers bidders, those

room, transaction teams can scan and index

with industry experience often have an

all relevant documents and create a logical,

advantage. Their diligence teams may be

centralized electronic due diligence library

more detailed in their investigations, and

that is remotely Web-accessible, secure,

may be asking tougher questions, but this

searchable and easy to update and amend.

is often viewed as a plus by sellers who are looking for committed partners who can

“One of the reasons M&A transactions fail is an inability to quickly identify all the potential areas early in the discovery process where the newly merged organization achieves substantial cost savings.”

help them grow their business. Successfully completing an M&A transaction is a complex process. Take the time to develop a well-thought-out acquisition strategy; conduct thorough due diligence and plan in advance for a sound integration strategy. // Richard A. Martin, Jr. is a senior director at Merrill Corporation, responsible for Merrill DataSite’s global marketing group. His 18 years of marketing experience in the United States, United Kingdom and Europe has

A smooth, well-planned due diligence process with a highly structured indexing methodology and the right virtual data room technology is much more likely to ensure that all required disclosures are made to the right parties and that the transaction is optimally managed and controlled.

developed Martin’s understanding of disparate business cultures and the global financial industry. Martin currently works with financial professionals to provide first class virtual data room solutions for their transaction and due diligence needs.

the portfolio by the numbers // Wade Kruse, partner with Grant Thornton LLP

PE LAW

sound decisions

by the numbers

tap buttons to navigate columns

Get Your Franchise Ready for Sale

S Important Steps that Every Seller Must Take

elling a franchise has become harder than ever as a result of the scrutiny that comes along with any deal process these days. In today’s much more prudent deal-making environment, buyers are taking their time to better understand what they are buying by completing more thorough due diligence processes. That’s part of the reason why only 46 corporate franchises changed hands during the past two years, according to Pitchbook. That said, there are steps you can take

Additionally, not only will this process

as a seller to ensure potential buyers are

better prepare you to weather the scrutiny

interested in your franchise; your advisors

of the buyer due diligence, if performed

run a smooth sale process; and you receive

correctly if should also help to limit buyer

a strong valuation.

due diligence, keep multiple buyers in the

1. Buyer education. Buying a franchise can

process longer, and ultimately drive a high-

be expensive. However, there is inherent

er price.

value performed because of the built-in

3. Know your business. Be able to answer

brand that comes with it. It’s also impera-

important questions such as: Has revenue

tive the buyer understands that buying a

moved significantly? Have any units been

franchise is not just buying a company, but

recently opened, closed or been remod-

rather a system with processes in place,

eled? Buyers will question the reliability

which ultimately makes owning a franchise of revenue and profit projections. Start an easier proposition than starting from

with proof of revenue by linking revenue

scratch.

to deposits. Additionally, use third-party

2. Due diligence. Even before you put your

vendors’ reports to document business

franchise up for sale, consider conducting

expenses so buyers see that the costs align.

your own sell-side due diligence. With a

Payroll reports should correspond with

sell-side due diligence process, an account-

labor costs. Similarly, facility costs need to

ing firm will apply much of the same pro-

be reconciled to lease agreements.

cesses it would use when employed on the buy-side. This will uncover any issues that a buyer might find sooner rather than later so they can be addressed.

the portfolio by the numbers // Wade Kruse, partner with Grant Thornton LLP

PE LAW

sound decisions

by the numbers

tap buttons to navigate columns

Wade Kruse

4. Do the math. Sellers need to know what

but earned no profit for several months due

revenue and cost numbers really represent.

to construction. Sellers will want to add

Ask yourself questions like: Whatâ&#x20AC;&#x2122;s the

back that profit and normalize revenue and

impact of seasonality? Are a handful of

earnings for it.

units or certain locations driving high or

6. Get started on the paperwork. Every fran-

low margins? Buyers will want to see same-

chise needs to keep current and accurate

store sales analyses, year over year. As a

financial and legal records. A surpris-

seller, understand why some units consis-

ing number of transactions fail because

tently outperform others.

the financial statements do not support owner income, operating expenses and

Sellers need to know what revenue and cost numbers really represent. Ask yourself questions like: Whatâ&#x20AC;&#x2122;s the impact of seasonality? Are a handful of units or certain locations driving high or low margins?

future earnings potential. Finally, and perhaps most importantly, get your advisors involved early. Your M&A tax CPA and attorney can help you think through deal structuring ideas years in advance of your transaction. Your accountants and investment banker will help you understand the value of your business and help you determine if you can benefit from sell-side due diligence. These tips will ensure you approach a sale fully prepared for a buyerâ&#x20AC;&#x2122;s scrutiny and achieve the goals of your transaction. //

Additionally, a buyer will compare franchise, royalty and advertising expenses to

Wade Kruse, is a partner in the Transaction Ad-

the franchise agreements, so make sure all

visory Services practice of Grant Thornton LLP,

costs are reconciled.

leading the southeast region. He has led hun-

5. New or improved? Resets, openings and

dreds of transaction advisory services projects

closings play a significant role in negotia-

for private equity and strategically acquisitive

tions and accurate cash flow projections. If

corporate clients over the past decade.

a new unit earned only $100,000 in its first year, but is expected to earn $200,000 annually, you may request credit for that higher run-rate. A remodeled restaurant, for example, may have a history of strong sales,

SNR Denton is proud to be joining Salans and Fraser Milner Casgrain (FMC) as a foundational member of the new firm Dentons. With 79 locations in 52 countries, this combination unites the pre-eminent corporate finance practices from all three firms to create the largest global transactional law practice, by number of lawyers, with experience across the globe. Dentons’ Corporate and Business Transactions team comprises more than 400 lawyers worldwide. They provide clients with the global reach and local presence to advise on the full complement of legal issues associated with commercial transactions, corporate finance, corporate governance and tax matters.

We serve the transactional legal needs of entities in every industry sector.

Contacts Margaret Kavalaris

Walter Van Dorn

Partner Washington, DC D +1 202 408 6448 margaret.kavalaris@snrdenton.com

Partner New York D +1 212 768 6985 walter.vandorn@snrdenton.com

On November 28, 2012, the partners of SNR Denton voted to combine with international law firm Salans and Canadian law firm Fraser Milner Casgrain (FMC) to create Dentons—a new Top 10 international law firm with more than 2,500 lawyers and professionals in 79 locations in 52 countries—to launch first quarter of 2013. For more information, visit dentonscombination.com.

© Copyright 2013 Salans, FMC and SNR Denton. This information relates to a proposed combination of Salans LLP, Fraser Milner Casgrain LLP and SNR Denton Group (A Swiss Verein), and their members and affiliated undertakings, which has not yet been consummated by the constituent firms or otherwise become effective.

the ladder ACG MEMBERS ON THE MOVE Jim Brendel of ACG Denver has

Eric Coonrod of ACG Los An-

assumed the role of partner-in-

geles was recently promoted to

charge of the Denver office of

director at CREO Capital Advi-

Hein & Associates. Jim has been

sors, LLC.

with the firm for more than 25 Jim Brendel

years, and most recently served

Eric Coonrod

as national director of audit and

Clifton Yen of ACG New York

accounting.

was promoted from vice president to director with AlixPart-

Steve Stauffer of ACG Utah

ners. His focus includes opera-

was recently named managing partner of the Salt Lake City office of Grant Thornton LLP, a

tional turnaround for business Clifton Yen

specialty in procurement/indi-

global public accounting firm.

rect cost reduction.

Steve Stauffer

Kevin Bader of ACG Cleveland

Jessen L. Gregory of ACG

was promoted from analyst to

Denver was made a partner with

associate at MelCap Partners,

Gregory & Plotkin, LLC. The

LLC, a boutique investment

firm specializes in corporate law, mergers and acquisitions, private Jessen L. Gregory

equity, taxation and commercial

and consumer services with a

banking firm in Medina, Ohio. Kevin Bader

and corporate litigation. Ryan R. Miske of ACG Minnesota has become a partner

David B. Bernsohn and Doug-

of Faegre Baker Daniels LLP. As part of the corporate group, Ryan specializes in mergers and Ryan R. Miske

las P. Howard of ACG Maryland David B. Bernsohn

acquisitions, private equity, com-

and both of the Corporate Practice Group of Duane Morris LLP in Baltimore, have

mercial transactions and general

been promoted to partner.

corporate counseling.

Douglas P. Howard

To submit your promotions, job changes and other accomplishments to the Ladder section of Middle Market Growth, please send information and a color headshot to editor Kristin Gomez.

the ladder ACG MEMBERS ON THE MOVE Todd Kinney of ACG New York

Garrett Alton of ACG Atlanta

and BDO USA, LLP was named

and BNY Mellon Wealth Man-

relationship director for the firmâ&#x20AC;&#x2122;s

agement was promoted to re-

National Private Equity practice.

gional sales manager for Central and Mid-Atlantic U.S. markets in

Todd Kinney

Garrett Alton

a newly created position.

John Corrigan III of ACG Cleve-

John Corrigan III

land and CapitalWorks, LLC

Alexander Travis of ACG Min-

was recently promoted to senior

nesota was hired by Northstar

associate. Prior to CapitalWorks,

Capital as an investment man-

he worked for Ernst & Young in

ager. He will focus on investment

its Transaction Support group.

origination activities. Alexander Travis

W. Todd Martin of ACG Cleve-

Jeffrey J. Groen, CPA/ABV,

land and CapitalWorks, LLC was

CFF, CGMA, MST, of ACG De-

recently promoted to partner. He

troit and managing partner of the

has been a major contributor in

Troy-based firm Groen, Kluka

the last two CapitalWorks priW. Todd Martin

vate equity funds, playing roles that included deal execution and

& Company, P.C., was elected Jeffrey J. Groen

America board of directors of

governance.Â

CPA Associates International, Inc. (CPAAI).

John David Spiller Jr. of ACG

John David Spiller Jr.

chairman-elect of the North

Atlanta and Miller & Martin was

Richard Bodson of ACG Na-

promoted to member status. Prior

tional Capitol and a 30-year

to joining Miller & Martin in 2012,

veteran of federal IT and man-

John practiced law in Austin,

agement consulting services has

Texas, with the Supreme Court of

joined Subsystem Technologies

Texas and with the firm Graves, Dougherty, Hearon & Moody.

Richard Bodson

(SUBSYSTEMs) as president, responsible for all company management under the CEO.

To submit your promotions, job changes and other accomplishments to the Ladder section of Middle Market Growth, please send information and a color headshot to editor Kristin Gomez.

the ladder ACG MEMBERS ON THE MOVE

Ryan Davis

Ryan Davis of ACG Pittsburgh

Ian Jackson of ACG Los An-

has joined Main Street Capital

geles was named as vice presi-

Holdings, LLC, a private invest-

dent of operations at TaskUs,

ment firm specializing in ac-

a rapidly growing provider of

quisitions of growth-oriented

outsourced business solutions to

companies. Davis brings to Main

Ian Jackson

Street more than a dozen years

Ray Anderson of ACG Chicago

of mergers and acquisitions and

has been promoted to manag-

private equity experience.

ing director at Huron Consulting

Aziz El-Tahch, CFA, of ACG

Group. Ray bring more than 20

New York has been promoted

years of experience to provide

from director to managing direc-

Aziz El-Tahch

Ray Anderson

strategic leadership to clients

tor in the Valuation & Financial

facing challenges due to growth

Opinions Group. He is based

or financial distress.

in the firm’s New York office.

Jack Steele of ACG Boston has

His concentration is in ESOP &

joined Pierce Atwood LLP as a

ERISA advisory services.

partner in its Business Group. Jack will focus on assisting cli-

Catherine Smith of ACG DallasFort Worth was promoted to the director of marketing at V-

ents with the acquisition, financJack Steele

ing and operation of companies in the areas of mergers and acquisi-

Rooms Virtual Data Rooms and

tions, securities, private equity

recently won the Employee of Catherine Smith

mid-sized internet companies.

and venture capital financings.

the Year award.

Denis O’Sullivan of ACG National Capital joins Convergent Wealth Advisors as a managing director based out of the company’s Washington, Denis O’Sullivan

D.C., headquarters.

To submit your promotions, job changes and other accomplishments to the Ladder section of Middle Market Growth, please send information and a color headshot to editor Kristin Gomez.

the ladder ACG MEMBERS ON THE MOVE

Andrew Redmond

Andrew Redmond of ACG

Sam Wright of ACG Charlotte

Boston and TM Capital, a lead-

and Dixon Hughes Goodman

ing middle market investment

LLP was recently promoted to

bank based in Boston, New York

director of transaction advisory

and Atlanta, was promoted to

services.

vice president, effective January 2013.

Lisa Russell of ACG Chicago

Jeff Trader of ACG Wisconsin

and director of sales, financial

was brought on to the deal team

services for Fippex was selected

in an advisory director role at

as Chicago’s 2012 Emerging

Eisen Fox & Company LLC, a

Leader and Top 10 International

Milwaukee-based investment Jeff Trader

Sam Wright

Lisa Russell

Finalist by the eWomenNetwork.

banking firm. Terry O’Grady of ACG Chicago was hired as the commercial executive/senior vice president and head of Midwest Middle Market Commercial Lending for HSBC,

Terry O’Grady

located in Chicago.

To submit your promotions, job changes and other accomplishments to the Ladder section of Middle Market Growth, please send information and a color headshot to editor Kristin Gomez.

We create conditions that are Exactly Right.

For more information: Harry C. Steinmetz Partner-in-Charge Financial Advisory Services 212.375.6741 Harry.Steinmetz@WeiserMazars.com

WeiserMazars provides reflective insight and forward thinking. Our global, industry-focused perspective offers clarity when assessing investment opportunities, creating conditions that are exactly right for growth.

www.WeiserMazars.com

THANK YOU ACG GLOBAL PARTNERS ACG Global thanks the following Partners who play a critical role in supporting ACG’s mission of Driving Middle-Market Growth.SM

OFFICIAL SPONSORS OF GROWTHSM

GROWTH LEADERSM

GROWTH CHAMPIONSM

GROWTH SUPPORTERSM

For information on becoming an ACG Partner, download the ACG Global Partnership Program Prospectus or contact Meredith Rollins, mrollins@acg.org/312-957-4260 or Ellen Moore, emoore@acg.org/312-957-4274. ©2013 Association for Corporate Growth. All Rights Reserved.

it’s the small things THE CUP OF COFFEE // Big Numbers Behind a Small Drink

growth //

Coffee shops are the fastest growing (7 percent annually) niche in the restaurant business. Starbucks is the third-largest restaurant chain in the United States.

trade and commerce //

Lloyd’s of London, the world-renowned insurer, started out in 1688 as Edward Lloyd’s Coffee House, underscoring the central role coffee played in trade and commerce.

by the numbers // People around the world drink 500 billion cups of coffee every year.

Production //

Brazil and Colombia are the world’s leading coffee-producing countries according to the National Coffee Association. The United States imports and consumes more coffee than any other country.

luxury item //

A recent U.S. survey by the National Coffee Association revealed that 69 percent of American coffee-drinkers consider it to be an “affordable luxury.”

value //

Coffee is the world’s second-mostvaluable commodity after oil. The global coffee industry earns an estimated $60 billion annually.

The Leadership acg directors ACG Board of Directors //

Chapter Representative Directors //

Directors At Large //

Chairman Charles J. Morton, Jr.* Partner, Venable LLP ACG Maryland Term expires 8/31/2013

Bradford Adams* TM Capital ACG Boston Term expires 8/31/2015

Ken Berryman CapitalSouth Partners ACG Kentucky Term expires 8/31/2014

Robert Burns Lazard Middle Market, LLC ACG Minnesota Term expires 8/31/2014

Mike Ehlert Capital One Leverage Finance Corp. ACG Houston Term expires 8/31/2015

J.B. Dollison* Crutchfield Capital Corporation ACG Houston Term expires 8/31/2014

Brian Gilbreath Merrill Corporation ACG Nebraska Term expires 8/31/2015

Roy Graham Corporate Finance Associates ACG Central Texas Term expires 8/31/2015

Patti Gillenwater Elinvar ACG Raleigh Durham Term expires 8/31/2013

W. Braun Jones III Outcome Capital LLC ACG National Capital Term expires 8/31/2014

Richard Jaffe Duane Morris LLP ACG Philadelphia Term expires 8/31/2015

Patricia King Bank of America Merrill Lynch ACG Tennessee Term expires 8/31/2015

Frank Mack Kugman Partners Inc. ACG Chicago Term expires 8/31/2014

Brian Moll Polsinelli Shughart PC ACG Arizona Term expires 8/31/2014

Cory Mims ICV Capital Partners, LLC ACG New York Term expires 8/31/2013

Robert Napoli* First West Capital ACG Vancouver Term expires 8/31/2015

Stephen Prostor Citi Private Bank ACG New York Term expires 8/31/2013

Steve Peterson Brass Ring Capital, Inc. ACG Wisconsin Term expires 8/31/2015

Durant (Randy) Schwimmer The Carlyle Group ACG New York Term expires 8/31/2014

Joel Rosenthal Schneider Downs & Co., Inc. ACG Pittsburgh Term expires 8/31/2014

Tom Washbush Benesch, Friedlander Coplan & Aronoff ACG Columbus Term expires 8/31/2015

Hans-Josef Vogel Beiten Burkhardt ACG Rhein-Ruhr Term expires 8/31/2015

ACG Honorary Directors //

Vice Chairman Pamela Hendrickson* COO, The Riverside Company ACG New York Term expires 8/31/2013 President & Chief Executive Officer Gary A. LaBranche, FASAE, CAE* ACG Global Chairman of Finance Les Alexander* Faubourg Capital Partners ACG Louisiana Term expires 8/31/2013 Secretary Penny Larsen* Links Financial ACG Tampa Bay Term expires 8/31/2013 Chairman of InterGrowth 2013 James Marra Blue Point Capital Partners ACG Cleveland Term expires 8/31/2013 Immediate Past Chairman Andrew Rice* Senior Vice President, The Jordan Company ACG Chicago Term expires 8/31/2013

Robert G. Coffey Alan B. Gelband

*denotes member of Executive Committee

ACG Near You acg chapters ACG Chapters ACG 101 Corridor acg.org/101

ACG Edmonton Network acg.org/edmontonnetwork

ACG Pittsburgh acg.org/pittsburgh

ACG Arizona acg.org/arizona

ACG France acg.org/paris

ACG Portland acg.org/portland

ACG Atlanta acg.org/atlanta

ACG Frankfurt acg.org/frankfurt

ACG Raleigh Durham acg.org/raleighdurham

ACG Austria acg.org/austria

ACG Holland acg.org/holland

ACG Rhein-Ruhr acg.org/rheinruhr

ACG Barcelona acg.org/spain

ACG Houston acg.org/houston

ACG Richmond acg.org/richmond

ACG Boston acgboston.org

ACG Indiana acg.org/indiana

ACG San Diego acg.org/sandiego

ACG Brasil acg.org/brasil

ACG Kansas City acg.org/kc

ACG San Francisco acg.org/sanfrancisco

ACG Calgary acg.org/calgary

ACG Kentucky acg.org/kentucky

ACG Seattle acg.org/seattle

ACG Central Texas acg.org/centraltexas

ACG Los Angeles acgla.org

ACG Silicon Valley acg.org/sv

ACG Charlotte acg.org/charlotte

ACG Louisiana acg.org/louisiana

ACG South Florida acg.org/southflorida

ACG Chicago acgchicago.com

ACG Maryland acg.org/maryland

ACG St. Louis acg.org/stlouis

ACG China acg.org/china

ACG Minnesota acg.org/minnesota

ACG Tampa Bay acg.org/tampabay

ACG Cincinnati acg.org/cincinnati

ACG National Capital acgcapital.org

ACG Tennessee acg.org/tennessee

ACG Cleveland acg.org/cleveland

ACG Nebraska acg.org/nebraska

ACG Toronto acg.org/toronto

ACG Columbus acg.org/columbus

ACG New Jersey acg.org/newjersey

ACG UK acg.org/uk

ACG Connecticut acg.org/connecticut

ACG New York acg.org/nyc

ACG Utah acg.org/utah

ACG Czech Republic acg.org/czechrepublic

ACG North Florida acg.org/northflorida

ACG Vancouver acg.org/vancouver

ACG Dallas/Fort Worth acg.org/dallas

ACG Orange County acg.org/occ

ACG Western Michigan acg.org/wmich

ACG Denver acg.org/denver

ACG Orlando acg.org/orlando

ACG Wisconsin acg.org/wisconsin

ACG Detroit acg.org/detroit

ACG Philadelphia acg.org/philadelphia