Middle Market Growth - June/July 2013 by Association for Corporate Growth

Growth Middle Market

// JUNE/JULY 2013

Driving Success

Towne Park Reinvents the Valet Business

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it’s the small things ARE WE THERE YET? // Summer Vacation 2013

NO-VACATION NATION? //

More than two dozen industrialized countries require employers to provide four weeks or more of paid vacation, according to a 2009 study by Mercer Human Resource Consulting, Inc. Employers in the United States are not obligated under federal law to offer paid vacation, so about a quarter of all American workers don’t even have access to it.

BEST SUMMER VACATIONS //

‘Tis the season for heading out for recreation and relaxation. U.S. News & World Report has compiled a list of some of the best summer vacations out there, with a little something for everyone.

BY THE NUMBERS //

ANYTHING BUT AVERAGE // According

MEDICAL TOURISM ON THE RISE //

RVS BACK IN VOGUE //

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Direct spending on leisure travel by domestic and international travelers totaled $564 billion in 2011. Travel also is among the top 10 industries in 48 states and Washington, D.C., in terms of employment.

Medical tourism has seen a surge in popularity during the last 10 to 15 years, with savings abroad for medical, dental and cosmetic procedures. According to the World Travel & Tourism Council, medical tourism contributed 9 percent of global GDP (more than $6 trillion) and accounted for 255 million jobs in 2011.

to the latest American Express Spending & Saving Tracker, almost 140 million Americans (59 percent) are planning a summer vacation, spending an average of $1,180 per person.

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Deliveries of motor homes from manufacturers to dealers rose 13.6 percent last year and are expected to climb by almost the same amount this year, the Recreation Vehicle Industry Association reports. Last year marked the third year of increases from a recessionary bottom that that saw sales fall to the lowest levels since at least the 1970s.

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executive summary Chuck Morton // Partner, Venable LLP, and ACG Global Chairman

Not by accident ...

s my term as chairman of the Global Board of ACG winds down, I am reminded of a strategic planning meeting a number of years ago at which we imagined a better association

and digested the input of more than 4,000 of our members. Our members told us we should be more active in Washington, more international in our scope, more innovative in the use of technology and, generally, continue to sharpen our focus on execution. With the hard work of our volunteer leaders and the dedication of our staff, I am proud to say that we have made great progress. We once aspired to be, and now are, THE voice of the middle market. Our groundbreaking research, Driving Growth: The Impact of Private Capital on the U.S. Economy, shows the value of private capital investment in each U.S. congressional district and now helps inform policy makers. Our legislative agenda, announced in conjunction with Driving Growth this spring at our second annual policy summit, outlines our position on issues important to the middle market. During the summit, members of the House and Senate joined the conversation to share their thoughts and insights on the current economic climate. And letâ&#x20AC;&#x2122;s not forget hearing from both Sen. Alan Simpson and Erskine Bowles at InterGrowth 2013. Together, we have earned a place in the national fiscal policy debate and, as a result, we are now consulted by public officials to help educate their staffs on middle-market matters. Around the globe, ACG continues to advance. The past year saw the first European Capital Tour, a collaborative effort among chapters in France, the Netherlands and Germany. This set the stage for the long-anticipated launch of EuroGrowth this November in London. Also this year, we launched our Brazil chapter and continued our efforts in China with the 7th Annual Chinese International Private Equity Forum. It can now be said the sun never sets on ACG. Additionally, our technology efforts have been transformative. Weâ&#x20AC;&#x2122;re in the middle of launching a new association management system that will provide a foundation for our continued growth around the globe for many years. Our new suite of digital publications, including our flagship Middle Market Growth magazine, will revolutionize the way the industry communicates. Together, these publications deliver timely content to provide additional value to your ACG membership. I am excited about the progress we have made. I am even more optimistic about the progress we will make. Under the leadership of our incoming chairman Pam Hendrickson, with the continued support of our volunteers around the world and our remarkable staff in Chicago, I know that next year will be even better. In closing, let me again extend my sincere thanks for the opportunity to serve in this role. It has been humbling and inspiring. //

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

// JUNE/july 2013

growth story

Driving Success

What began as a part-time job parking cars at a Maryland hotel became the first stop on Jerry South’s road to success. His instincts and expertise, combined with private equity capital, have helped him grow Towne Park from that first job into a successful business providing services at more than 400 properties in 50 markets nationwide. Read more.

“It took me 19 years to get to $50 million in revenue, but only five to get to $200 million because of the help of private equity.” // Jerry South, Founder & CEO of Towne Park

Growth Middle Market

// JUNE/JULY 2013

Driving Success

Towne Park Reinvents the Valet Business

A publication of

ON THE COVER // Jerry South, Founder & CEO of Towne Park Photo By David Hills

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

View from the Top Tom Donohue became president and CEO of the U.S. Chamber of Commerce in 1997 and has built it into an influential powerhouse advocating on behalf of the business community both domestically and abroad. He recently talked to Middle Market Growth about the state of the economy and the current pace of U.S. growth. Read more.

Executive Summary Face-to-Face

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

vice president, strategic development

The Ladder

Ellen Moore emoore@acg.org

It’s the Small Things

vice president, chapter operations

The Leadership

Leslie Whittet, CAE lwhittet@acg.org Custom media services provided by Network Media Partners, Inc.

departments the round Part 1 of a series on using Twitter for business, the latest international deals, and more news about the middle market. Read more.

a qualified opinion Jaime GuzmánFournier, president & CEO of JGF Financial, Inc., gives his perspective on middlemarket issues. Read more.

acg@work A recap of InterGrowth™ 2013 and an update on ACG’s public policy efforts. Read more.

the portfolio M&A trends, advice for selling a business and encouraging signs from the JOBS Act. Read more.

Association for Corporate Growth 125 South Wacker Drive, Suite 3100 Chicago, IL 60606 ACG Membership: membership@acg.org www.acg.org Copyright 2013 Middle Market Growth, InterGrowth 2013 and the Association for Corporate Growth, Inc. All rights reserved.

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

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Face-to-face Connect to your next deal

Join Dealmakers in the UK for Global M&A Event this Fall Join middle-market dealmakers Nov. 12-13 in London for the ACG EuroGrowth™ 2013 conference. EuroGrowth provides a unique opportunity for all ACG members and partners to engage with the European marketplace. Like ACG’s annual InterGrowth conference, EuroGrowth features exclusive networking events for private equity professionals, intermediaries, lenders, advisors, corporate executives and development officers. EuroGrowth 2013 also will include an ACG Capital Connection™ to efficiently connect with dealmakers in the UK and across Europe. To learn more, please visit www.acg.org.

“AT ACG’S EUROGROWTH 2013, MIDDLE-MARKET DEALMAKERS ARE BROUGHT TOGETHER TO EXPERIENCE DYNAMIC CONTENT, NOTABLE SPEAKERS AND CONNECT TO THE RIGHT PEOPLE TO ENSURE THEY DON’T MISS OUT ON THIS GLOBAL DEAL FLOW.” Charlie Johnstone, ECI Partners LLP

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

Face-to-face Connect to your next deal

chapter events JUNE 17-18, 2013 2013 Upper Midwest ACG Capital Connection™ Hyatt Minneapolis Minneapolis, Minnesota More info

JUNE 26, 2013 7th Annual ACG Toronto Golf Classic Eagles Nest Golf Club Maple, Ontario More info JULY 10, 2013 Annual SummerBash™ Central Park Boathouse New York, New York More info

JUNE 20, 2013 ACG New York Champion’s Awards Metropolitan Club New York, New York More info

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

JULY 16, 2013 4th Annual Food Industry Growth Conference: Feasting on Opportunities Sheraton Chicago Hotel & Towers Chicago, Illinois More info

To have your chapter’s upcoming events featured in Middle Market Growth, please send the details to editor Kristin Gomez. Be sure to include the name of the event, time, date, location, cost and link to register.

Face-to-face Connect to your next deal

chapter events AUGUST 15, 2013 ACG Indiana Golf Outing Brickyard Crossing Golf Course Indianapolis, Indiana More info

AUGUST 1-2, 2013 Northwest Middle Market Growth Conference™ Bell Harbor Conference Center Seattle, Washington More info AUGUST 7, 2013 16th Annual Golf Tournament Langdon Farms Golf Club Aurora, Oregon More info

AUGUST 26, 2013 Annual Pro-Am Golf Tournament Meadowbrook Country Club Ballwin, Missouri More info

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

From 1995â&#x20AC;&#x201C;2009, New York-based private capital-backed companies grew jobs by

43.3%

See what Private Capital has done for you. www.GrowthEconomy.org

the round News that Matters

Dividend Retweets, Part I: Getting Started on Twitter for Deal Professionals Sumeet Shah is assistant director, business development, for Gotham

MMG Daily: Find Out What People Are Saying About the Middle Market on Twitter

Consulting Partners, which provides strategic and operational oppor-

The Association for Corporate

tunities for the private equity industry. This is the first in a series of

Growth is proud to offer the new-

articles he is writing about how private equity professionals can ben-

est segment in our suite of digital

efit from an active Twitter presence.

publications: a daily digital news

Private equity has always been a cloistered industry; there’s a rea-

stream called Middle Market

son why the word “private” exists within its brand title. However, as it

Growth Daily. This free opt-in

has been entering the public spotlight for the past few years and will

service delivers up-to-the-minute

continue to, social media, especially Twitter, has become an important

middle-market news, reviews and

tool to help originally conservative firms and executives “come out”

views from the most popular and

into the open. (I covered this “coming out” not too long ago, and judg-

talked-about Twitter feeds. This

ing by the SEC’s latest ruling, we should see more opening up.)

fast-breaking summary does not

After starting up PE_Feeds in June 2010, I’ve done my best to help

require you to know how to use

PE firms and executives get comfortable using Twitter. I’ve worked

Twitter. It is a collection of articles

with ACG for the past few years and I’m proud to launch the first in a

shared on the social site brought

series of pieces called “Dividend Retweets,” dedicated to helping the

to your inbox each morning.

private equity industry embrace Twitter. The first installment is pretty

simple: dos and don’ts when you’re getting started. // To learn more about PE_Feeds, feel free to follow and tweet at me!

the round News that Matters Twitter Dos and Don’ts for PE Professionals DO:

DON’T:

Make Friends with Twitter Lists:

Be Afraid to Have Fun: As David Beard,

I’ve always told people it doesn’t matter to

the Washington Post’s director of digital

me how many Twitter followers I have, but

content wrote, making your tweets

what lists my account is a member of. A

authentic will help build your credibility on

“Twitter list” is a real-time updating list of

Twitter as a deal professional or a deal firm.

specific Twitter accounts you want to follow,

On PE_Feeds, I tend to tweet interesting

such as:

articles (and tag them with #FeedsReads)

• Private equity executives

as well as post cute animal pictures and

• Private equity firms

fun links to help take away from some of the

• Journalists covering PE

more news-heavy days. Nobody likes a

• ACG chapters

Twitter robot.

• General industry news I am also working with Axial to put together

Shy Away from Twitter Replies: It’s all

a list of journalists to follow on Twitter. Feel

about relationships and connections. Just

free to subscribe!

as it is in the business world, this is true on Twitter. I’ve heard of PE firms connecting

Download TweetDeck: TweetDeck creates

with people on Twitter and turning that into

columns and updates real-time. It helps

new deals or new hires. Keeping your Twit-

track the Twitter lists I mentioned above as

ter account down-to-earth and approach-

well as allowing hashtag searches (specifi-

able yet authentic and professional will build

cally #privateequity), managing multiple

up your reputation out in the digital world.

Twitter accounts, tracking trends, schedul-

Again, being a Twitter robot isn’t helpful.

ing tweets and viewing direct messages. I have found some interesting articles and

Troll Back: There are more than enough

new followers this way.

people on Twitter who will send hate tweets to PE firms. As tempting as it could be to

Consider Making Twitter = IR Central:

respond with snarky jabs, DO NOT DO IT.

Lots of PE firms use Twitter as a social out-

Be the bigger person and don’t let clearly

let for investor relations/press pieces. Black-

biased (and usually anonymous) people get

stone and Carlyle also use their accounts to

to you. For one thing, if you do it through the

tweet out some philanthropic activity. They

company’s Twitter account, as we’ve seen

even show their lighter side by tweeting

from other brands, it could cost you your job.

pictures of penguins walking through the lobby (Blackstone owns SeaWorld).

Stay tuned for the second part of this series in the September issue of MMG. Also, feel free to follow Middle Market Growth on Twitter @ACG_MMG.

the round News that Matters

International Deal-Making Japan’s rapidly consolidating hospital

Vivendi’s shareholder impatience shows

segment opens up new opportunities

as M&A fails to give direction

Japan’s hospital sector could see acceler-

Vivendi’s shareholder displeasure was

ated consolidation in the short-term on the

clear at its April 30 Annual General Meeting

back of anticipated government cutbacks

as the listed French Media group continues

and ongoing succession and funding issues,

to soul search one year after starting its stra-

industry sources said. This should open up

tegic review.

new investment opportunities for strategic

Read the full story online

players and private equity firms, they said. Read the full story online

Australian oil and gas juniors expected to seek dual listings in North America

Regional Mexican banks seen as medium-

Australian Securities Exchange-listed small

term IPO candidates

cap energy companies are expected to

As rumors swirl about the possible listing of

increasingly look at the Toronto Stock

large Mexican banks like BBVA Bancomer,

Exchange and other North American stock

industry sources expect mid-sized regional

exchanges for dual listings, industry sources

banks in Mexico to be the most likely candi-

and analysts said.

dates for IPOs in the next two years.

Read the full story online

Read the full story online China to accelerate opening of security Clariant’s disposals and debt reduction

services industry this year

could unlock foreign takeover interest

China’s commercial security services indus-

Swiss chemical giant Clariant’s planned di-

try will see faster liberalization this year, as

vestments, operational streamlining and debt

the Ministry of Public Security is drafting new

reduction is expected to pave the way for it

measures to further open the sector to pri-

to become a target for a number of sector

vate enterprises and foreign capital, govern-

majors, according to industry participants.

ment and industry sources said.

Read the full story online

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

the round News that Matters

Upcoming Webinars middle-market private capital

The Deal’s Webcast, June 20, 2013 M&A in the Middle Market: Growth Signs, Active Sectors, Quality Deals

professionals identify and apply

A spate of mega deals indicates that strategic and financial buyers are

for open M&A jobs. In addition,

back in the market, so when will this momentum trickle down to the

employers and recruiters seeking

middle market? The Deal will examine what factors will drive middle-

to fill middle-market jobs can

market deals, where to find quality deals, how eager credit markets will

access qualified candidates

be to lend and how strategies will need to adapt to benefit.

ACG JobSource® is an online job board geared toward helping

through online job postings. ACG JobSource posts range from

entry-level positions and internships to C-suite executives. Tap for more information.

Recent ACG Webinars Now Available Data Analytics – A Bottom-up Approach to Financial Due Diligence Are you looking to enter the M&A market? You need access to thorough information to achieve good value. This complimentary webinar looks at the bottom-up approach to financial due diligence. Discover how this technique can help you mine and use transaction-level data so you can more effectively analyze risks associated with lower middle-market M&A transactions and find the true value of a target business.

What’s the Deal? An Analysis of Middle Market M&A Trends Which sectors are most active in middle market M&A? Where might opportunities be in 2013 and 2014? What are some challenges to growth? Join us for this complimentary webinar, including an analysis of transaction activity by sector in the middle market and throughout private equity, including financing, valuations, transaction types, and more. Also gain practical insights into how these trends are impacting middle market investing, with specific perspectives on investing in the branded consumer products and services sector.

the round News that Matters Get Your Copy of Driving Growth This spring ACG

New Report on the State of the Middle Market

unveiled Driving

Brown Gibbons Lang

Growth: The Impact

& Company, an inde-

of Private Capital on

pendent investment

the U.S. Economy, a

bank that serves the

book that graphically

middle-market cor-

depicts data from GrowthEconomy.org

porate finance advisory and transactional

for each congressional district. The book

needs of their clients, recently released its

compares sales and job growth data of

biannual report, Inside the Middle Market.

private capital-backed companies vs.

The report details different aspects of the

other companies in the U.S. economy,

market, including data on deal flow, recent

1995-2010, organized by state and

M&A activity and trends.

congressional district. This collection of

Take a look!

data is an important tool to help further educate lawmakers and the American public about the role and value of private capital investment. Printed and distributed to all members of Congress, all state governors, and selected media and academics, Driving Growth is available via PDF at no charge. Please take the time to see how private capital is working to drive growth in your state. For more information, contact Amber Landis, manager, policy communications, ACG.

Get PitchBook Data Daily in Your Inbox Finding it hard to stay abreast of the latest trends and happenings in private equity? PitchBook’s daily newsletter and reports offer critical insights and analyses on the PE industry. Powered by the PitchBook Platform, these publications range from industry breakdowns to specific reviews of exits activity, fund returns and more. Access the PitchBook library and stay tuned for the release of the 3Q PE Breakdown, available early July 2013.

Tell Us Your News // Middle Market Growth wants to know what’s happening in the middle market around the world. Please send your news in 250 words or less, along with a color photo (300 dpi or greater) if available, to editor Kristin Gomez.

the round News that Matters

vertical view // energy, transportation, tourism

The transportation industry has seen consistent growth in the number of completed financings since 2009, growing from 20 to 42 from 2009 to 2012. The proportion of these deals that are later-stage has grown from about 25 percent of deals in 2008 to about 40 percent of deals in 2012.

Florida and California lead the way in tourism deals. In terms of capital, Nevada led the way (bolstered by the Caesarâ&#x20AC;&#x2122;s buyout), followed by California and Texas. The fewest deals were in Illinois and Pennsylvania (9 each) and South Carolina (6).

PE firms have exited 87 oil- and gasrelated companies since 2011 and have exited through SBOs at a much lower rate than the private equity industry as a whole.

California has closed the most financings since 2006 at 82, followed by Massachusetts with 20.

82%

Access to energy is crucial to the U.S. economy. The most active industry group was exploration, production and refining, completing 63 deals since 2012, followed by energy services with 55 deals.

Energy keeps America moving. As of 2012, Texas is the most active deal-making state, completing 76 deals. The next closest state was Oklahoma, completing 15.

20%

The tourism industry peaked in 2007 with 53 deals and $31 billion invested, followed by lackluster deal flow and capital investments (with the exception of the $30 billion buyout of Caesarâ&#x20AC;&#x2122;s Entertainment in 2008).

76 Deals

Major deal sectors for this vertical include oil & gas, transportation, tourism and alternative fuel vehicles. All statistics are from PitchBook for the middle market (deal values from $25 million to $1 billion).

“I know exactly who you should call.” People who know Private Equity, know BDO.

The Private Equity Practice at BDO. Strategically focused. Remarkably responsive. A century of experience. BDO’s Private Equity Practice provides integrated, value-added assurance, tax, and consulting services across the fund cycle, and across the world – all through a single point of contact. Lee Duran, Partner, Assurance Services, San Diego, 858-431-3410, lduran@bdo.com Ryan Guthrie, Partner, Transaction Advisory Services, Orange County, 714-668-7385, rguthrie@bdo.com Scott Hendon, Partner, Tax Services, Dallas, 214-665-0750, shendon@bdo.com Todd Kinney, National Relationship Director, New York, 212-885-7485, tkinney@bdo.com Accountants and Consultants www.bdo.com/privateequity © 2013 BDO USA, LLP. All rights reserved.

The Driver // Jerry South, Founder and CEO of Towne Park

Driving Success Towne Park Grows Out of One Manâ&#x20AC;&#x2122;s Concept To Do It Better

By Danielle Fugazy Photos by David Hills

On the job // Towne Park employee Alex Smith turns over the keys to Founder & CEO Jerry South

ost undergraduate students muddle through part-time jobs to earn a few bucks while they work toward degrees that apply to what they really want to do. However, the operative word here is most, not all. Jerry South, CEO and founder of Towne Park of Annapolis, Md., is an example of that small percentage of college kids who really cared about that part-time job and it paid off. It was 1985 and South was fresh out of the Army studying aeronautical engineering at Southeast Florida Community College. He got a part-time job valeting cars, and he kept having this nagging thought: “I can do this better than they can.” Two years later, South dropped out of college and moved back home to Annapolis, where the Annapolis Hotel (now a Loews) was being erected. South, 23 at the time, went over to the hotel and asked the management if he could offer his services as the parking concessionaire when the hotel was completed. South was immediately shot down. “I was young and I had no business experience. I am not sure I would have hired me at that time either,” South says.

“Private equity gave me access to capital and helped me grow the business. It took me 19 years to get to $50 million in revenue, but only five to get to $200 million because of the help of private equity.” Jerry South Founder and CEO of Towne Park

Undeterred, the ever-persistent South got the manager to agree to let him park cars during the hotel’s thank-you party to the vendors that helped build the hotel. “I rallied 12 friends, bought a stack of green windbreakers, and I gave the hotel free valet service for the night. It cost me $650, but it landed me the job,” recalls South. South officially incorporated Towne Park in 1988, hired a few employees and they were valets and doormen at that hotel for two years. South relied heavily on his tips to get by during that time. “Then one day I am in uniform shining a bell cart and a guy pulls up and I hear him say to one of the guys parking the cars, ‘I understand the hotel outsources this service, how do I find the person in charge?’ The attendant points to me,” South says. It turned out to be Tom Kammerer, general manager at the new Marriott opening down the street, and that hotel also was looking for valet parking attendants to greet guests at the hotel’s entrance. “And now I had a business,” South says. Indeed, this was the beginning of something not even South could have imagined. By 1993, Towne Park had 13 locations, was bringing in about $3 million annually and had 100 employees. It was only then that South stopped putting himself on the daily shift schedule and started focusing on growing the business even more. Today, Towne Park provides services at more than 400 properties, including hotels and health care facilities, and serves 50 markets nationwide with 6,500 employees. The company has earned many accolades for its successful growth over the years. Towne Park made the 2011 Inc. 5000 List of America’s Fastest Growing Private Companies, ranking No. 1778. Towne Park was named on the inaugural Inc. 5000 List in 2007, ranking No. 3857, and appeared on the list in 2009 at No. 3856. The company also has won local awards from the various markets it serves, such as the Preferred Vendor of the Year Award from the Greater Nashville Hotel Association in 2010.

“The opportunities are just extraordinary. We have plenty of room to grow market share in the hotel business.” David Warnock a managing member of Camden Partners

While South is no doubt the brains behind the operation, he did not grow Towne Park to what it is today by himself. When he decided to seek a financial partner, private equity investment helped him grow the business and eliminate some of his personal risk. “I was married at this point, starting a family and 95 percent of my net worth was invested in Towne Park,” South says. “A partner would help me diversify. I had been personally guaranteeing everything and when you are starting a family you realize you can’t risk it all.” In 2007, South sold a controlling interest in his company to Baltimore-based Camden Partners. Fund-of-Funds HarbourVest Partners co-invested alongside Camden. South says seeking private equity capital turned out to be a wise business decision. “Private equity gave me access to capital and helped me grow the business. It took me 19 years to get to $50 million in revenue, but only five to get to $200 million because of the help of private equity,” he says.

on the go // Patrick Orr is one of about 6,500 employees on the job for Towne Park nationwide

Flush with capital, Towne Park started acquiring competitors. In 2005, it bought MediPark, which brought the company to Dallas. In 2008, it acquired Mile Hi Valet Service of Denver, which added 77 hotel parking locations and 1,800 new employees to Towne Park. In 2009, Towne Park acquired Kansas-based Avascend Healthcare Hospitality, launching its enterprise into the health care sector. Most recently, Towne Park acquired Quality Parking Service of Los Angeles in 2011, expanding the company’s presence even further on the West Coast. Towne Park’s growth has come quickly and there are no plans for it to slow down. David Warnock, a managing member of Camden Partners, says the company’s growth possibilities are just about endless. “The opportunities are just extraordinary. We have plenty of room to grow market share in the hotel business. We have 20 percent of the market share in Baltimore, Washington and Orlando, and 5 to 10 percent in another 30 cities. We are also getting involved in the healthcare space. Hospitals care more about the patient experience than they ever did before. There’s room to do lots with hospitals,” says Warnock, adding that he immediately liked Towne Park because it had strong management, an inclusive culture and a business model that could self-finance rapid growth.

“We have 136 employees who have earned their way to ownership ranks of the company. My proudest moments are watching my teammates navigate the growth opportunities, create a quality of life and accumulate wealth.” Jerry South Founder and CEO of Towne Park

Towne Park currently has two acquisition prospects in the pipeline. Both are smaller, family-operated businesses. Camden certainly has helped Towne Park achieve the next level of growth, but it was South’s ability to choose good people and treat them well that has kept Towne Park at the top of its game. Everyone at every level of the company is incentivized through bonuses and rewards. Additionally, the company allows employees to gain stock options. “We have 136 employees who have earned their way to ownership ranks of the company. My proudest moments are watching my teammates navigate the growth opportunities, create a quality of life and accumulate wealth,” South says. “There are valets here who have bought homes, raised a family and have a couple of million in Towne Park stock. That’s what we work for.” // Danielle Fugazy is a freelance writer and contributor to Middle Market Growth magazine. She may be reached at dfugazy@fugazygroup.com.

Towne Park // Road to Growth Towne Park was incorporated in July 1988 with $650 in its business account. Today, Towne Parkâ&#x20AC;&#x2122;s 6,500 associates serve more than 250 hotels and 150-plus hospitals in more than 50 markets nationwide. These are its key acquisitions over the last eight years: MediPark Valet

Aquired: 11/05 Value Added: Brought Towne Park to Texas Employees Added: 120 Revenue After Acquisition: $20M

Aquired: 8/08 Value Added: Brought Towne Park to Colorado and West

Mile Hi Valet Services

Employees Added: 1,800+ Revenue After Acquisition: $100M

Avascend Healthcare Hospitality

Aquired: 6/09 Value Added: Brought Towne Park to Kansas City and into health care industry Employees Added: 1,100 Revenue After Acquisition: $100M

Aquired: 6/11 Value Added: Brought Towne Park to Commercial Parking Segment Employees Added: 600 Revenue After Acquisition: $165M

Quality Parking Services

View From ThE TOP Interview with Tom Donohue, President and CEO of the U.S. Chamber of Commerce

Fiscal Leader// Tom Donohue has led the U.S. Chamber since 1997

iddle Market Growth recently interviewed Tom Donohue, president and CEO of the U.S. Chamber of Commerce, on the state of the economy and the current pace of U.S. growth. After assuming his leadership role at the Chamber in 1997, Donahue has built the Chamber into an influential powerhouse advocating on behalf of the business community both domestically and abroad. Most recently, he worked to advance the American Jobs and Growth Agenda, a plan that outlines a roadmap for U.S. economic recovery that includes policies to reform the tax and entitlement systems, expand trade and domestic energy production, strengthen American infrastructure and fight an onslaught of new regulations that hinders rather fuels economic growth.

Middle Market Growth: The Chamber’s American Jobs and Growth Agenda outlines ways to spur economic growth, create jobs and fix policies in Washington that are holding back American prosperity. What do you believe is the most immediate issue to fix in 2013? Tom Donahue: The overall lack of economic growth. We’re growing too slowly to significantly drive down the unemployment rate, provide opportunities to young people entering the workforce, or get the long-term unemployed off the sidelines and back in the game. We’re not growing fast enough to generate the revenue we need to reduce the deficit, fund social welfare programs or invest in things like infrastructure, which we desperately need. We’re not growing fast enough to maintain American leadership around the world. Growing at our long-term potential of 3 percent—or better—doesn’t involve one single issue; it involves all of the issues we address in our American Jobs and Growth Agenda: expanding trade, spurring an American revolution in energy, reining in excessive regulation, encouraging innovation, and getting our fiscal house in order. Growth won’t solve all of our problems, but we can’t solve any of them without it. The imperative of economic growth should not be an afterthought in Washington. It has to be job one. MMG: What is the Chamber’s plan to urge Congress to tackle tax and entitlement reform? TD: On tax reform, we’re making a few fundamental points. First, government can’t get the revenue it needs without strong economic growth. If you raise taxes in a way that kills growth, you won’t get the money. Second, we’re saying that a better way is through comprehensive tax reform that broadens the base, lowers rates, closes loopholes, simplifies compliance and makes our companies more competitive around the world. And finally, we’re saying that if you are really looking for a cash cow; look no further than this country’s extraordinary energy resources. We could generate $2.5 trillion in the next two decades if we fully develop American energy. On entitlements, everyone knows they are unsustainable. Anyone who says that we can leave these programs on autopilot without changes either doesn’t understand arithmetic, is disingenuous or is living in a fantasy land.

To keep those vital programs solvent for future generations, they must be revised to meet the needs of today’s population and to match the reality of our changing demographics. We’re not talking about cuts in absolute terms—but we must slow the rate of increase by phasing in reasonable adjustments over a number of years. The Chamber will be deeply engaged in the effort to win comprehensive tax reform. And we’re going to make the case for sensible changes to strengthen and preserve our entitlement programs and to help get our fiscal house in order.

“The imperative of economic growth should not be an afterthought in Washington. It has to be Job One.”

MMG: What is the Chamber’s position on immigration reform and how can reform help middle-market companies? TD: The fact is our current immigration system is broken. Everybody knows it. It’s not serving the interests of our economy, our businesses, our workers or our collective security. We believe that immigration reform should include four interrelated components—a secure border; a thoughtfully designed temporary worker program and a visa system tied to market demands; a workable, reliable national employee verification system; and a path out of the shadows for the 11 million undocumented immigrants who live in the United States today, with the understanding that they will meet strict conditions, such as paying civil penalties and back taxes and learning English. Immigration reform that meets these principles will fundamentally improve our global competitiveness, attract and retain the world’s best talent and hardest workers, secure our borders, and keep faith with America’s legacy as an open and welcoming society. That’s good not just for middle-market companies, but for all companies and the country as a whole.

MMG: ACG’s recent publication, Driving Growth: The Impact of Private Capital on the U.S. Economy, reveals that private capital (private equity and venture capital) has been invested in 20,000-plus companies in every state and in more than 425 congressional districts since 1995. However, private capital investment is not well understood by policymakers, the media and others. How can middle-market private capital investors improve the image and gain appreciation for the value they bring to the economy? TD: The Chamber is pleased to join ACG in explaining to lawmakers and the public the importance of strong capital markets and private equity. It’s an essential part of our mission. Nothing happens in this economy until someone makes a deal or sells something. You’re the financial mechanics that put together the pieces of our economic engine. You make the deals that keep that engine humming … that connect buyers and sellers and investors and entrepreneurs … and that create value, prosperity, jobs and growth. But you can’t do those deals without efficient, stable, liquid capital markets. So we’re focused on making sure that business owners have access to the capital they need to fulfill their dreams and drive America’s economy forward.

Driving Growth is printed and distributed to all members of Congress, all state governors, media, and academics. To get your copy of Driving Growth download a PDF at no charge.

MMG: What is the biggest threat to cross-border business? TD: Regulatory “behind the border” barriers to international trade are the biggest headache for American exporters today. As if meeting the demands of U.S. regulators wasn’t enough, both large and small companies struggle with the high costs of complying with regulations in multiple jurisdictions. Some governments have been very busy devising new barriers that skew the playing field against foreign companies. For example, some countries are insisting that companies manufacture goods locally in order to qualify for lucrative infrastructure contracts. Looking ahead, our trade negotiators will need to work overtime to ensure that American companies can get a fair shake.

“You’re the financial mechanics that put together the pieces of our economic engine. You make the deals that keep that engine humming.”

MMG: How do ACG’s and the U.S. Chamber’s policy interests complement each other? TD: We share many of the same goals and have been great partners on a number of issues, including comprehensive tax reform, treatment of carried interest, a low capital gains tax rate, and all the various issues involving DoddFrank. We’re stronger when we work together, and we look forward to continuing our partnership. MMG: What should ACG members consider doing to make a bigger impact on the public policy front? TD: Provide good content, make strong arguments and don’t be afraid to stand up for your point of view. Don’t assume that non-experts understand the role you play in the economy or what’s important to your success. Every member of the business community has a responsibility to make his or her voice heard in the public debate and to fight for policies that will grow our economy and preserve our free enterprise system. Every ACG member understands the power of relationships. Establishing a relationship with your elected leaders will pay all kinds of dividends. In Washington, if you’re not at the table, you’re on the menu!