Small Business Owners Should be Aware of ‘Lender Fatigue’

Small businesses have a responsibility to evaluate their lending relationships and to look for signs of lender fatigue.

By: James Cassel

To view original article click here.

MIAMI, Florida, January 16, 2012 – Earlier this month, it was reported that Bank of America capped credit lines and restructured repayment plans for an undisclosed number of its small business customers. The move came as a complete surprise to some of these business owners. After all, the capital market is supposedly rebounding, and economic forecasts for 2012 have been encouraging. So, could these small business owners have predicted a falling out with their bank?

Perhaps. Small businesses, more vulnerable and considered more risky by lenders, have a responsibility to evaluate their lending relationships and to look for signs of lender fatigue – signals that their ability to borrow capital may be threatened. I have identified some of the reasons why your bank might consider changing its relationship with you. Some may be the result of what you do, and some may be out of your control. Stay aware of these signs, so you’re not caught by surprise.

Sinking revenue: Smaller businesses have a smaller “capital cushion” to deal with lean times. Even as the economy recovers, your business’ revenues may be lower, and they may not be keeping pace with expectations. Your bank can interpret your revenue challenges as signs of operational issues. In the past, the bank may have been patient, but now they may feel pressured to talk action.

Depreciating collateral: In a crunch, assets – and therefore collateral – may take a hit. Perhaps the value of the property you used as collateral for your business loan has declined in value. If the value of your collateral falls precipitously, your lender may look twice at your credit line, ask for more collateral or pull the plug altogether. Here’s a tip: Think twice before mortgaging an additional property. It may satisfy your lender for a while, but it may hurt you in the long run.

Poor communication: Have you been out of contact after making promises that did not come to fruition? You may lose credibility if communication breaks down between you and your lender during financial troubles. An open line of communication can go a long way.

Lack of customer diversity: If your business works with only a few large customers or clients, especially if your revenue is concentrated with a finite number of sources, your lender may consider this a liability.

Certainly, all small businesses cannot predict their lenders’ moves, but they can be proactive about finding alternative sources of funding. Every year, you should examine your access to capital and your lender’s portfolio.

If you are unhappy with your loan, make a move to change it. Don’t wait until you’re in trouble. Money is available, particularly from local banks, and small businesses are the key to economic stabilization in the United States.

Lenders (and I’m not only referring to big banks) want to put their increased liquidity into potentially profitable small business loans. After all, lenders and banks make their money by lending money.

To make the most of these opportunities, business owners need a diverse approach to sourcing capital. Sometimes, that means calling in the help of an intermediary like an investment banker, and sometimes it’s as simple as knocking on the doors of community banks and credit unions or finding lenders’ business cards in your desk drawer. Regardless, when it’s time for tracking down new money, keep these tips in mind:

1. It’s not just about the interest rate.

When shopping for a loan, compare more than interest rates. Be sure to determine what, if any, prepayment penalties exist, and on what basis your lender can demand full payment. Look at the loan covenants to make sure there is sufficient leeway to prevent a minor glitch from causing a default. Grace periods, notice and right to cure are crucial.

2. Look for a lender who works with small businesses.

When you research lenders, look for ones with a healthy balance of small businesses and large companies in their portfolios. This means they are willing to work with more than just large loans and “safe” options.

3. Take a closer look at the diversity of lenders’ portfolios.

Ask how much exposure the lender has in your industry. It is not uncommon for lenders to reduce their concentration in an industry by asking borrowers to find a new lender.

4. Wait on an independent valuation.

Paying for a valuation – before you have a lender – is a waste of money. Wait to get a bank in the process. If you appraise first, you will end up requiring a second appraisal. Many times, they will examine the collateral internally.

5. Embrace alternative capital sources available to middle-market companies.

Don’t forget about capital sources that can fund operations until you can secure funding from a bank, like factoring (the purchase of receivables), purchase-money financing, and asset-based, non-bank lenders.

While finding a lender always requires some “heavy lifting,” this year you will also face more funding sources in your community and a friendlier lending market.

Also, don’t forget that sourcing capital can require outside professional advisors, such as investment bankers or even fellow middle market business owners. Even if you’re not looking for a loan, you should make a resolution to evaluate where you stand with your bank – and look at those “warning signs” – so that you can make an informed decision.

If your lender calls your loan or sends you a default notice, it is important to contact a lawyer before you sign anything or agree to the terms of a forbearance agreement. Don’t despair if your bank severs ties or restricts your existing line of credit – at least you’re not looking for a loan in a credit crunch. Smaller companies are invigorating our economy, and they need capital to continue. It’s up to you to find out where they are – or enlist a professional to help you do it.

 

A ‘Wish List’ to Spur Growth of Small Businesses

Small businesses are the lifeblood of the nation, however, they face innumerable roadblocks that stifle growth, and in turn, stifle the overall economy.

By: James Cassel

To view original article click here.

MIAMI, Florida, December 18, 2011 – Turn on cable news, and it’s not long before a political candidate or a pundit tells us how small business growth is the key to a healthier economy. Well, they’re right. That’s because more Americans work for small businesses than large companies, and small businesses create 65 percent of new jobs in the United States.

But what is a small business? The term itself means a lot of different things to different people. When we hear the term “small business,” most of us probably think of a single-location boutique, a mom-and-pop restaurant or an auto repair shop. However, check with the Small Business Administration (SBA), and you’ll find that companies in certain industries have hundreds of employees, earn tens of millions of dollars in revenue, and are still considered small businesses.

It’s this amorphous definition that causes so much confusion. Let’s keep it simple. For the purpose of this column, we can consider small businesses any company with less than a few hundred employees.

These firms are truly the lifeblood of our nation, however they face innumerable roadblocks that stifle growth, and in turn, stifle the overall economy. In order for small businesses to thrive in a more sustainable way, they require streamlined regulations at the local, state and federal levels, as well as a little TLC. More specifically, I’ve put together the beginnings of a “wish list” on behalf of America’s small businesses that would position them for real, achievable growth, because I believe this is who will solve America’s employment problem.

• Continue health insurance reform, but ensure small businesses can more easily benefit from the intended advantages.

The Patient Protection and Affordable Care Act includes a number of elements designed to encourage small businesses to offer health insurance to their employees. However, notwithstanding the availability of tax credits for these businesses, only one-third of companies with less than 50 employees even considered whether they were eligible for these new tax credits, according to a 2011 Kaiser Family Foundation survey.

But why? The new rules haven’t been adequately explained to these business owners. Or, despite the intent, the rules exclude many of the companies the Act intended to help.

In addition, health insurance pricing continues to favor larger companies where risk can be spread across more people. We need to pool risk so small businesses can obtain affordable health insurance with acceptable benefits. Raising premiums and lowering benefits won’t work. Neither businesses nor their employees can afford it. We need to find a way to control the increasing costs.

• Revise rules and regulations to level the playing field.

Government regulation — while sometimes quite necessary — is disproportionately burdensome to small businesses, especially when it comes to licensing fees, permitting fees and the like. Both small and large businesses require the same time and resources to address these regulations, but the opportunity costs to small businesses are much greater when we consider their size. Therefore, regulations need to be streamlined and the process expedited.

Moreover, the very threat of additional regulation creates uncertainty for small businesses. Will a permit be too costly to obtain? How many inspections will be required? The unknown nature of impending regulation diminishes small businesses’ willingness to invest, to hire, and to grow.

• Provide hiring incentives for small businesses.

Given the fact that small businesses are so plentiful, incentives that specifically target small business hiring would serve to kick start overall job growth. Large companies have benefited from stimulus and incentives, but they have failed to put their profits into job creation here in the U.S. Sure, they’re hiring, but the job creation is outside our borders.

Many states dangle large amounts of money and tax breaks to have businesses move from one state to another. This tactic helps one area while hurting another, and states should better use these incentives to encourage existing businesses to hire and grow.

Look at economic policy enacted to repair the job market – the vast majority is really only relevant to big businesses. Perhaps that’s why large corporations are sitting on more cash now than at any time in recent history.

Help for small businesses doesn’t have to come in the form of stimulus, although meaningful tax credits would help. Why not more strenuously encourage lending from our recently fortified banking community? In this regard, banking regulators should stop penalizing community banks for lending to small businesses. Instead, why not expand the scope of the SBA to educate and advise businesses about their capital options? Easier access to credit for small businesses would bolster confidence and provide the necessary capital for these companies to expand their workforce.

• Recognize the growing impact of international economic turmoil.

Whether you’re selling hotel rooms or hair care, circumstances on the international stage may have an effect on your business. But, we are frequently far more focused on the weather. The fact is, our world is growing increasingly flat, and the uncertainties in Europe, Asia, and Latin America have immediate and physiological impact on all businesses, regardless of size.

• What small business owners can do.

Nice wish list, but how can we make these wishes a reality? Start with these simple tips:

Use HR consulting firms. Any additional expense can seem like a waste, but HR consulting firms not only carry the burden of your human resources tasks, but reduce your liability, streamline staffing, and most importantly, capitalize on regulations designed to help small businesses. If your company doesn’t qualify for these incentives, professional employment organizations can dramatically reduce the cost of providing benefits through outsourcing models.

Budget for regulatory compliance, and be prepared for regulatory delays.For the moment, bureaucracies are not going away — so accept the reality that compliance with various local, state, and federal regulations will require time and money — and plan for it.

Take advantage of the availability of capital. Money is available for all sorts of companies. As a small business owner, you may need to tap into the resources of investment banking firms to raise significant amounts of money. This may start by establishing a solid relationship with your current bank — and if you’re not getting the results you want, look for another bank. You can also seek the assistance of the Small Business Association.

Diversify your customer base. Whether your business is local or international, the global markets will affect your bottom line. Therefore, take advantage of new markets, seek variety among your customers and explore new revenue streams.

For this country to begin fixing the unemployment problem, we need to encourage, nurture, and support small business growth. We barely know the rules as they stand today, and the disagreements over future legislation and tax policy only amplifies this uncertainty. Lack of clarity and lack of compromise lead to lack of confidence — it’s time Washington got its act together and worked together to provide real solutions.

I’m looking at this issue from an investment banking perspective. What changes do you recommend to stimulate small business?

James Cassel is co-founder and chairman of Cassel Salpeter & Co. The investment banker’s specialties include mergers, acquisitions and divestitures; corporate finance; and public offerings. 

Read more here: http://www.miamiherald.com/2011/12/18/v-fullstory/2548374/a-wish-list-to-spur-growth-of.html#storylink=cpy

Buyout Firms Expand and Prosper in Florida’s Environment

By: James Cassel

To view original article click here.

MIAMI, Florida, November 20, 2011 – Leveraged buyout firms, private equity firms — call them what you want — these companies have dug their heels into the South Florida sand. Certainly, 2011 has seen volatile market swings, and the general state of the economy pretty much stinks. Nevertheless, South Florida has attracted a growing roster of private equity firms that have identified our turf as fertile ground for their operations, and that means more options for Florida-based companies contemplating a sale or recapitalization.

Buyout firms raise capital from deep-pocketed investors — or leverage their capital — using equity along with borrowings to purchase or invest in companies that have the potential for growth. In addition to these companies with growth potential, buyout firms are looking for undervalued or underperforming companies, businesses with strategic value to other companies in a firm’s portfolio, or companies in financial distress or bankruptcy. Many of these companies are capital constrained.

After a firm purchases a company, it may rely on existing management or regime change (new management) to grow the company and ultimately sell it for a profit, typically after a period of five to seven years. The profits get distributed back to the investors, and a portion, along with a management fee, goes to the private equity firm itself.

South Florida’s oldest private equity firm, Trivest Partners, has operated here since the 1980s and has handled high-profile transactions such as Aerobed, Banana Boat and Polk Audio. It also has the good company of other legacy firms based in South Florida including HIG Capital, Brockway Moran, Sun Capital, ComVest, Palm Beach Capital, Pine Tree Equity Partners and Boyne Capital Partners. Newcomers to South Florida include Empire and Huntsman Gay, to name a couple.

What brings private equity firms to South Florida? As simple as it may sound, many come here for the same reason as tourists and snowbirds — the lifestyle! Come January, it’s a heck of lot nicer to do a deal on the beach than on Wall Street. The strategic value of our location means private equity firms can attract sun-starved talent from the northeast as well as investors who enjoy a yearly meeting in the subtropics. Since most travel regularly, a good hub airport is a must.

There are solid financial reasons as well — the tax benefits. Florida’s low corporate income tax and absence of state individual income tax are notable draws. Plus, Florida has many entrepreneurs, a magnet for private equity firms operating in the state.

Perhaps most significant is that Florida — and South Florida in particular — has grown up. South Florida has a growing finance community. As the fourth-largest state in the nation, and with a more sophisticated international business community, private equity firms have come to recognize that South Florida is a viable alternative to New York, Boston and California.

Whether your business has revenue of a few million dollars or over a hundred million dollars, it’s good for you to have an army of eligible buyers right outside your door. Business owners no longer have to travel to New York to find someone high-profile to sell to or to recapitalize.

This applies to distressed companies as well. Sun Capital and HIG have been two of the most active buyers of distressed and healthy companies in North America and Europe over the last few years.

There are other firms with established specialties, such as MBF Healthcare Partners, which focuses on investments in healthcare, and Trivest, which specializes in family-owned businesses. Firms have honed their expertise to suit particular segments of the Florida business landscape.

Entrepreneurs can benefit from this enhanced investment activity. Venture capital is available to high-risk and early-stage companies.

During the first two quarters of 2011, businesses in Florida had more funding opportunities. We saw increased investments in small and mid-size businesses, increased inquiries from business owners seeking to acquire firms, and, best of all, increased buzz.

We anticipate merger and acquisition activity in 2012 to expand to a wider range of companies, with many deals involving private equity firms. Specifically, we will see more acquisitions in industries like technology, healthcare, distribution and manufacturing.

The growth of buyout firms in Florida spills over into lots of other industries, including sectors like my own, investment banking. We also see commercial lenders, the legal community, and the accounting industry benefiting from the increased deal activity these private equity firms generate.

If you’re a business owner, watch what’s happening here — what businesses are being bought and sold, who’s joining forces, and what new firms form. Private equity firms in Florida made national headlines and drove a lot of attention our way this year, and they are poised to continue to do so. Also, keep in mind middle-market firms, distressed companies, and family-owned businesses are the specialties of several Florida firms.

And if you are in the market to sell right now and want to get the best deal, try the direct approach by calling a firm directly or getting an introduction from a law firm. When trying to sell or raise capital, don’t forget that competition is good — it generally gets you better terms or a better price.

James Cassel, an investment banker and co-founder and chairman of Cassel Salpeter & Co., specializes in mergers, acquisitions and divestitures; corporate finance; and public offerings. His column runs monthly.

Is it the Right Time to Sell Your Business? James Cassel Gives Factors to Consider

Now may be as good a time as any to sell a company. But know what buyers want — and why you’re selling.

By: James Cassel

To view original article click here.

MIAMI, Florida, October 16, 2011 – With talk of a double-dip recession, continued high unemployment, and a schizophrenic stock market, business owners contemplating selling their businesses might think they would be better off closing the doors and throwing away the key. However, now is as good a time as any to take a serious look at selling your business. By waiting, you may not get a better price. Or worse, you may not be able to sell at all.

Right now, money is out there. Companies have squeezed more productivity from workers and refrained from hiring (unfortunately keeping job numbers dismal). In the process, they have accumulated lots of cash. As a result, many companies are sitting on capital, and they’re ready to invest in acquiring other businesses.

Debt is available for quality opportunities, too. Despite what the U.S. Congress and the White House have been saying, debt is not always a bad thing; and the Federal Reserve agrees. The Fed’s policies have dramatically increased the availability of money for banks to lend, at least through the middle of 2013. In addition, banks have spent the past two years cleaning up their balance sheets, and now they’re poised and ready to lend. That means buyers can obtain the financing to acquire your company.

What’s Hot

How can business owners know if their company will sell? Buyers are attracted to profitability, opportunities for growth, a diverse customer base, and the potential for a competitive advantage among others. In terms of specific industries, at the moment buyers are paying lots of attention to health care, manufacturing, social media and technology companies. However, any business that has successfully weathered the recession can be an attractive target to buyers. These companies have proven their stability.

Know your circumstances

Before a business hangs a “for sale” sign, though, owners should take a good look at their circumstances to clearly understand their reason for selling. That will help you and your advisors determine the best deal structure, identify the right buyer, and command the highest price.

Sometimes life circumstances beyond the business owner’s control force a sale. Illness and death are two common examples. Likewise, divorce can lead to a sale. (Just ask the owner of the L.A. Dodgers.) Often in these situations, selling is not “optional,” so you may have to make certain concessions on price and deal structure.

When divestiture is less urgent, there are more options to consider. For instance, when business owners want to cash out of their company — either to gain liquidity or to minimize risk — they may opt for a sale or partial sale.

Keep in mind, a partial sale brings outsiders into the business, and that comes with risk as well as strings. Owners may want a buyer with in-depth knowledge of their business, someone who can carry on the legacy of the company and grow the brand. Also, recognize that the new owners may change the status quo, especially as it relates to employees and customers.

Negotiating Price

Buyouts in the middle market typically don’t produce enough proceeds for the seller to replace the income generated by the business, unless it happens to be something like Facebook. If the business produces $1 million a year in cash flow, an owner would need to receive a net sale price of approximately $20 million to replace this annual profit (assuming your financial advisors can earn annual investment income of 5 percent). However, a business generating $1 million is rarely sold for such a large sum. Companies in today’s economic climate usually sell for four to eight times earnings.

If the seller of a business expects a higher price than the buyer is willing to pay, then an earn-out can provide additional funds if (and only if) the business achieves a certain level of earnings or revenues. The valuation gap between the seller and buyer can also be addressed if the seller retains a small stake in the business to generate future income — and maintain some control.

Owners can also negotiate an employment agreement where they stay around to lend expertise and experience to the new owners. Just be prepared to adjust to a different management style and no longer sit in the boss’ chair.

What Next?

If you decide a sale is right for you, you will need to have several documents readily available in preparation of the sale. Sellers will be asked to provide interested buyers with accurate financial reports in a timely manner — such as profit-and-loss statements as well as customer contracts, inventories information and lease agreements. Don’t even begin marketing your business until you can produce the necessary documentation.

Many owners have no idea what their business is worth, and finding the right price is essential. Unlike the sale of a home, the seller typically doesn’t have a true asking price, so hire financial advisors with specific experience in mergers and acquisitions. The right team can help market a company confidentially and structure a favorable deal that helps you achieve your goals.

Today is the debut of Minding Your Business/Inside the Deal from J ames Cassel, who is co-founder and chairman of Cassel Salpeter & Co. A veteran investment banker, Cassel’s specialties include mergers, acquisitions and divestitures; corporate finance; and public offerings. The column will appear once a month.

Read more: http://www.miamiherald.com/2011/10/16/v-fullstory/2455322/is-it-the-right-time-to-sell-your.html#ixzz1c740npOv

Florida M&A Deals Likely Flat in 2011

By Ina Paiva Cordle Icordle@MiamiHerald.com

To view original article click here.

Merger-and-acquisition activity in Florida may be flat this year, despite earlier expectations that it would exceed last year’s total.

A boost in Florida’s merger-and-acquisition market may not come this year, while financial institutions are eager to fund deals, local experts said Wednesday.

Across the state, mergers and acquisitions have slowed since the beginning of this year, and although the volume and dollar value of deals previouslywas expected to exceed last year’s totals, the outlook now is that it will likely be flat, said James Cassel, chairman and co-founder of the Miami-based investment banking firm Cassel Salpeter & Co.

Among the reasons: Business valuations are down, and owners are cautiously holding onto their companies unless they have a compelling need to sell, such as a divorce, losing a major customer or pressure from a bank.

“People are still nervous,’’ Cassel told attendees Wednesday morning during a CFO Alliance presentation at the Coral Gables Country Club. “People are feeling better than two or three years ago, but they are still concerned.’’

Yet, at least one company, Miami-based Trivest Partners, has multiple deals in the works. Those rank in the middle market — companies with minimum annual revenue of $20 million and minimum cash flow of $5 million.

Trivest, which currently owns 10 companies, typically holds its investments for an average of 5.5 years. It recently sold one business and is in varying stages of selling three others and buying two more, said Chip Vandenberg, a Trivest partner.

Trivest focuses on founder- and family-owned businesses that are in need of a transition.

“It’s pretty busy for us right now,’’ Vandenberg said after his presentation at the meeting of the CFO Alliance, a nationwide group of finance leaders that started its South Florida chapter two years ago.

Meanwhile, banks are aggressively looking to fund merger-and-acquisition activity, said J. Eric Hartman, Fort Lauderdale-based senior vice president and market executive of corporate banking at PNC.

“The pendulum has swung back,’’ Hartman said.

“Banks are eager to deploy capital to finance M and A activity,’’ he said. “However, for those firms with EBITDA [earnings before interest, taxes, depreciation and amortization] under $15 million, finding traditional bank financing can still be challenging.’’

The meeting was held in partnership with the University of Miami School of Business Administration. Among those in attendance were corporate chief financial officers, bankers, executives of private equity firms and academicians.

Read more: http://www.miamiherald.com/2011/07/01/2294373/florida-ma-deals-likely-flat-in.html#ixzz1S6vHMPJs

Veteran investment bankers carve out a niche in South Florida

Scott Salpeter and James Cassel’s new firm works in mergers and acquisitions, raising capital, restructuring, valuations and more.To view original article click here.

Premium content from South Florida Business Journal by Kevin Gale

Launching a new business is never easy, but the investment bankers at Cassel Salpeter & Co. don’t have all the obstacles they once faced.

When James Cassel and Scott E. Salpeterstarted Capital Link LC a dozen years ago, local businesses were reluctant to engage a South Florida-based investment banking firm, Salpeter said. A big New York name was more comfortable.

“Back in 1998, 1999, we had to get business outside of Florida to get business in Florida,” he said.

Now, they not only have their track record at Capital Link to rely on, but also a stint at billionaire Phillip Frost’s Ladenburg Thalmann Financial Services (AMEX: LTS) in Miami. Cassel was previously vice chairman and head of investment bank at Ladenburg, while Salpeter was a managing director. Frost acquired the 14-member Capital Link in what was valued as a $5 million deal after moving Ladenburg’s headquarters from New York to Miami.

Cassel Salpeter works in mergers and acquisitions, raising capital, restructuring, fairness opinions, valuations and financial advice, fulfilling a need that dates back to Capital Link’s 1998 founding.

The economic downturn threw a monkey wrench into the investment banking business.

“Unfortunately, things didn’t work out as we hoped,” Cassel said. “If we could have eliminated 2008 and 2009, it could have been a love fest forever.”

Still, their investment banking operation at Ladenburg ranked in the top 10 of middle market activity, Salpeter said.

Cassel decided to leave Ladenburg at the end of 2009, and Salpeter left in May 2010.

They’ve brought along some former co-workers: VP Marcus Wai, who was a VP at Ladenburg and Capital Link; Christopher Mansueto, a chartered financial analyst who was a senior valuation analyst at Ladenburg; and associate Lindsey Smith, who was an associate at Ladenburg.

Before becoming an investment banker, Cassel was managing partner in the Miami office of law firm Broad and Cassel, which was founded by Alvin Cassel – the cousin of James Cassel’s father, Marwin.

Martin Press, a shareholder at Gunster who was previously managing partner for Broad and Cassel in Fort Lauderdale, saidMarwin Cassel told him before he died: “Jimmy was selling things to other people in the sixth grade. He was an entrepreneur from the age of 11, and only got better over the years.”

Press called the duo inseparable, but eventually the younger Cassel went on to do what he always wanted to do by entering investment banking.

Asked to describe James Cassel, Press said: “He’s tenacious. He is the type of guy who won’t give up and he will do everything in his power to make a deal work.”

A financial industry consultant, who asked not to be named, said he thought Cassel’s background as an attorney was a confidence-boosting advantage in giving fairness opinions on potential deals.

Cassel said he has 15 years of experience as a corporate and securities lawyer, and is a member of the New York and Florida Bars, despite not having a current practice.

“I think having that experience is helpful in doing fairness opinions and restructurings,” which often happen in bankruptcy court, he said.

In one high-profile case, Cassel Salpeter has done work for the secured creditors of Gulfstream International Airlines. Cassel said Jan. 3 that he was trying to help facilitate a sale of the business.

CASSEL SALPETER & CO., LLC

Website: www.casselsalpeter.com
Chairman: James Cassel
President: Scott E. Salpeter
Address: 801 Brickell Ave., Suite 650, Miami 33131
E-mails: jcassel@cs-ib.com and ssalpeter@cs-ib.com
Phones: (305) 438-7701 and (305) 438-7702

Ladenburg Thalmann Investment Bankers Start New Firm

To view the original article, click here.

James S. Cassel and Scott E. Salpeter are leaving Ladenburg Thalmann to start up their own investment bank catering to private and publicly-traded middle market companies.

That new firm will be called Cassel Salpeter and it will be based in Miami. The two professionals have been with Ladenberg Thalmann for three years; they sold their advisory firm Capitalink to Ladenberg in 2007.

“We had a great run at Ladenburg, but leading a boutique investment banking firm is much closer to our roots and better allows us to provide independent, unbiased advisory services that leverage our knowledge, experience, and extensive contacts on behalf of our clients,” Cassel, chairman of the new venture, said in a press release.

Salpeter, the president of the new venture, adds that he and Cassel “have a huge network of professional advisors – lawyers, accountants, private equity firms, and fellow investment bankers – who have seen us in action and who respect the good work we do.”

In a telephone interview, Cassel said his new venture won’t be competing head-on with Ladenberg because its primary focus won’t be raising capital.  They will be advising mergers and acquisitions and offering fairness opinions as well as corporate restructuring.

Cassel said he has a good relationship with Ladenburg, which he said has “great potential.”

Just last week, Ladenburg reached an agreement to raise $14 million through a private placement with Taiwanese businessman Dr. Samuel Yin to finance its expansion in Asia.

“For me, it’s a cultural thing; I’m going back to my roots, I enjoyed building the firm and what I did with Capitalink for eight and a half years before we sold it,” said Cassel. He adds that at Ladenburg, “I was spending more time on management, and I missed and I will enjoy executing as we build Cassel here.”

Cassel Salpeter’s chairman said he doesn’t plans to grow his new firm to “anywhere near the size of Ladenburg,” and so should spend substantially less time on management and more on the “fun” things he enjoys.

Cassel, who left Ladenburg at the end of last year, said he doesn’t have a non-compete or non-solicitation agreement with the firm.

While Cassel Salpeter won’t be large, Cassel said it will have a national presence, much like Capitalink, which did some 80% of its business with companies outside of Florida.

Like Capitalink, the new company will work with a “broad brush” of industries, including restaurants, shipping, manufacturing, distribution and financial companies, but not real estate or oil, gas and minerals. And like its predecessor, the new company will also do some work with distressed companies, Cassel said.

In addition Cassel and Salpeter, two other Ladenburg alumni have joined the start-up: Marcus Wai as vice president and Chris Mansueto as an associate.