YOUR MONEY-Graduating Into the Family Business

To view the original article, click here.

By Beth Pinsker
June 2, 2015

There is one big advantage 23-year-old Clint Morrison has found joining his family’s business fresh upon graduating from Rider University: he has a job, while most of his friends do not.

“They’re all still sort of scrambling,” Morrison says.

The Morrison family business, Benefit Design Specialists Inc, administers employee benefit plans for small businesses and is based in Mechanicsburg, Pennsylvania. Dad Tim employs not only his youngest son, Clint, but also two older sons, ages 27 and 29, as well as his own sister, a sister-in-law, a cousin and about 10 other non-related employees.

The key to a harmonious office with so many family members? “You have to find a spot for them to be productive or they won’t make it in the family business,” the patriarch says.

Here are some tips on joining the workforce – with your relatives, according to family business experts:

START ELSEWHERE

There is no official tally of how many “& Sons” or “& Daughters” are among the 28 million small businesses in the United States, according to the Small Business Association.

Yet one of Clint Morrison’s business professors advised him not to start in the family business. The advice: go elsewhere and garner some knowledge of the industry first. Given the state of the job market and his family’s specialty niche, Morrison decided that was not feasible.

The strategy worked well for Laura Salpeter, who got a law degree and then worked for a few years at a law firm before joining her father Scott Salpeter’s Miami-based investment banking firm, Cassel Salpeter. Also working there, after a few years of getting experience with other companies, is Philip Cassel, son of Scott Salpeter’s partner. Both offspring are now 30.

“Working with my father was something I’ve always contemplated. So I dived into the business world and found out more about what it is,” said Cassel.

WORK YOUR WAY UP

Even if you spent your childhood playing in the family factory, that does not mean you are going to walk into a corner office once you get your diploma.

Robert Spielman, a partner in the tax and business services unit at Marcum LLP, advises clients that it is their job to make sure their kids are exposed to all aspects of the business, especially if they expect to hand it over to them one day.

For example, one of his clients, a fish distributor, hired several family members for its sales force. “But none learned how to manage the business, and eventually, they had financial troubles,” Spielman said.

The best way is to start at the bottom and experience all areas of the enterprise. If the family business is a trucking company, start out in maintenance, then drive for six months, go into sales and then assist in the financing side before managing the fleet and employees, Spielman says.

MANAGE EXPECTATIONS

The family business dream – that someday, all of this will be yours – can be a great motivator, but it can also instill an unwieldy sense of entitlement.

This happened to one family business owner client of Steve Faulkner, head of private business advisory for J.P. Morgan Private Bank’s Advice Lab. The son was lording his status over his coworkers and superiors, saying “Someday, I’m going to own all of this, and fire everyone I don’t like.”

When the son’s manager finally had the courage to tattle to the boss, he fired his own son. However, two months later, when the son could not find another job, the boss asked another manager to hire him back.

“That’s a horrible succession plan,” said Faulkner.

It is better, he says, for business owners to get their relatives to work harder than they ever have to be worthy to take over the reins.

Another of Faulkner’s clients does exactly this, down to a formalized training program for the fourth generation that is now joining the business. Newcomers spend up to six years training at international subsidiaries before being brought back to headquarters for management jobs.

The process drills respect into the employees, something Laura Salpeter says she has learned on the job.

Her top advice for those joining the family business? Understand you are working for your parent, not with your parent.

Navios, May 2015

Giving back to the community is smart business

To view the original article, click here.

By James S. Cassel
May 17, 2015

James S. Cassel

Giving back can be great for the community and your business.

Companies and their people who support a healthy mix of charitable, community and business organizations tend to reap significant rewards. In addition to helping the community, this helps companies foster employee satisfaction, strengthen bonds with potential clients and referral sources, develop brand awareness, and position their brands in a more positive light. The relationships cultivated throughout this process also can create business and social opportunities that last a lifetime.

While many business owners recognize this potential, some struggle with implementing the right programs. They wish they had a crystal ball to know which organizations will bring the greatest personal satisfaction and business growth. Until we find that crystal ball, I can share some practical guidance I have found helpful for business owners navigating these issues.

First, identify and focus on your goals. Where do you see the future of your business and its growth? Then, determine what audiences you must reach to help you get there, and identify the community, charitable or business organizations with which these audiences are most involved.

Based on these considerations, examine your personal interests that align with these organizations. Are you more interested in organizations that mentor children or support technology growth? Focus on organizations that reach your target audiences while engaging you and your employees. This CANNOT be just for business. There must be a genuine interest in getting involved or it will not benefit anyone.

This is particularly true for board involvement. If you join a board but seem disengaged and rarely attend meetings, everyone will recognize that your heart is not in the cause. Conversely, serving actively on a board where you can roll up your sleeves, support the organization’s mission and demonstrate your skills is a powerful way to build relationships and therefore business.

Generally, organizations can be divided into three categories:

▪ Charitable organizations support philanthropic goals and social or public interests, such as the National Parkinson Foundation or World Wildlife Fund.

▪ Community organizations serve specific communities and may address specific interest or needs. Examples include United Way of Miami-Dade, Children’s Bereavement Center and Lotus House.

▪ Business organizations are nonprofit entities supporting commercial goals. They service civic needs and are a good place for networking as it plays a central role in chambers of commerce and other business organizations.

There are many ways to get involved. While writing checks is important, it is not enough for relationship-building. Depending on your company size, you may limit the involvement on company time, or you may offer your employees paid time to volunteer. You may provide a donation-matching program, schedule charitable group activities and encourage employees to find causes they’re passionate about. You can also support involvement after business hours.

The most basic involvement is attending events. This is a good way to meet new people and become more familiar with organizations and their people and confirm whether the organizations will be a good fit.

If you seek to build relationships, you should get involved with the committees or boards. Make sure you are comfortable with the organizations and their operations, and at that point, consider how you can get more involved. Again, follow your passions so it will be easier for you to stay committed long-term.

To build the right relationships, you must have a plan. Set realistic, quantifiable goals and specific steps to achieve them. For example: “I want to build a relationship with John Smith and Jane Doe.” So pay it forward and help them out. John is a fan of the Miami Heat, so invite him to a game. Jane wants to get more business from real-estate developers, so introduce her to some of your contacts.

When the time is right, however, you must ask for the business. Some people never get business because they don’t ask.

As the saying goes, “fish bite when they’re hungry,” so it’s important to keep your bait in the water. Stay top of mind with people after you have met them, such as a company newsletter or an occasional email to touch base, so that they will think of you when a business opportunity arises. Don’t make the mistake of meeting people and never following up.

Without a doubt, you can actively give back and support worthy causes while growing your business. The key is to develop a plan that will best support your goals and objectives in terms of personal satisfaction and business growth.

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

Ruthigen March 2015

Biscayne, March 2015

Levon, March 2015

Tiger, December 2014

2014 South Florida Middle-Market Mergers, Acquisitions and Financings Review

By  Joseph “Joey” Smith, February 12, 2015 

In South Florida, 2014 was an active year for many outstanding middle-market companies.  This positive activity can be seen in both the velocity of the transactions completed and the relatively high valuations achieved.  The “perfect storm” that contributed to their successful closings includes: (1) strong, scalable business models; (2) management teams that innovate and execute; (3) a strong economy, with low interest rates in place; and (4) a plethora of value-added institutional investors with access to inexpensive capital.  These factors contributed to higher valuations and more favorable deal terms for the middle-market companies with the foresight to position themselves for sale or growth capital. The most notable and largest of the transactions seem to have taken place in the fourth quarter. Although not a middle-market transaction, South Florida lost one of its favorite “sons,” with its home-grown Burger King combining with Tim Horton’s of Canada in an $11.4 billion tax inversion transaction in August. The merged company, Restaurant Brands International, with more than 18,000 restaurants worldwide, will be based in Canada. However, Burger King will still have a meaningful corporate presence in Miami.  The most notable sale transaction and growth capital transaction for 2014 are highlighted below. Both companies exemplify superior leadership, vision, teamwork, and execution of their business models.

Sale: Simply Healthcare Holdings, Coral Gables, Fla. – In December, Mike Fernandez did it again. The self-made, serial entrepreneur and billionaire sold his Simply Healthcare Holdings (owned by his private equity firm MBF Healthcare Partners) for just under $1 billion to Anthem, Inc. (NYSE: ANTM), one of the largest insurance companies in the nation, based in Indianapolis, IN.  Founded in 2010, Simply Healthcare offers Medicare and Medicaid plans to about 200,000 Floridians. Simply Healthcare’s revenues were expected to approach $1 billion in 2014, up from $458 million in 2013, and $182 million in 2012. The sale follows another 2014 MBF Healthcare exit, with the sale of the local, Miami-based Navarro Discount Pharmacy chain to CVS Health Corporation (NYSE: CVS).

Growth Capital: Star2Star Communications, Sarasota, Fla. – In December, Norm Worthington, the founder and owner of Star2Star, chose from more than 20 offers received to accept $30 million of growth capital, led by NewSpring Growth Capital of Radnor, PA. Star2Star has been self-sustaining since 2009, which is highly unusual for a technology centric company.  Star2Star accomplished what many others have failed: to use the internet to unify communications for businesses, combining voice, video conferencing, and instant messaging in a cloud-based platform. The 2014 Inc. 5000 List of the fastest-growing private companies during the preceding three years ranked Star2Star No. 1971, with estimated revenues of $33 million and 200 employees in 2013, up from $10 million in revenues and 100 employees in 2010. It is estimated the company has 150,000 business users at 30,000 locations across the U.S. and Canada. Kudos to Norm and his team for a job well done, but also for creating a force to be reckoned with for years to come.

Highlights of South Florida’s Top Middle-Market Mergers & Acquisitions for 2014:

Ladenburg Thalmann (NYSE: LTS) Miami-based financial services company which continued to grow its independent advisor and insurance platform with its August acquisition of Highland Capital Brokerage, a Birmingham, Ala., insurance broker for $42 million. The Dr. Frost-controlled financial services juggernaut continues to successfully execute its growth plan, as evidenced by its positive stock market performance.

Citrix, (NASDAQ: CTXS) Fort Lauderdale, Fla.-based technology company has continued to make strategic tuck-in acquisitions, as evidenced by the September purchase of Virtual, based in Delray Beach, Fla.  Citrix also acquired RightSignature, a Santa Barbara, Calif.-based electronic signature company in October for $37.5 million in cash.  Citrix’s aggressive acquisitions, combined with its organic growth, continues to remind us that it is South Florida’s largest and most successful technology company. Founded 25 years ago in South Florida, Citrix has innovated its way to a $10 billion market capitalization.

MEDNAX (NYSE: MD) Sunrise, Fla.-based healthcare company which operates a network of medical practices with over 2,500 physicians in 34 states, has continued its acquisitive spree with the September purchase of MedData, a revenue cycle management, billing and coding company.  In addition, Mednax acquired approximately a dozen physician group practices in 2014.  Founded 35 years ago in South Florida, MEDNAX continues to grow and flex its muscles with a healthy $7 billion market capitalization.

Bankrate (NYSE: RATE) North Palm Beach, Fla.-based financial news firm acquired mobile finance company Wallaby Financial in December. Bankrate will combine Wallaby’s suite of products and proprietary technology with its existing credit card distribution platform. This transaction closed out an active year for Bankrate, which also acquired Caring, Inc., in May for $58 million in cash. Caring is an operator of online destinations for caregivers seeking information and support for aging parents, spouses, and other loved ones.

BBX Capital (NYSE: BBX) Fort Lauderdale, Fla.-based company and the former parent company of Bank Atlantic continued its sweet consolidation in the chocolate and confectionary industry with its January purchase of Williams & Bennet of Boynton Beach, Fla. This transaction follows the tasty acquisitions of Hoffman’s Chocolate of Lake Worth, Fla., in 2013 and Jer’s Chocolates of Solana Beach, CA. in July 2014.

CBIZ (NYSE: CBIZ) Cleveland, Ohio-based accounting and consulting firm continued to expand its South Florida footprint with the November purchase of Weekes & Callaway, an insurance agency in Delray Beach, Fla.  CBIZ, the seventh-largest accounting firm in the country, had already added valuable inventory with the 2010 acquisition of the long-standing firm, Goldstein Lewin & Co. of Boca Raton, Fla.

MDLIVE Sunrise, Fla.-based telehealth provider of on-demand healthcare delivery services acquired Breakthrough Behavioral, a Silicon Valley, Calif., firm in November to expand its teletherapy network of behavioral health specialists.  In January, MDLIVE announced it received $23.6 million of funding led by Heritage Healthcare Innovation Fund, Kayne Anderson Capital Advisors, and others.

CheckAlt Los Angeles-based leader in Check 21 payment and item processing solutions for financial institutions and merchants acquired ERAS, a Miami-based subsidiary of Diebold (NYSE: DBD) in June. ERAS, with more than 100 employees, delivers item and payment processing solutions for regional banks, community banks, and credit unions.

Majestic Properties Miami Beach, Fla.-based real estate brokerage firm was acquired in June by Douglas Elliman, the largest residential real estate brokerage firm in New York. Since inception, Majestic Properties has brokered more than 3,000 condo sales in Florida, valued at more than $3 billion.

Vantage Hospitality Group Coral Springs, Fla.-based hotel franchisor acquired America’s Best Franchising, Inc.’s six hotel brands and network of 225 hotels in July.  Vantage, the eighth-largest hotel company worldwide, has grown rapidly to comprise more than 1,200 independently owned and operated hotels. Vantage is well positioned to provide strategic advantages and a commanding view.

The Fresh Diet Miami-based gourmet meal delivery service company was acquired in a $10 million-plus stock transaction in August by Innovative Food Holdings (OTC: IVFH) of Bonita Springs, Fla.

Verbatim Support Services Fort Lauderdale, Fla.-based court reporting service acquired its competitor, Apex Reporting Group, and four affiliated companies in October from Sunbelt Diversified Enterprises, a Miami-based private equity firm. Verbatim gained 75 additional court reporters to augment its current 41 employees.

Highlights of South Florida’s Top Venture Capital Financing Deals of 2014

South Florida companies attracted significant venture capital in 2014 from local investment and angel groups to venture capital and corporate investment from Silicon Valley giants. The largest financing for the region was from Magic Leap, a Dania Beach, Fla., augmented reality startup, which hauled in more than $500 million led by Google (NASDAQ: GOOG) in October. Additional participants included a who’s-who list of venture and strategic investors:  Andreessen Horowitz; KKR & Co. (NYSE:KKR); Kleiner Perkins; Legend Pictures; Obvious Ventures; QUALCOMM Ventures; and Vulcan Capital (Paul Allen’s investment vehicle).

Modernizing Medicine Boca Raton, Fla.-based provider of electronic medical record systems for physician groups received $20 million in November led by existing investors, Summit Partners and Pentland Group. The company, co-founded and led by serial entrepreneur Daniel Crane, is wired to add 100 jobs, and has raised $55 million in capital since inception in 2010.

Pure Life Renal Hollywood, Fla.-based provider of kidney dialysis services announced that it has received commitments to raise $21 million in venture capital funding, led by Montreux Equity Partners and Noro-Moseley Partners. The company subsequently closed on $10.5 million in April.

Aeropost International Miami, Fla.-based mail and package forwarding company raised $5 million, led by North Bridge Venture Partners of Waltham, Mass.  Aeropost offers AeroProtect, a service providing protection in case of loss, damage, wrong items, factory defects, or items under warranty by the supplier.

AdMobilize Miami Beach, Fla.-based big data company providing real-time metrics and intelligence for outdoor and indoor advertising raised $2.2 million in May led by Azoic Ventures and Rokk3r Fuel.

Kairos Miami, Fla.-based technology company received $1.2 million in February.  The facial recognition technology provider’s financing was led by New World Angels of Boca Raton, Fla., along with Innovision Ventures, True Ventures, venVelo, among others.

Avisena Miami, Fla.-based revenue-cycle management and medical billing company landed an additional $1 million from an existing investor, WFD Ventures, a venture capita

Reflecting on 2014, Thoughts on 2015
 
“The person who says that it cannot be done should not interrupt the person who is doing it.” 

– Ancient Chinese Proverb

 

At Cassel Salpeter & Co., we have been getting it done for years in the most interesting of times.

Reflecting on 2014, Thoughts for 2015

As 2015 begins, it is important to reflect on the past year, evaluate our performance, and take the necessary steps to ensure that we are best prepared for things to come.

The good news: Things are looking bright on a national level. Despite a volatile stock market and challenging international situations in 2014, we are excited that 2014 helped to position us for a strong 2015. Today, the market is creating opportunities to sell your company or raise capital.

Moreover, in our backyard, Florida continues to gain increasing importance as a hub for investment, deal activity, technology and general business growth. There are many opportunities to take advantage of this resurgent climate and position your business for continued growth.

 

Cassel Salpeter & Co. Celebrates
Another Strong Year

 

For the team at Cassel Salpeter & Co., 2014 was another strong year. Thanks to our valued clients, partners and other friends for continuing to make possible our continued growth and success.

 

Some highlights included:

  • Successfully handled more than 50 assignments in a broad range of industries, including healthcare, financial services, business services, retail, technology, and industrial. Our team worked on behalf of family businesses, financial sponsors, public companies, boards of directors and special committees.
  • Published the Florida PE Deal Report: View of Florida, a semi-annual report recapping PE deal flow in Florida. Click here to view.
  • James Cassel continued to share his subject-matter expertise as a middle-market columnist for The Miami Herald.  He also was featured in a spectrum of local and national media, including: Bloomberg, American Banker, The Deal; Mergers & Acquisitions Magazine, Daily Business Review, and Florida Trend.
Changes in 2015 to Watch That May 
Impact Your Business

There is a high likelihood that changes in 2015 in interest rates, unemployment rates, demand curves, and the prices of oil, real estate, and health care will affect your business in one way or another.

No matter what vertical your business operates in, 2015 presents a strong market for sellers with more buyers than sellers in the market as well as attractive financing options available for buyers. However, it’s important for middle-market business owners to keep a close pulse on these key changes in order to protect their best interest and ensure their businesses are in the strongest position in 2015. As always, it’s important to consult trusted professionals with subject-matter expertise who can help develop the right strategic plans to overcome the obstacles and seize the opportunities.

 

Click here to read James Cassel’s article about this topic, which was published on January 19, 2015, in The Miami Herald.

Contact Cassel Salpeter & Co. Today

At Cassel Salpeter & Co., we are excited about the growing demand for our guidance from middle-market and emerging growth companies in the U.S. and worldwide related to mergers and acquisitions, capital raising, fairness & solvency, valuations, restructurings, and general advisory services.

Please feel free to contact us today to learn more about how we can help you.
 
 
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, its 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, its 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.  
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Vapor Corp., December 2014