James Cassel to Speak at ‘The Middle Market: Our World of Opportunity’

MIAMI – Dec. 21, 2012 – James Cassel, co-founder of Cassel Salpeter & Co., an independent investment banking firm that provides advice to middle-market and emerging growth companies in the U.S. and worldwide, will serve as a panelist in January at “The Middle Market: Our World of Opportunity in 2013” conference, sponsored by The Alliance of Merger & Acquisition Advisors (AM&AA) and The CFO Alliance. Cassel’s roundtable presentation, “Middle Market Update,” will focus on the current status of and emerging trends in middle-market mergers and acquisitions and will take place from 9:15 a.m. to 10:30 a.m. Wednesday, January 16, at the Hilton Miami Downtown, located at 1601 Biscayne Boulevard, Miami, Fla., 33132.

The conference will feature leading middle-market financial and strategic investors and advisors from around the world who will provide insights into the opportunities awaiting middle-market dealmakers in 2013. The panel is comprised of middle-market M&A industry professionals with extensive experience in the current M&A market and the areas of private equity, investment banking, lending, and data and research. Cassel and fellow panelists will discuss topics including: recent activity; current trends in valuation, leverage, restructuring and deal flow; and predictions on market activity for 2013. Moderated by Graeme Frazier with Private Capital Research/GF Data, the panel also includes: Randy Lampert, with Lampert Debt Advisors; Ken Jones, with Boathouse Capital; and Daniel Confino, with MergerID.

“While most middle-market business owners have been postponing any major business decisions until they’re seeing more clarity and confidence that the U.S. government can execute an effective plan for sustainable growth, they would be wise to begin considering now how to best position their companies for emerging challenges and opportunities as M&A activity begins to increase in 2013,” said Cassel, one of Miami’s best-known investment bankers. “Success in today’s market is all about staying ahead of the trends and working with trusted advisors to develop custom-tailored strategic plans to meet your unique business needs. Those who do can gain a tremendous competitive advantage.”

Nationally recognized for his investment banking expertise and a contributing columnist for The Miami Herald, Cassel frequently lectures on timely issues related to middle-market investment banking. Cassel has successfully negotiated, structured, and executed a broad spectrum of transactions including mergers, acquisitions, and divestitures, corporate and transactional financings, and public offerings for clients nationwide and worldwide. He has extensive experience developing financial restructuring plans, negotiating with creditors, and guiding debtors through bankruptcy proceedings.

About the Alliance of Merger & Acquisition Advisors (AM&AA)
The Alliance of Merger & Acquisition Advisors (AM&AA) is noted as the premier international organization serving the educational and resource needs of the middle market M&A profession. The Alliance of Merger & Acquisition Advisors® (AM&AA) is the premiere International Organization serving the educational and resource needs of the middle market M&A profession. Formed in 1998 to bring together Investors, Advisors and  other Middle Market Transaction Professionals,  AM&AA’s 900+ professional services firms in 22 countries – including some of the most highly recognized leaders in the industry—draw upon their combined transactional expertise to better serve the needs of their middle market clients worldwide. AM&AA members represent sellers and buyers of businesses ranging from $5 to $500 million in transaction value. Their services are seller representation, buyer representation, due diligence, accounting, financing, business valuation, tax planning, legal, strategic advisory, and many other transaction services. For more information, visit www.amaaonline.org or email info@amaaonline.org.

About Cassel Salpeter & Co.
Cassel Salpeter & Co. is an independent investment banking firm that provides advice to middle market and emerging growth companies in the U.S. and worldwide. Together, the firm’s professionals have more than 50 years of experience providing private and public companies with a broad spectrum of investment banking and financial advisory services, including: mergers and acquisitions; equity and debt capital raises; fairness and solvency opinions; valuations; and restructurings, such as 363 sales and plans of reorganization. Co-founded by James Cassel and Scott Salpeter, the firm provides objective, unbiased, results-focused services that clients need to achieve their goals. Personally involved at every stage of all engagements, the firm’s senior partners have forged relationships and completed hundreds of transactions and assignments nationwide. The firm’s headquarters are in Miami. Member FINRA and SIPC. More information is available at www.CasselSalpeter.com

Financial planners struggle to meet clients’ fiscal cliff goals

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By Paul Brinkmann

South Florida financial planners are doing their best to deal with client demands for protection from so-called “fiscal cliff” issues, but some say options are very limited.

“Ultimately, I don’t think we will plunge off the fiscal cliff, because I believe Washington will reach some compromise,” said Eli Butnaru, CEO of Miami-based Mora Wealth Management. “But at this point, this is one of the few times there just aren’t many alternatives. That’s why it’s considered a crisis. It’s much easier to say what not to do than what to do.”

Pressed for solutions, wealth managers the Business Journal spoke with for this report said they are providing ways to avoid the impact of worst-case scenarios. But many financial institutions warned that long-term investment decisions should not be based on short-term headlines about politics or fears of taxes rising. PNC Bank issued a statement Dec. 11, saying it “always maintains that investment choices should never be made based solely on headlines, and that the long-term view best serves.”

Technically, the nation will reach the edge of the fiscal cliff on New Year’s Eve, when the Bush-era tax cuts expire and mandatory spending cuts kick in. As of Dec. 12, national media reported little progress, except that President Barack Obama had offered to reduce new revenue expectations to $1.4 trillion from $1.6 trillion. But CBS News reported some Republicans in the GOP-controlled House called that “laughable.”

In Miami, Butnaru said he was dealing with limited options until a clearer direction emerges.

“In general, we don’t like defensive sectors, meaning the kind of investments that pay dividends,” he said. “We prefer equities now; we truly do not like bonds. It’s truly difficult to find a good bond today.”

Butnaru said he and his firm prefer to seek investments in emerging markets, including Chinese high-yield investments.

“It may sound like a contradiction, but we still look for quality junk bonds or investments,” he said. “High yield or junk might still do well from excess spread, because there’s still no spread available on the investment grade.”

Despite some talk about wealthy people making large investments, gifts or annuities in advance of the cliff, Butnaru said he thinks such activity is no more than normal.

Adam Bergman, senior tax attorney with IRA Financial Group, said he has seen a spike in requests to move money into IRA and 401(k) accounts.

“I’ve had a lot of feedback since November [from] people between 40 and 70 years old who are looking to do different things with their retirement funds,” he said.

“People know taxes are going up anyway you cut it, even if it’s only the health care surtax, so they want to divert as much income as possible,” he said. “We’ve seen an increase in the number of people who want this started by the new year to avoid the impact.”

Bergman said investors, who recently focused on returns from stocks and tax-deferred accounts, are now afraid of dividend taxes going up. He pointed to a few South Florida companies – including National Beverage Corp. and Heico Corp. – that issued special dividend payments in advance of the fiscal cliff.

“The day after the national elections, my phone started ringing more. I saw a 35 percent increase in calls about tax-deferred accounts on Nov. 5,” he said. “I think a lot of people just woke up and said ‘Wow, Jan. 1 is pretty close,’ and the stock market took a dive after the election.”

Bergman said some people call to ask questions, and others call to say they realize taxes will go up and they want specific things.

He also acknowledged that another reason for people putting money into tax-deferred accounts is more financial stability.

“We did see people, quite a few years ago, taking loans out on their tax-deferred plans,” Bergman said. “Things are definitely better now, and people are looking at ways to build up those accounts again.”


What is the fiscal cliff?

A combination of expiring tax cuts and across-the-board government spending cuts scheduled to become effective on Jan. 1.

The idea behind the fiscal cliff was that, if the federal government allowed these two events to proceed as planned, it would have a detrimental effect on an already shaky economy, perhaps sending it back into an official recession as it cut household incomes, increased unemployment rates and undermined consumer and investor confidence.

At the same time, it was predicted that going over the fiscal cliff would significantly reduce the federal budget deficit.

Source: Investopedia.com

7 tips to help business owners navigate the cliff

James S. Cassel, founder and chairman of Cassel Salpeter & Co. LLC, a Miami-based investment-banking firm that works with middle-market companies, offers this advice for business owners amid worries about the fiscal cliff:

  • Although interest rates are not likely to skyrocket soon, it’s still a good time to lock into long-term financing like the big boys.
  • Consider your exposure to real estate, as the elimination of mortgage interest deductions may cause prices to decline.
  • With the Patient Protection and Affordable Healthcare Act and a new health care tax on the horizon, business owners should begin evaluating how the anticipated new costs may impact their bottom lines. They should work with advisors to consider strategies – such as whether to insure their employees or opt out and pay the penalties – and determine the best course of action that will support their business goals.
  • Consider doing more business with state government. As states begin to recover and get more tax revenue, there may be greater opportunities to do business.
  • Consider foreign markets to sell services or products. While emerging markets, such as South and Central America, and Asian markets look better than Europe, don’t forget Europe.
  • With more efficient equipment available and a diminished need for manual labor, you should consider “reshoring” (i.e. bringing back to the U.S.) whatever you currently manufacture offshore.
  • Look at your customer base and, if you think your business may be affected by government actions, develop a plan and consider measures like cost reductions or layoffs.

Wolper Sale Dec 2012

Dever Sale Dec 2012

Wolper Subscription Services has been acquired by LM Information Delivery


  • Background: Headquartered in Easton, PA, Wolper is a full-service information management resource, providing customized solutions for subscription management and related resources including print and electronic, foreign and domestic magazine and journal subscriptions, as well as books and e-books, databases, site licenses, and state-of-the-art information management tools.
  • Cassel Salpeter:
    • Served as financial advisor to the Company
  • Challenges:
    • Family business needing larger platform to continue to compete with growing U.S. competitors
    • Significant cultural differences with purchaser created many deal obstacles
  • Outcome: In December 2012, Wolper Subscription Services, Inc. was sold to LM Information Delivery, a competitor of the Company, with headquarters in Finland.

Dever has been acquired by Von Allmen Capital Partners


  • Background: Headquartered in Easton, PA, Wolper is a full-service information management resource, providing customized solutions for subscription management and related resources including print and electronic, foreign and domestic magazine and journal subscriptions, as well as books and e-books, databases, site licenses, and state-of-the-art information management tools.
  • Cassel Salpeter:
    • Served as financial advisor to the Company
  • Challenges:
    • Family business needing larger platform to continue to compete with growing U.S. competitors
    • Significant cultural differences with purchaser created many deal obstacles
  • Outcome: In December 2012, Wolper Subscription Services, Inc. was sold to LM Information Delivery, a competitor of the Company, with headquarters in Finland.

Bluegreen Sale Nov 2012

Factors to Consider when Shopping for a Business

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By James Cassel

It’s not enough to land any company. You need to search for one that’s right for you, at the right size and price.

MIAMI, Florida, November 25, 2012 – When looking for a business to buy, you can forget immediate gratification. Businesses can’t be found under rocks. It’s a more complex process that takes more time than most people expect.

We hear it often: “I’m looking for a business in Florida with $10 million in revenues, making $2 million per year or more. Or I want to buy something with a minimum of $5 million of EBITA (Earnings Before Interest, Taxes and Amortization). Can you point me to one?” Sure, if I could find a needle in a haystack.

There’s no good database or source to search with those types of broad parameters. Even if such a database existed, the “anything goes” approach wouldn’t be in your best interest. It’s not enough to just find any business — you need to find the one that’s right for you, at the right size and price. Institutional buyers verses individual buyers may have different views, needs and wishes.

Some buyers have a pretty clear notion of what they want: a small- to mid-sized business, like a small distribution company or mom-and-pop chain of dry cleaners. In those cases, they can work with business brokers who carry listings like real estate agents. There are a couple of those in every town, and also good websites like BizQuest.com, USABizMart.com and BizBuySell.com that post business-for-sale opportunities. S&P Capital IQ is always a good source for information.

Investment bankers are helpful to those looking for larger businesses with specific and well-defined criteria. These are deals that aren’t listed and require research and knocking on doors, a very disciplined approach.

Private equity firms assign their staff members to search through databases for opportunities and make calls to owners to introduce themselves and gather all the intelligence they can. Again, databases don’t cut it for these types of business searches, as the information is often incomplete, erroneous and/or misleading. In addition to databases, there are many other places to look, such as trade magazines.

Here’s a classic example: A partner at private equity firm called us a few years ago wanting to meet a specific business owner who wasn’t returning his phone calls. Dunn & Bradstreet’s credit reporting showed the business had about $15 million in revenue per year and netted $1 million in profit per year. The owner took my call because he knew my name and was curious how I was related to my sister-in-law who’d taught his child in pre-kindergarten. We had a nice conversation and agreed to have lunch with my client. At lunch, he said his business’ revenues were actually about $80 million per year with more than $10 million in profit. When I asked why the report we had obtained contained a different figure, he said: “So people like you don’t bother me. If I gave the real numbers, every private equity firm and investment banker would be calling me.”

Those interested in bigger businesses can always leverage industry trade shows and hire investment bankers to do the buy-side work and knock on doors. Franchise fairs are a good option for buyers interested in franchises. Don’t forget to look at bankruptcies: Often you can have a good business with a bad balance sheet, and you can fix the business by buying and recapitalizing the business.

Something else that invariably surprises people: It takes much longer to find and buy a business than they imagined. We know people who have $5 million to $10 million cash to invest and want to move to Miami and buy a business, but they haven’t been successful after more than two years of searching.

So how can you do it? You roll up your sleeves and you network, call attorneys and accountants, search databases, and subscribe to receive e-alerts from websites that post business-for-sale opportunities. If you’re looking locally, you get involved in the community. If you’re more industry-specific, then you build a database of companies in that space. Attend trade shows. There’s no way around it: Finding a business to buy requires a lot of blocking, tackling and making phone calls every three months to the same people because you have to catch people when they are considering selling or try to pique their interest. Usually, that happens for a reason: when someone is sick, for instance, getting divorced or getting ready to retire. You must have your bait in the water when the fish are ready to bite.

• The best advice for finding the right business to buy: Match your skills and interests. Pick industries that you know or have experience with. South Florida has a lot of solid industries — cruise-related, real estate services (everything from construction to management to products), and import-export businesses like flowers and electronics, as well as all the usual industries like food, healthcare, distribution, logistics and transportation. A few key questions to ask yourself: Which of your skills would best translate to the potential new business? What sectors interest you and match up well with your skills? Do you need any special licenses or other qualifications to run the business?

• Narrow your target. The more you focus on specific criteria, the greater the chance you’ll find what’s right for you. When possible, get a good advisor to help you, especially if you’re coming from another country.

• Understand your finances. What can you realistically afford? Are you putting up all the money or will you need to find an equity partner or a lender? Be honest about your price range. A few key questions to ask yourself: How much can you spend on the business, how much collateral can you use, and how much income do you need to receive? Do you have good enough credit to secure financing from a bank or other lender?

• Know your motivations. Why do you want to buy the business? Are you doing it for the income or the lifestyle opportunities? For example, we know people who purchased yacht brokerage businesses because they like yachts.

• Consider the potential impacts on your lifestyle and your family. What types of hours do you want to work? Will you need to drive long distances or relocate?

• Be proactive. Network, talk to people, get some good advisors to help you.

• Be patient. Keep in mind that most sellers have likely been approached many times by potential buyers, so understand that you might not get every bit of information you need immediately. Buying a business takes time, sometimes months or years.

So, here’s the good news and the bad news: There are some good opportunities today and plenty of money available to leverage them — but there are lots of individuals, private equity firms and strategic buyers searching for those same opportunities. To succeed, you need a healthy balance of strategy, perseverance and, above all, patience.

James Cassel is co-founder and chairman of Cassel Salpeter & Co., LLC, an investment-banking firm with headquarters in Miami that works with middle-market companies. www.casselsalpeter.com


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Avanti has been acquired by the Avanti Management Team and Gen Cap America

  • Background:  Headquartered in Miami, FL, Avanti is an innovative leader in the consumer appliances industry, targeting the niche compact home appliances sector and offering consumers a complete line of products, including microwaves, gas and electric ranges, dishwashers, portable laundry machines, water dispensers, upright and chest freezers, and compact and mini-kitchens.
  • Cassel Salpeter:
    • Served as financial advisor to The Mackle Company, Inc. (owner of Avanti Products)
    • Ran a competitive sales process, identifying and contacting over 80 financial parties
  • Challenges:
    • Achieve significant price for family owner, while transitioning Avanti management team to minority ownership with private equity partners
    • Low growth business in a competitive space
  • Outcome: In November 2012, Avanti was sold to the Avanti Management Team and Gen Cap America, Inc., a private equity firm based in Nashville, TN.