Cassel Salpeter & Co. Represents Reservations.com with Capital Raise

MIAMI & ORLANDO, Fla.– Cassel Salpeter & Co., a middle-market investment banking firm providing financial advisory services, represented Reservations.com in a capital raise. The investment enables the company to continue to expand its business and online hotel booking platform.

“We appreciate the Cassel Salpeter team’s ability to secure the necessary capital to take our rapidly growing company to the next level”

Reservations.com is an Orlando-based provider of online booking services for more than 150,000 hotels across the United States and worldwide.

The Cassel Salpeter team, led byPhilip Cassel, identified and approached Versant Funding LLC, which provided the capital. Cassel Salpeter assisted Reservations.com through the closing of the transaction.

Cassel Salpeter, with its headquarters in Miami, has experience providing clients in diverse industries with a range of 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.

“We appreciate the Cassel Salpeter team’s ability to secure the necessary capital to take our rapidly growing company to the next level,” said Yatin Patel, co-founder of Reservations.com. “This capital will enable us to strengthen our business, expand our global roster of hotels, and implement a strategic digital marketing program. It also enables us to secure additional capital in the coming years from Versant Funding that will further strengthen our business operations.”

About Reservations.com

Reservations.com is one of the fastest-growing hotel reservation platforms helping millions of travelers per month easily search and book hotel reservations for top destinations worldwide. Reservations.com (https://www.reservations.com) aims to provide the latest technology, information and features to help travelers research and book hotels on Reservations.com website or over the phone. Travelers can save big with the best hotel room deals available online including group discounts (http://groups.reservations.com). Reservations.com offers excellent customer support including a 24/7 reservations help desk.

About Cassel Salpeter & Co.

Cassel Salpeter & Co., LLC 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 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.

Florida Private Equity Deal Flow Down In 2016

By Nina Lincoff

There were 96 private equity deals closed in Florida in the first half of 2016, which is slightly down from the 103 deals closed the same time last year, according to a new report form Miami-based private equity and investment banking firm Cassel Salpeter & Co.

But before investors run with news and declare a decline in private equity investment in the Sunshine State, there are a couple of factors to consider.

At this time last year, data revealed just 75 private equity deals in Florida – the first half of the year projections were updated later as a few more deals were reported.

“It’s a common thing that happens,” said James Cassel, chairman and co-founder of the firm. “Sometimes, a couple months later, adjusted numbers will come out and it’s not that the original data was wrong, it’s just that was the data available at that point in time.”

Cassel & Salpeter release private equity deal flow reports using data from PitchBook, an industry database and analyst. The reports include all private equity investments related to business growth – buyouts, add-ons, growth, recapitalization – made to companies headquartered in Florida, excluding real estate investments.

As with most businesses, deal flow has a lot to do with timing. Second quarter closures are often preceded by months of work, and when a deal closes, it’s largely circumstantial. Big events like tax changes and possible interest rate spikes can mean that companies prefer to close deals in one year as opposed to another, but largely when a deal closes depends on the players.

“Sometimes deals can slow down because of the due diligence,” Cassel said. “But everybody wants to close sooner rather than later. It’s just better that the deal is done.”

In talking to peer private equity firms, Cassel noted that some said January and February were slower months, which in turn affected second quarter closures.

Despite the slight drop in deals that close in the first half of 2016, the Florida market is still relatively stable.

“There are reasons why it should be a pretty healthy market. There is still plenty of private equity available, there is still plenty of debt available at [largely] historically low prices,” Cassel said.

One factor that could be contributing to a slowdown in private equity investments is simply a depleted supply of quality Florida-based deals. But it’s too early to tell whether or not supply has begun to dry up.

“There are businesses available,” Cassel said. However, private equity firms can cycle through businesses and do secondary buyouts, when one firm sells to another and that could buoy the deal flow pipeline in Florida.

Deal flow is also dependent on the buyer. Classic private equity firms buy on a five-year horizon, which limits possible investments. Strategic buyers can invest for life, or until it’s time to divest. Typically, when a family goes into business, it’s for a long time.

“Every private equity firm is a seller, whereas a strategic buyer is not and a family business may or may not be depending on the time,” he added.

Along with deals being down in the first half of the year, private equity exits are also up, meaning a firm has timed out and sold off the company. The Florida private equity investment-exit multiple hit an all-time low of 2.4x in the first half of the year. And while that’s a record low, it’s not a significant enough drop from 2015’s 3.1x multiple to sound an alarm, Cassel said.

The industries where private equity deals closed in Florida were largely consistent with past years. Business to consumer deals were high, as were business to business deals and healthcare. Financial services and IT were slightly less but consistent proportionally with last year, and energy and manufacturing were small to non-existent.

Florida is not an energy-rich or manufacturing state, so that’s not very surprising.

One challenge facing the business community in general is the difficulty of scaling up. It’s easier to start a small business and grow to five or 10 employees, but it gets exponentially harder to scale up to 50 employees or 100 or 500, Cassel said. As the inventory of small business increase, but middle-market firms remains stagnant or decrease slightly, private equity deal flow could be affected.

Moving forward through 2016, there are a couple variables that make it difficult to predict how deal flow will continue – the November elections, potential interest rate hikes, and in Florida, Zika.

“People are talking about one interest rate hike in December after the election, and there’s also talk about one in September, but who knows,” Cassel said. “If we really knew, my gosh what we could do with futures.”

 

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Use Great Finance Pros To Guide Planning, Strategy

By James S. Cassel

James Cassel headshotIn my experience working with middle-market business owners, I have often observed that many of them underestimate the importance of having access to solid and timely financial information and support from great finance professionals to guide their daily decision-making and strategic planning. Having seen companies and managers suffer the consequences of this risky practice, I have confirmed that it is critical to have the right financial support and infrastructure in place.

Why is this true? For one thing, many of today’s middle-market business owners may have started out with a spouse or other family member managing the company’s books and records on a part-time basis. However, as their companies begin to grow, it is important to determine whether people with different skills, sophistication and qualifications should be hired on a part-time or full-time basis, or whether those functions should be outsourced. Additionally, they must continuously evaluate and modify those roles and the personnel fulfilling the responsibilities as their businesses continue to evolve.

Middle-market companies may utilize different kinds of financial officers, such as certified public accountants, controllers and bookkeepers. Each of these professionals possesses different skill sets and sophistication relevant to providing financial data and information as well as managing relationships with banks, lenders, and suppliers, negotiating financial terms, dealing with customers in terms of reporting systems, providing financial oversight and strategic planning, etc. Depending on your needs, you may need finance professionals with more or less expertise and knowledge.

As you grow, you will need higher-level counsel and access to more information. It may become necessary to upgrade from a bookkeeper to a controller or from a controller to a chief financial officer, or even a CPA. Some individuals can step up to effectively assume the new roles, but other times you may have to bring in more experienced professionals. Outside consultants can also supplement or fill voids.

Many business owners get into trouble or lose potential opportunities because they didn’t have access to the right financial information on a timely basis. Again, the key is to take this seriously, accurately assess the level of expertise you need and hire accordingly. Staying ahead of the curve is always best. While some investment might sometimes be required, it will seem cheap in the long run when you reap the benefits.

Financial reporting should be done on a regular basis — daily, weekly or monthly. Developing appropriate flash reports and a dashboard is important. This will enable you to know — on a real-time basis — how your business is running and position yourself to make any necessary adjustments efficiently. Today, data analytics and business intelligence are crucial. Getting a first-quarter report at the end of the second quarter is not only virtually pointless — it can seriously hurt you because it may be too late for you to act. For some companies, obtaining an audit may be appropriate. While often costlier than a compilation or review, audits are valuable because they may be required by your lenders and can be helpful when you try to sell your business. Audits also bring a certain discipline to companies.

The types of financial management systems you put in place are important, too. Do you go with QuickBooks, QuickBooks Pro, or the more robust and sophisticated Microsoft Dynamics GP (formerly Great Plains), or other software solutions to obtain financial information and manage payroll, inventory, sales and other needs? Depending on your line of business, a fully integrated system that brings together your financial system with your inventory and other key aspects of your business can be important.

Beyond supporting your daily business operations, having the right support from finance professionals and the right financial information in place upfront is important as you prepare for growth or a merger or acquisition. I’ve often seen business owners scrambling to come up with information at the last minute, which has put them at a disadvantage in negotiations. In a sale process, for example, not having the necessary information at the right time can negatively impact what potential buyers may be willing to pay for the business. Outside consultants like South Florida-based SCA Group can be helpful.

While it may be tempting to focus solely on running the day-to-day operations of your business, it is critical to keep in mind that your ultimate success depends on how well you manage the company’s finances. By investing the necessary time and resources from the outset, you can put your business in the best position for continued growth and success.

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. He can be reached via email at jcassel@casselsalpeter.com or via LinkedIn at linkedin.com/in/jamesscassel. His website is casselsalpeter.com.

 

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Cassel Salpeter & Co. Represents Lang Group in its Sale to IG Design Group

MIAMI – August 18, 2016 – Cassel Salpeter & Co., a middle-market investment banking firm providing financial advisory services, represented Lang Companies in its sale to IG Design Group plc (formerly International Greetings plc).

Lang is a design-led supplier of high-quality branded consumer indoor and outdoor home and lifestyle products. IG is one of the world’s leading designers, innovators and manufacturers of gift packaging and greetings, social expression giftware, stationery and creative play products.

“We appreciate Cassel Salpeter’s deep understanding of our company, our industry, and what it takes to get a deal done,” said Alan Patrick, former CEO of Lang. “This deal is an important strategic move that will bring significant benefit to both companies, including an enhanced ability to meet our customers’ growing needs while providing both companies synergies in management, sourcing and cross-selling.”

The Cassel Salpeter team was led by James Cassel, chairman, and Philip Cassel, vice president.

Cassel Salpeter, with its headquarters in Miami, has experience providing clients in diverse industries with a range of 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.

Operating under three brands – Lang, Wells St., and Turner Licensing – Lang’s products include design-led giftware and gift calendars, with licenses such as NBA and NFL. The business has revenue streams with a complementary range of customer channels and live trading relationships with many U.S.-based national chains and more than 3,000 specialty gift stores. Additionally, Lang has established a direct-to-consumer sales channel through its own website and catalogs with more than 150,000 direct customers.

Jeffrey D. Cunningham with Seyfarth Shaw LLP provided legal representation to IG Design Group. Hayley Smith and Corey Fox with Kirkland & Ellis LLP provided legal representation to Lang.

About Cassel Salpeter & Co.

Cassel Salpeter & Co., LLC, 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 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.

Recession ahead? Prepare your business for risks

By James S. Cassel

James Cassel headshotSeveral timely issues and trends — today’s low interest and low growth rates, and the ultimate impact of Brexit — are making it critical for middle-market business owners to continually evaluate their businesses and implement the right strategies to protect their best interests.

While none of us have a crystal ball to know when the next recession will arrive, there is no doubt that every passing day brings us closer to it. So how do we plan for this and continue to grow our businesses without exposing our businesses to excessive risk when the next recession comes? While we should take risks as business owners, we should not bet the farm.

Following is some insight and guidance based on our experience helping clients navigate these issues throughout all types of economic cycles.

It is important to note that current estimates call for as many as three quarter-point increases in interest rates during the next 18 months. These increases are lower than previous estimates. In fact, some believe there will be fewer than three increases. Regardless, since interest rates will remain historically low, these increases should not be significant enough to warrant any concern.

Nonetheless, we should closely evaluate our balance sheets to make sure that we have taken adequate advantage of any opportunities in the near term and that we are well prepared for the downturn whenever it arrives. This includes determining whether we can extend the terms and fix the rates of any loans for as long as possible in order to take advantage of today’s low interest rates.

Now also is a good time to begin looking for opportunities to expand our businesses. While controlling costs is always important, profitable revenue growth is critical for success. We should consider strategic hires. The right hires with strategic relationships with potential new customers or clients can expedite growth. We should look for people with complementary skills that can offer more to current clients or customers can help deepen those relationships.

As the job market continues to tighten and we run the risk of losing some of our labor forces due to immigration policies, it will be important to evaluate new technologies that can help us increase efficiency and reduce the amount of labor required by our companies.

A good example may be found in the emerging trend of mechanization in the fast-food industry. New technologies that enable customers to place their own orders are making it possible for restaurants to need fewer employees. Restaurants also are increasing efficiency by equipping their servers with mobile devices that enable them to place orders online without having to go to the kitchen to place orders. Some restaurants are taking it a step further. Momentum Machines is attempting to replace human fast-food workers by fully automating the production of burgers — everything from cooking patties to adding all the accoutrements.

Car dealerships are another example. These days, they are giving mobile devices to employees to complete forms and speed up the process rather than giving them printed forms like in the old days. Computers, not only mechanics, are currently being used to do the diagnostics on cars. These all make businesses more efficient.

It also would be wise to explore new partnerships, joint ventures and other strategic relationships as well as potential acquisitions to strengthen and grow our businesses. We should consider investing in new businesses and/or new product lines in order to obtain organic growth. Research and development of new products should also continue.

Clearly, the domestic economy seems much better positioned than the foreign economy. No one knows what will happen in Europe with Brexit and what ultimate impact it will have. Thus, we might want to concentrate the majority of our efforts on domestic business, although not to the exclusion of any attractive opportunities for foreign sales. The uncertainty has strengthened the dollar, which will lower exports and make U.S. products less competitive abroad.

Although most U.S. businesses might not be doing great, they are still doing OK, so taking a longer-term view is important.

While middle-market business owners recognize they should be prepared for any expected obstacles and opportunities, they often fail to plan properly because they get too caught up running their day-to-day business operations and handling immediate issues as they arise. However, considering today’s dynamics, it is critical to work with trusted advisers who can provide the necessary guidance and help protect their best interests. Those who do can gain a significant competitive advantage and position their businesses for continued success.

 

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. 

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The LANG Companies has been acquired by IG Design Group

  • Background: Headquartered in Waukesha, Wisconsin, The LANG Companies, Inc. is a leading supplier of specialty consumer and gift products, offering some of the most well-known brands in the industry. Lang delivers innovative and exclusive products while holding licensing rights for several professional sports league, college, and other brands.
  • Cassel Salpeter:
    • Served as exclusive financial advisor to the Company
    • Ran a competitive sales process, identifying and contacting over 150 strategic and financial parties
    • Provided assistance throughout all phases of the sales process, due diligence, and auction through closing
  • Challenges:
    • Undertaking the sale of a specialized niche business within the declining calendar segment of the consumer products industry
    • Navigated the sale process after the Company underwent several strategic changes due to successful and failed initiatives
    • Maximized value and provided an exit for private equity investors and shareholders, while identifying a strategic partner looking to continue the legacy of the Company
  • Outcome: In July 2016, The LANG Companies, Inc. was sold to IG Design Group plc, a UK based designer and manufacturer of gift packaging and greetings, social expression giftware, stationery and creative play products.

Working with family requires the right approach

By James S. Cassel

James Cassel headshotWorking with family can be a blessing or a curse — for the family and for the business — depending on how you handle it. Here is some practical guidance for keeping your business and family life healthy.

The ugly truth is that some family members can have an entitlement mentality that can be a big problem for both the business and the family. They assume they deserve everything and should automatically come in at the top, and they can get offended if they think they are not getting what they believe they deserve. Based on what I have seen in my years of experience working with family-owned businesses of all sizes, I often discuss with clients the need for not only an investment banker and a lawyer, but also for a psychologist and a business coach to help them manage these touchy situations.

As an example of a family that did things “right,” recently I met with the owners of a manufacturing business where the son began working at the business at the entry level while he was in high school. He got to know everyone and every facet of the business, from the bottom up. Along the way, he developed strong relationships and earned the team’s respect. Eventually, he became the president and an equal co-owner of the business along with his brother and father. He expanded the business far beyond what his father had done and contributed so much more than his sibling that eventually his father restructured the equity so he would be better rewarded for his accomplishments. Today, the son continues to successfully run the company as the majority holder while working with his father and brother, and everyone is happy.

That family is one of the lucky ones. Others encounter major challenges while trying to incorporate or distance themselves from family members wanting to join the business. Years ago, I met with an 80-year-old patriarch who wanted to sell the successful family business. When I asked why he did not want to keep the business in the family, he pointed at his 50-year-old son sitting next to him who had been working at the company for many years and shouted: “What, am I going to leave my business to him? That would be the end of the business.” The son sank in his chair. This was demoralizing for his son, and there is no telling how this has affected the family relationship.

Fact is, family members often have to say “no” to those who may not be a good fit, despite their blood ties. The key is to deliver the message in the right way, or you can destroy the family and/or the business. While you need to be clear and direct, it is important to consider your unique family dynamics and err on the side of politeness and tact.

There is no doubt that families and businesses can be devastated by issues that arise, such as jealousies between siblings who are competing for the same positions or when an under-qualified or disruptive spouse wants to enter the business. Years ago, I became acquainted with a family business that the father had founded, and his two sons took control of. One brother was phenomenal, but the other was not as talented. Eventually, the phenomenal one had the presence of mind to suggest to his brother that he would increase his salary as long as he was no longer actively involved in the business. He did this in a nonoffensive way, and the brother accepted the arrangement. The family and the business thrived.

It can be easy for business owners to overestimate or underestimate the experience and capabilities of their family members and thereby place them in the wrong positions with too much or too little responsibility. In my experience, I have seen companies derive great value from giving people tests to ensure that they are in the right positions. There are all sorts of psychological and business aptitude tests to choose from that can help you make more informed business decisions. I have also seen companies benefit from relying on external boards or bringing in outside business consultants to help navigate these decisions and conversations. Having the family members trained by non-family members can also help.

Working with family can be very rewarding and a tremendous opportunity, but like most things in life, it must be managed right. The bottom line: It is important to apply sound business practices and be honest with your family, while at the same time using good psychology and managing things with tact.

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. 

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Cassel Salpeter & Co. Represents Avenger Flight Group with Growth Capital Financing

MIAMI – June 6, 2016 – Cassel Salpeter & Co., a middle-market investment banking firm providing financial advisory services, served as exclusive financial advisor and facilitated a growth capital financing for Avenger Flight Group. The investment will enable the company to expand its services and geographic reach.

Avenger is a South Florida-based provider of commercial aviation simulation and training services to domestic and international airlines, using state-of-the-art simulators located in strategically convenient locations including: Fort Lauderdale; Las Vegas; Mexico City; and now Dallas.

The Cassel Salpeter team, led by Director Joseph “Joey” Smith and Vice President Marcus Wai, identified and approached Patriot Capital and Seacoast Capital, the private equity firms that provided the capital. Cassel Salpeter assisted Avenger through the closing of the transaction.

“We recognized that Avenger is a high-growth company in a unique and defensible sector within the commercial aviation industry and were eager to get involved with a company of this caliber and support its next phase of growth,” Smith said. “We enjoyed working with Avenger, Patriot, Seacoast and their excellent deal teams, and we look forward to our future collaboration.”

Cassel Salpeter, with its headquarters in Miami, has experience providing clients in diverse industries with a range of 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.

“We greatly appreciate Cassel Salpeter’s ability to understand our needs and move quickly to address them by finding the type of strategic partners we wanted: ones that would offer more than just capital,” said Avenger President and Founder Pedro Sors. “Patriot and Seacoast were able to quickly grasp the passion and vision for the future of the company. We are confident that this will be a long and successful relationship for all parties.”

The Patriot team was comprised of Managing Director Daniel Yardley, Senior Principal Charles Bryan, and Associate Jonathan Cope. “Patriot is excited to partner with Pedro and the Avenger team,” Yardley said. “We are very impressed with what they have been able to accomplish by focusing on delivering a best-in-class experience to their aviation partners and look forward to supporting them in their continued growth.”

Added Seacoast Partner Thomas Gorman: “Pedro Sors and his team at Avenger have built a unique and promising company that provides a critical service to the domestic and international commercial aviation industry and flight training community.” The Seacoast team was comprised of Partner Thomas Gorman and Associate David Romagnoli.

Salazar Jackson, LLP, Partner Linda Jackson supported Elsa Gagnon, Avenger Flight Group’s Vice President & General Counsel, in the transaction. John Evans and Chris Fowler of Moore & Van Allen PLLC represented Patriot Capital and Seacoast Capital.

 

About Cassel Salpeter & Co.

Cassel Salpeter & Co., LLC 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 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.

About Avenger Flight Group

Avenger Flight Group is a provider of commercial aviation simulation and training. Avenger provides simulation training to domestic and international airlines using state of the art simulators located in strategically convenient locations in Ft. Lauderdale, Las Vegas, Mexico City and now Dallas, Texas. Avenger also provides classroom training for trainers and pilots. The company is led by an experienced management focused on meeting specific customer requirements in an environment dedicated to exceeding and surpassing all expectations.      For more information, please visitwww.afgsim.com

About Patriot Capital

Patriot Capital is a leading source of growth capital for middle market companies seeking to finance business expansion, acquisitions, management buyouts or balance sheet recapitalizations. Patriot senior deal professionals each have more than 20 years of diverse corporate finance experience, providing companies with capital and seasoned business judgment for transactions. Patriot Capital utilizes a disciplined investment strategy developed over many years that focuses on capital preservation, consistent earnings growth and income generation. Patriot Capital has invested in and managed companies successfully through varying periods of economic expansion and contraction. Patriot understands and employs successful strategies and tactics needed to guide our companies through these periods.

For more information, please visit www.patriot-capital.com

About Seacoast Capital

Seacoast Capital invests mezzanine and equity capital in small, growing companies led by strong, entrepreneurial management teams. Seacoast invests in high quality U.S. businesses that are market leaders in our target industrial sectors of manufacturing, distribution, business services and industrial technologies. The investment opportunity may be an acquisition, management buyout or internal growth. Seacoast has a particular interest in companies located in underserved urban and rural markets. In all cases, Seacoast partners with managers who have proven track records and significant equity stakes. With over $300 million of funds under management and over 50 investments since 1994, Seacoast Capital is among the nation’s leading mezzanine investors in our target small company sector. Seacoast’s demonstrated ability to respond quickly and offer value beyond dollars makes Seacoast Capital an excellent financial partner. For more information, please visit www.seacoastcapital.com

Cassel Salpeter & Co. Adds Noted Healthcare Investment Banker Ira Z. Leiderman as Managing Director, Healthcare

MIAMI – May 23, 2016 – Cassel Salpeter & Co., a middle-market investment banking firm providing financial advisory services, has added Ira Z. Leiderman as Managing Director. Leiderman is noted as a highly experienced healthcare investment banker and executive.

Cassel Salpeter’s advisory services include: mergers and acquisitions; equity and debt capital raises; fairness and solvency opinions; valuations; and restructurings, such as 363 sales and plans of reorganization. At the firm, Leiderman will utilize his extensive expertise and relationships within the healthcare and life sciences investment banking and U.S. capital markets to further clients’ goals.

“Ira is a skilled healthcare investment banker with a wealth of experience and insight that will bring significant value to our clients and our firm’s growing healthcare practice,” said James Cassel, chairman and co-founder of Cassel Salpeter. “Cassel Salpeter will continue to expand in response to the increased demand for our healthcare industry expertise.”

Prior to joining Cassel Salpeter, Leiderman was the founder and managing partner of Long Trail Advisors, a life sciences advisory firm and mergers and acquisitions boutique. Ira also served as the co-head of Ladenburg Thalmann & Co.’s Healthcare Group, headed the Healthcare Group at Punk Ziegel, and served on the firm’s management committee. He also served as a member of The Palladin Group, an investment-management firm where he oversaw investment transactions in public and private life sciences companies. He joined Palladin after leading the healthcare practice at Gerard Klauer Mattison (now part of BMO).

Throughout his career, Leiderman has successfully led numerous transactions, including mergers and acquisitions, private placements, public offerings, follow-on financings, and valuations. He has conducted strategic advisory work for companies in the healthcare and life sciences sectors. His experience also includes providing guidance on investments in healthcare and life sciences companies in the United States, Europe, and Israel.

About Cassel Salpeter & Co.

Cassel Salpeter & Co., LLC 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 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.

Thinking of selling your business? Avoid these costly mistakes

By James S. Cassel

James Cassel headshotFor middle-market business owners thinking of selling their businesses, it can be easy to make a common — and costly — mistake: having the wrong valuation expectation. Influenced by hearsay and news reports of high valuations related to larger businesses and mega mergers and acquisitions, they develop overinflated expectations for the value of their own companies. As a result, they put themselves in a position of becoming disappointed, wasting time and resources, and missing opportunities.

Business decisions must be made using facts rather than emotions or
unfounded assumptions. Based on my experience working with middle-market business owners, here are some of the common factors that can negatively impact or shade their judgment. All of these are easily avoidable.

It happens all the time: Business owners hear that people they know or companies in their industries received high values for companies. Sometimes the reports are true; other times, they are fiction. In either case, business owners draw inaccurate comparisons and conclusions about what they can expect to get for their own companies. When anyone tells you they sold for a high value, do not assume this is any indication of what will happen when you sell your business.

First, you should confirm whether those sellers really received those values. Sometimes it is impossible to obtain this information. People often embellish.

If they really received those values, you must determine whether your business
is positioned to get a similar value, and you should identify the considerations and preparations necessary to secure the highest possible value.

Did those people you know sell early to consolidators who paid a premium, and now that those consolidators have completed those acquisitions, do the consolidators no longer need to acquire your company at a premium? Did you make a mistake by not selling first?

You must know how to accurately compare your business to those other businesses. Are your revenues the same? Do you have the same profitability and margins? Can your potential buyers find synergies by eliminating costs, consolidating parts of your business, or implementing new measures to achieve greater efficiencies? What have your key growth drivers been? Good advisors can help you navigate these questions.

Every company and industry is different, and while it is important to compare yourself to others, you must recognize the differences between your company and similar ones so you can properly assess your own situation. Additionally, timing can impact the valuation you can achieve.

For example, while Burger King and McDonald’s both franchise restaurants that sell hamburgers, they have different business models. McDonald’s owns or secures long-term leases for its franchise locations and Burger King does not. This affects restaurant performance levels, thereby affecting value.

Moreover, companies in different industries have different valuations. Tech companies can receive higher multiples than distribution companies because they have higher margins, profitability and, in many cases, greater growth.

Some business owners also get too emotional, their perceptions become clouded, and they fail to understand true valuation. Some think they should set the sales price of their companies based on the amount of money they need to maintain their current lifestyles. This is not a realistic approach.

Like it or not, here are the facts: A business is worth whatever a ready, willing and able buyer is willing to pay for it. Buyers want to pay what your business is worth today and not what it will be worth in the future. Buyers also generally do not want to pay for synergies: They want synergies to be among the advantages they gain in the acquisition.

Sellers also make inaccurate assumptions when they neglect to consider expense factors that may affect the companies’ profits after the sale.

Buyers will consider these factors when determining how much they are willing to pay, so you should consider this upfront and plan accordingly. For example, if you get business because your company is minority and/or woman-owned, what will happen if you sell and these advantages are lost?

For middle-market business owners thinking of selling their businesses, it is important to work with trusted professionals who can provide sound guidance as to value and process. Do not blame the messengers if they do not say what you want to hear. Everyone on the seller’s side wants to sell for the highest price, but to maximize values it is important to be realistic and use sound decision-making. Otherwise, you run the risk of missing valuable opportunities to sell your business at a realistic price to legitimate buyers.

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.

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