Patriot Transportation and United Petroleum Transports to Combine

Wednesday, 1 November  2023

Combined Company to Capitalize on Significant Growth in 5G,

Targeting Opportunities in mmWave and Multi-Edge Computing


Patriot Transportation Shareholders to Receive $16.26 per Share in Cash

JACKSONVILLE, FL / ACCESSWIRE / November 1, 2023 / Patriot Transportation Holding, Inc. (NASDAQ:PATI) (“Patriot” or the “Company”), today announced an agreement under which United Petroleum Transports, Inc. (“UPT”) will acquire all of the outstanding shares of Patriot common stock for $16.26 per share in cash. The transaction values Patriot Transportation at approximately $65.9 million, including assumed cash and debt.

The combination advances UPT’s and Patriot’s shared vision to become a top five bulk tank carrier by revenue with combined revenues in excess of $200 million and to become the premier tank truck company in the southern United States. Upon completion of the transaction, the combined company will have over 1,000 drivers servicing markets from Arizona to Florida covering 11 states with over 30 terminals. The companies have strong market brands and operate with a similar culture focused on safety and quality customer service. To capitalize on its strong brand and reputation, UPT will continue to operate Patriot’s business through Patriot’s subsidiary, Florida Rock & Tank Lines, Inc. (“Florida Rock”). UPT will utilize the combined company strength, the highquality employees and large regional and national customer base to strategically grow the business.

Florida Rock serves the southeastern United States as a premier bulk tank carrier specializing in hauling primarily petroleumrelated products and other liquid and dry bulk commodities. One of the largest regional tank truck carriers in North America, Florida Rock operates in Florida, Georgia, Alabama, and Tennessee with 17 terminals and six satellite locations.

“Patriot is the perfect match for UPT’s strategic intention to expand our network to the southeastern United States,” said Greg Price, Executive Chairman of UPT. We are pleased to welcome one of the leading bulk and tank trucking providers to UPT’s family. Together we will enhance our shared value proposition and invest in exciting growth opportunities providing transportation solutions for new and existing customers.”

Tom Baker, Patriot’s Chairman of the Board said, “We have operated this business for many years, and we appreciate that the quality of the
organization is being recognized by UPT. We appreciate the support of our shareholders and believe this transaction rewards them for their unwavering

“We are thrilled to partner with a company like UPT that appreciates Patriot’s proud history and is closely aligned with our mission and culture which is focused on safety, our customers and our employees. I believe the combined strength of the management teams will allow us to execute a strategic plan for growth beyond our current footprint. I appreciate UPT’s executive leadership recognizing our strong brand and quality employees and look forward to working side by side with their management team. I am also thankful to Patriot’s Board of Directors, shareholders and the Baker family for their support over the many years here at Patriot,” said Rob Sandlin, President and CEO of Patriot.

Transaction Details

The transaction, which has been unanimously approved by Patriot’s Board of Directors, is subject to the satisfaction of other customary closing conditions, including the approval of Patriot’s shareholders. Shareholders owning 26.6% of the voting power of Patriot’s common stock have agreed to vote in favor of the merger, subject to customary exceptions. Upon completion of the transaction, which the parties expect will occur by early 2024, Patriot will become a private company and delist from the NASDAQ Global Select Market. UPT has obtained a customary financing commitment from an established lending institution pursuant to which the lender will provide financing that, together with other available sources, is expected to be sufficient to fund the merger consideration and other obligations under the merger agreement.

The definitive merger agreement includes a 30day “goshop” period that will expire on December 1, 2023, which permits Patriot and its representatives to actively solicit and consider alternative acquisition proposals. There can be no assurance that this process will result in a superior proposal, and the Company does not intend to disclose developments with respect to the goshop process unless and until it determines such disclosure is appropriate or is otherwise required.


Cassel Salpeter & Co., LLC is serving as financial advisor and Foley & Lardner LLP is serving as legal counsel for Patriot.

Stephens Inc. is serving as financial advisor and Scudder Law Firm, P.C., L.L.O. is acting as legal counsel for UPT.

About Patriot Transportation Holding, Inc.

Patriot conducts business through its wholly owned subsidiary, Florida Rock. The Company transports petroleum and other liquids and dry bulk commodities. A large portion of the Company’s business consists of hauling liquid petroleum products (mostly gas and diesel fuel) from large scale fuel storage facilities to the customers’ retail outlets (e.g., convenience stores, truck stops and fuel depots) where it offloads the product into its customers’ fuel storage tanks for ultimate sale to the retail consumer. The Company also hauls dry bulk commodities such as cement, lime and various industrial powder products, water and liquid chemicals. The Company currently operates 19 terminals in addition to numerous truck domicile locations throughout the Southeast. With one of the most modern tank fleets available in the industry, the Company is composed of more than 300 tractors and 400 trailers.

About United Petroleum Transports, Inc.

Founded in 1966, United Petroleum Transports is the largest carrier of motor fuels, aviation fuels and chemicals in the Southwest, with Customer Service Centers in Alabama, Arizona, Georgia, Kansas, New Mexico, Oklahoma and Texas. Headquartered in Oklahoma City, UPT is a leader in the tank truck industry, with a professional driver base of more than 650 professional drivers who safely and dependably serve UPT customers across the USA and Canada.

Additional Information About the Merger and Where to Find It

This communication is being made in respect of the proposed merger involving Patriot and UPT. A meeting of the shareholders of Patriot will be announced to seek shareholder approval in connection with the proposed merger. Patriot will file with the Securities and Exchange Commission (“SEC”) a proxy statement and other relevant documents in connection with the proposed merger. The definitive proxy statement will be sent or given to the shareholders of Patriot and will contain important information about the proposed merger and related matters. INVESTORS AND SHAREHOLDERS OF PATRIOT TRANSPORTATION HOLDING, INC. SHOULD READ THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT MATERIALS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT PATRIOT TRANSPORTATION HOLDING, INC., UNITED PETROLEUM TRANSPORTS, INC., AND THE MERGER. Investors may obtain a free copy of these materials (when they are available) and other documents filed by Patriot with the SEC at the SEC’s website at, at Patriot’s website at or by sending a written request to the Patriot’s Secretary at 200 W. Forsyth Street, 7th Floor, Jacksonville, FL 32202.

Participants in the Solicitation

Patriot and its directors, executive officers and certain other members of management and employees may be deemed to be participants in soliciting proxies from its shareholders in connection with the merger. Information regarding the persons who may, under the rules of the SEC, be considered to be participants in the solicitation of Patriot’s shareholders in connection with the merger will be set forth in Patriot’s definitive proxy statement for its shareholder meeting. Additional information regarding these individuals and any direct or indirect interests they may have in the merger will be set forth in the definitive proxy statement when it is filed with the SEC in connection with the merger. Information relating to the foregoing can also be found in Patriot’s definitive proxy statement for its 2023 Annual Meeting of Shareholders (the “Annual Meeting Proxy Statement“), which was filed with the SEC on December 9, 2022. To the extent that holdings of Patriot’s securities have changed since the amounts set forth in the Annual Meeting Proxy Statement, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC.

Forward Looking Statements

This announcement contains “forwardlooking statements,” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, including statements relating to the completion of the merger.

These forwardlooking statements are generally denoted by the use of words such as “anticipate,” “believe,” “expect,” “intend,” “aim,” “target,” “plan,” “continue,” “estimate,” “project,” “may,” “will,” “should,” and similar expressions. However, the absence of these words or similar expressions does not mean that a statement is not forwardlooking. These statements reflect management’s current beliefs and are based on information currently available to management. Forwardlooking statements are based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to known and unknown risks and uncertainties and other factors that could cause actual results to differ materially from historical results or those anticipated. These factors include, but are not limited to: (a) the satisfaction of the conditions precedent to the consummation of the merger, including, without limitation, the timely receipt of shareholder approval; (b) uncertainties as to the timing of the merger and the possibility that the merger may not be completed, including uncertainties regarding UPT’s ability to finance the merger; (c) unanticipated difficulties or expenditures relating to the merger; (d) the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement, including, in circumstances which would require Patriot to pay a termination fee; (e) legal proceedings, judgments or settlements, including those that may be instituted against Patriot, Patriot’s Board of Directors, Patriot’s executive officers and others following the announcement of the merger; (f) disruptions of current plans and operations caused by the announcement and pendency of the merger; (g) risks related to disruption of management’s attention from Patriot’s ongoing business operations due to the merger; (h) potential difficulties in employee retention due to the announcement and pendency of the merger; (i) the response of customers, suppliers, drivers and regulators to the announcement and pendency of the merger; (j) disruptions in the execution of plans, strategies, goals and objectives of management for future operations caused by the merger; (k) changes in accounting standards or tax rates, laws or regulations; (l) economic, market, business or geopolitical conditions (including resulting from the COVID19 pandemic, inflation, the conflict in Ukraine and related sanctions, or the conflict in the Middle East) or competition, or changes in such conditions, negatively affecting Patriot’s business, operations and financial performance; (m) risks that the price of Patriot’s common stock may decline significantly if the merger is not completed; (n) the possibility that Patriot could, following the merger, engage in operational or other changes that could result in meaningful appreciation in its value; and (o) the possibility that Patriot could, at a later date, engage in unspecified transactions, including restructuring efforts, special dividends or the sale of some or all of Patriot’s assets to one or more as yet unknown purchasers, which could conceivably produce a higher aggregate value than that available to Patriot’s shareholders in the merger. Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will occur or if any occur, what effect they will have on Patriot’s results of operations or financial condition.

If the proposed merger is consummated, Patriot’s shareholders will cease to have any equity interest in Patriot and will have no right to participate in its earnings and future growth. Other factors that could impact Patriot’s forwardlooking statements are identified and described in more detail in Patriot’s Annual Report on Form 10K for the year ended September 30, 2022 as well as Patriot’s subsequent filings and quarterly reports and is available online at Readers are cautioned not to place undue reliance on Patriot’s projections and other forwardlooking statements, which speak only as of the date thereof. Except as required by applicable law, Patriot undertakes no obligation to update any forwardlooking statement, or to make any other forwardlooking statements, whether as a result of new information, future events or otherwise.

Matt McNulty
Chief Financial Officer

SOURCE: Patriot Transportation Holding, Inc.


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Dry Powder Reserves Point to Insatiable Buyout Demand

While uninvested assets in private markets have reached record levels, the capital is waiting to be deployed in a more favorable market.

By Britt Erica Tunick
Fall 2023

Following paltry M&A deal volume in 2022, deal activity declined even further in the first quarter of 2023 as companies held out for a more attractive deal environment with higher valuations. Meanwhile, the increasing cost of capital, combined with rising interest rates, macro uncertainty, the geopolitical environment and inflationary concerns, has made PE firms more cautious. As a result, the global private capital industry was sitting on $3.7 trillion of dry powder as of June 2023, $1.1 trillion of which is allocated for buyouts, according to Bain & Co.

“When you’re in an environment like this, there’s a lot of volatility and people aren’t sure what’s going to happen next. So, a lot of PE firms are sitting on their hands right now,” says Brian McGee, a managing partner at Boca Raton, Florida-based PE firm New Water Capital.

Behind the Curtain

The high levels of dry powder and declining deal volume don’t mean that the market is entirely at a standstill. Investors are very selective about doing deals. “The environment we are seeing is ‘barbelled.’ We see really highquality, class A deals getting done, and we see the lower end of the market where deals need a lot more TLC. What we are not seeing is the middle tier,” says Marc Chase, a partner and private equity leader at Baker Tilly. “The good businesses are nervous about the market and if they don’t see a favorable multiple environment for their company, their just going to wait it out.”

Chris Wright, managing director and head of private markets at Crescent Capital Group, notes there are still opportunities in add-ons, too. “You have a lot of small transactions where companies are buying other companies. These are add-on acquisitions and platform investments that are held by private equity, and not all of those are getting recorded on league tables,” he says. One problem Wright thinks is keeping M&A at bay is the valuation mismatch. “Equity markets continue to be elevated at the same time that cost of capital has gone up, yet sellers expect good prices while buyers want discounts,” he says.

LP Perception

Nonetheless, LPs are not putting pressure on PE firms to deploy capital. “Many LPs deployed significantly into private markets, and the distribution in their own portfolios has dried up, given that lack of exits. … If the capital calls aren’t coming, that’s actually convenient for some LPs,” says Jared Barlow, a partner at Greenwich, Connecticut-based Kline Hill Partners, which focuses on investments in the secondary market. The mindset of both GPs and LPs is that if there is no rush, deploy with prudence.”

And with expenditures and investments outpacing fundraising, industry professionals say that the amount of dry powder has already begun contracting. Added to that is the fact that fundraising in the current environment is extremely difficult for PE firms. Between the downturn in equity over the past couple of years, unweighted portfolios and a lack of returns from PE investments, there is a general dearth of liquidity within the LP community at the moment. In fact, as investors are repositioning their portfolios, there has been a wave of secondary trades among LPs.

James Cassel, CEO and co-founder of Miami-based investment banking firm Cassel Salpeter & Co., agrees that most investors would be content to give PE firms another year or two to recognize the value of their investments. But he believes there are likely to be many cases where the current market conditions make that difficult or impossible for PE firms. “A lot of PE firms that did deals a few years ago stress-tested their companies for interest rates going up a 100 or 200 basis points. But I’m not sure they stress-tested for a 500-point increase,” says Cassel. “The concern comes in if they still own the portfolio company and are gong to continue to own it, but the debt comes due and they’re going to have to refinance at a higher price.”

The Private Credit Opportunity

One area where the PE community is seeing a pop in activity is private credit. As small and midsize banks have backed away from lending following the recent bank collapses, industry experts predict that direct lending will continue to pick up speed. According to Moody’s, private lending to PE-owned middle-market companies is one of the quickest growing areas, with roughly $1.3 trillion in assets under management, $350 billion of which is dry powder. “We’ve seen a lot of demand growing for junior debt in both new investment, as well as support for existing investments,” says Crescent Capital Group’s Wright. “Part of that big opportunity is the highly leveraged transactions that were put together in 2021 and 2022 that now need some help – including through the issuance of preferred equity and partial PIK securities,” he says. Adds Baker Tilly’s Chase: “The current interest rate environment and the turmoil in the banking sector have created an opportunity for alternative debt funds, and I imagine that will continue for the remainder of this year.”

Despite the market calamity, several well-known private debt managers have recently raised large funds. They include HPS, which closed its Core Senior Lending Fund II in May; and Neuberger Berman, which collected $8.1 billion for its Private Debt Fund VI last September.

Looking Ahead

Many PE firms are bracing for an uptick of M&A activity in the third and fourth quarters of this year. Regardless of whether economic conditions improve, the expectation is that PE firms will have to finally start exiting some positions in the coming months. “Even setting aside the capital markets and the LBO and loan markets, the hold time on everyone’s portfolio companies is increasing to a point where there’s going to have to be some more selling happening,” says Jennifer Smith, a partner at Bain & Co.’s PE practice. In the meantime, she says that PE firms need to focus on where they can add value to their portfolio companies to make them more appealing when those exit opportunities finally do arise. “As dry powder comes down and deal markets pick up, you’re going to see a little bit more of a buyer’s market where it’s going to be more competitive,” says Smith.

“A lot of PE firms that did deals a few years ago stress-tested their companies for interest rates going up a 100 or 200 basis points. But I’m not sure they stress-tested for a 500-point increase.”
CEO and Co-founder, Cassel Salpeter & Co.

Anthony Arnold, a partner at Barnes & Thornburg, says there has recently been a noticeable jump in activity levels. “We are seeing the beginning of a shift from a wait-and-see approach to an actual deployment of capital,” he says. “In just the last two weeks, our middle-market clients issued as many letters of intent as they did from January to the end of May.”

As PE firms begin to pick the sectors and companies they believe will present the most promising exit opportunities, industry experts say firms should be aware there could be a bit of traffic when people finally do step off the sidelines.

“Now is the time that firms should be evaluating and creating their teams in anticipation of when the market is going to turn,” says Baker Tilly’s Chase.

BRITT ERICA TUNICK is an award-winning journalist with extensive experience writing about the financial industry and alternative investing.


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Dealflow Continues to Drop, But Some are Optimistic for a Bounceback This Fall

By Demitri Diakantonis
September 4,  2023

Middle market M&A continued to stall in August, as it has all year, according to data from Refinitiv. But experts say we may be hitting bottom and activity could pick up by the fourth quarter.

There were 42 middle-market deals worth about $14.2 billion in August. By comparison, there were 89 deals worth approximately $28.1 billion in August 2022. The Refinitiv data is based on North American deals valued between $100 million and $1 billion.

The technology and healthcare sectors continue to carry the load with 109 and 96 deals announced so far this year, respectively. Another sector that is picking up in deal activity is energy which has 50 deals announced so far this year. One notable energy deal in August was Earthstone Energy‘s $1 billion acquisition of Novo Oil & Gas Holdings.

While the dealmaking community has been crying in their beers for some time now, one banker sees a bright road ahead. “I believe that M&A will pick up for the last four months of the year as it has already started to,” says Cassel Salpeter & Co. Chairman and co-founder James Cassel. “With interest rates beginning to stabilize, and the sentiment that they are not going to go down quickly, companies that have been waiting to go to market are reconsidering their strategy and considering going to market presently and not waiting.”

With this new reality, Cassel says, high valuations will be reset, and private equity’s need to deploy capital will push deals forward.

In league table tallies, JP Morgan, Goldman Sachs and Bank of America hold the top three spots respectively in market share so far this year. Out of those three, Goldman has advised on the most deals with 28.

A notable performance in 2023 has been Evercore Partners which has jumped from 11th place last year to eighth place this year, while seeing its market share increase from 2.7 to 3.6 percent. The firm helped advise on Crestwood Equity Partners‘ $7.1 billion sale to Energy Transfer LP last month. With a stabilized economy, Cassel is optimistic. “There is still substantial money sitting on the sidelines, with strategic acquirers and PE firms looking to deploy capital and buy good companies,” he says.

See the full list of August’s biggest middle-market deals here.



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‘We Don’t Have Enough of an Infrastructure’: Psychiatric Hospitals Buckling Under Historic Pressure

By Chris Larson
July 5, 2023

Psychiatric hospitals are buckling under decades of financial pressure that increased following the onset of the pandemic.

Discriminatory regulations, challenging payer relations and inflation have placed several psychiatric hospitals in untenable positions. A spate of facility closures in 2023 demonstrates that the pressure is proving too much. Industry insiders say that systemic changes can’t come soon enough to protect these facilities and position them to meet ballooning patient demand.

“It’s been a host of issues that over time have really made providing this level of care one of the most challenging things I think I’ve done in my career,” said Stuart Archer, CEO of Oceans Healthcare.

Plano, Texas-based Oceans Healthcare is a behavioral care system that specializes in caring for seniors. It operates outpatient, day treatment and inpatient services at 48 locations in Louisiana, Mississippi, Oklahoma and Texas, according to its website.

Collectively, the psychiatric hospital segment is working well beyond its capacity. On average, U.S. mental health facilities have utilization rates of 144%, while combined substance use/mental health facilities have a 137% rate, according to the latest federal National Substance Use and Mental Health Services Survey (N-SUMHSS).

The same survey finds that substance use facilities collectively have a utilization rate of 96%.

Recently, Nashville, Tennessee-based HCA Healthcare Inc. (NYSE: HCA) shuttered an 18-bed psychiatric unit at Mission Oaks Hospital in Los Gatos, California. HCA Healthcare pointed to workforce challenges as the primary reason for the closure.

“Unfortunately, in the post-pandemic healthcare ecosystem, we can’t find qualified staffing for this unit,” an HCA Healthcare representative told The Mercury News.

HCA Healthcare has not responded to BHB’s request for comment.

That closure reduces the psychiatric bed count in Santa Clara County, California, by 8.5%, the report states.

HCA operates five psychiatric hospitals. As of the end of 2022, it had 44 psychiatric units in other facilities, according to public filings.

In Tukwila, Washington, Cascade Behavioral Health Hospital LLC told local officials it would shutter at the end of July, eliminating 288 jobs and 137
psychiatric beds.

“We were a solution to a community that needed access to acute behavioral healthcare,” Shaun Fenton, Cascade Behavioral Health Hospital CEO, told officials in a WARN notice. “Through COVID and other complexities, Cascade remained steadfast in our commitment to our patients and community. However, the breadth of challenges created a situation where the long-term viability of the hospital was no longer sustainable.”

Cascade Behavioral Health Hospital was owned and operated by Franklin, Tennessee-based behavioral health giant Acadia Healthcare Co. Inc. (Nasdaq: ACHC).

The relative impact of one factor or another depends on the community surrounding that hospital.

The burden of history and regulations

Psychiatric hospitals today are not what they used to be. Before the deinstitutionalization movement of the Kennedy era and beyond, there was relatively easy access to facilities that took a long-term, residential approach to treatment for severe mental illness (SMIs) or other acute behavioral health needs.

Cultural pressures to end the warehousing of people with disabilities and advancements in medical treatments inspired regulatory changes meant to bring treatment to outpatient clinics and other community settings. However, regulations didn’t go nearly far enough to replicate the access of the historic approach.

“The two challenges are that we swung really far in the way of avoiding longer-termed care facilities — which really do help people, but people don’t want to get to the point of needing them — and we don’t have enough of an infrastructure to support people not getting to that point,” Lindsay Oberleitner, a clinical psychologist and education director of SimplePractice, told BHB.

SimplePractice, part of EngageSmart, is a health and wellness platform for patients and providers.

Further, the financial pressures from uneven reimbursement and a lack of enforcement of federal reimbursement parity laws has made it difficult for providers to keep up with the high demands. Low payment reimbursements often lead to lower wages for staffers. And as the pressure increases for more services, so does the pressure to keep and retain staff. This is often an impossible effort as workers seek comparable or better wages in much less demanding work environments.

If a facility doesn’t have the staff to keep all of a psychiatric facility’s beds open, it’s not going to generate the income needed to go on, Oberleitner said.

“Through COVID and other complexities, Cascade remained steadfast in our commitment to our patients and community. However, the breadth of challenges created a situation where the long-term viability of the hospital was no longer sustainable.”

Shaun Fenton, CEO of Cascade Behavioral Health Hospital

Even if a health system is able to fully staff its psychiatric facility, behavioral health services are at higher risk of being cut at struggling hospitals compared to physical health services.

Behavioral health, on average, ranks 5.2 among the top 11 issues hospital executives face, according to survey data from the American College of Healthcare Executives. However, workforce issues were the No. 1 issue in the latest version of the survey.

For example, St. Dominic Hospital announced the closure of Jackson, Mississippi-based St. Dominic Behavioral Health Services. The move came “after a thorough assessment of our staffing and services and following losses of several million dollars in the last 3-5 years,” according to a statement from the system. St. Dominic Hospital is part of the Catholic health care system, Franciscan Missionaries of Our Lady Health System (FMOLHS).

The move impacts 157 employees, or 5.5% of St. Dominic’s workforce. The losses St. Dominic incurred didn’t necessarily come from the psychiatric unit. Rather, cumulative losses led to the closure, Meredith Bailess, senior director of marketing and communications for St. Dominic Hospital, told BHB.

St. Dominic Hospital has been in operation for the past 77 years.

Oberleitner said psychiatric hospitals also face the task of caring for even sicker patients today than in the past. Regulatory and payer trends have compressed the length of time a patient can remain in the hospital. This limits a facility’s ability to provide care and generate revenue. Further, the collective behavioral health system has not invested enough in outpatient or preventative health care efforts to lift the burden on psychiatric hospitals.

“You’re taking full responsibility for [the patient’s wellbeing] at a point of crisis and taking on risk,” Oberleitner said. “But many times reimbursement might not fully cover the costs that a hospital is needing to even maintain those beds.”

Still, there is a movement to address the shortage of psychiatric beds. Several operators point to increased demand and decades of prolonged pressures as
opportunities for expansion and investment.

In some ways, the historical challenges for psychiatric hospitals and their partners open the door to fundamentally changing dynamics through lobbying and other dealmaking.

Making deals for psychiatric hospitals

Since Medicaid and Medicare are leading payers — both in reimbursement and health plan policy — behavioral health organizations and their partners can lobby the public and elected officials for better rates and other policy changes.

While this isn’t easy, it’s often necessary. And the stakes at play with psychiatric hospitals can make reform a compelling case to argue.

“It’s very difficult for an individual hospital to be able to negotiate appropriate reimbursement rates from an insurance company or any payer,” James Cassel, chairman and co-founder of the investment bank Cassel Salpeter & Co., told BHB. “But it’s a significant national problem that requires the government’s and the appropriate agencies’ help to work through those problems. Because when a hospital closes and there’s no available care, the community suffers.”

At the federal level, many legal and regulatory frameworks popped up in the 1960s and exist today in similar forms to their original introductions. Some of the toughest regulations are the exclusion of institutions for mental disease from the Medicaid program (IMD exclusion) and the 190-day limit on psychiatric care for Medicare beneficiaries.

The federal government oversees and administers Medicaid in partnership with state governments, which covers disadvantaged populations. Medicare is the federal health plan for American elders and those with end-stage renal disease (ESRD).

The American Hospital Association (AHA) calls these and other behavioral health-related policies “arbitrary,” “discriminatory,” and “outdated”.

“This is one of the only levels of care where the federal government, in many ways, discriminates,” Archer said.

He also pointed to the meager increase that psychiatric hospitals will get from Medicare as part of the prospective payment rules. The Centers for Medicare & Medicaid Services announced a 1.9% net increase for inpatient psychiatric payments for the federal fiscal year 2024.

Many facilities have faced “10%, 15% cost increases by any measure” in recent years.

He also pushes for behavioral health providers to take a seat at the regulatory table.

[It’s] a significant national problem that requires the government’s and
the appropriate agencies’ help to work through those problems. Because
when a hospital closes and there’s no available care, the community

James Cassel, chairman and co-founder of Cassel Salpeter & Co.

In Louisiana, Oceans Healthcare found a legislator to sponsor and had a hand in passing a bill that allows patients to choose where they can go to get psychiatric facility services, barring hospitals and providers from dictating which facility patients go to for care. In Mississippi, Oceans Healthcare similarly advocated for and saw a bill that allowed IMD facilities to fully participate in the Medicaid program become law. Oceans Healthcare has also lobbied officials on issues in Texas.

“These are issues that many times we find elected officials care deeply about; they just haven’t had as much exposure to the issues at hand,” Archer said. “Nothing happens legislatively unless there’s a champion for an issue.”

Oceans Healthcare hopes to bring similar advocacy work done at the federal level by the industry trade group, the National Association for Behavioral Healthcare (NABH), to the state level. Archer holds an at-large seat on the organization’s board.

Short of changing regulations, health systems can do what they’ve done at other times to make psychiatric hospitals or units work, Cassel said. This can include merging with other systems or establishing partnerships with larger psychiatric facility operators, he added.

Oceans Healthcare’s growth includes establishing joint ventures with other health systems.

In November, Lafayette, Louisiana-based Ochsner Lafayette General and Oceans Healthcare announced a joint venture to build a $30 million behavioral health hospital. It is slated to open in late 2024, will be called Ochsner Behavioral Health Acadiana and will house 120 beds for adolescents, adults and geriatric patients.

“Many of these health systems have been in communities for generations. They’re the trusted brand in the area,” Archer said. “So we enter into the joint ventures with a tremendous amount of respect. Core to that partnership is a shared vision of the role that behavioral health plays in a community and a shared vision to improve it.”

Companies featured in this article:

Cascade Behavioral Health Hospital, Cassel Salpeter & Co., Franciscan Missionaries of Our Lady Health System, HCA Healthcare, Mission Oaks Hospital, Oceans Healthcare, SimplePractice, St. Dominic Hospital is part of the Catholic healthcare system

Chris Larson
Chris Larson is a reporter for Behavioral Health Business. He holds a bachelor’s degree in communications from Brigham Young University and has been covering the healthcare sector since December 2016. He is based in the Louisville metro area. When not at work, he enjoys spending time with his wife and two kids, cooking/baking, and reading sci-fi and fantasy novels.

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‘If There Is a Chilling Effect, It’ll Be Very Temporary’: What CARD’s Bankruptcy Means for the Autism Industry

By Chris Larson
June 21, 2023

The Center for Autism and Related Disorders’ (CARD) bankruptcy doesn’t foreshadow a new level of doom and gloom for the industry as a whole.

Although CARD is one of the largest companies operating in the space, it shouldn’t be used as a bellwether for autism therapy’s future outlook, several insiders told Behavioral Health Business.

“I’d say the CARD transaction is more indicative of where we are in the market than it is of where the market is going,” Robert Aprill, managing director at the M&A firm Physician Growth Partners, told BHB.

Headwinds common to autism therapy were the driving force behind CARD’s Chapter 11 bankruptcy, court documents state. But CARD is an isolated example of a behavioral health company needing a court-ordered restructuring due to “razor-thin liquidity.”

If anything, CARD filing for Chapter 11 solidifies several industry trends already underway. Stagnant fee-for-service reimbursement rates, along with rising inflation and interest rates, have strained the autism sector.

In turn, some operators have made painful business adjustments, including job cuts. Others that were once in hyper-growth mode and active on the M&A front pivoted to more slow-and-steady approaches to expansion and focusing on organic growth.

That has translated to deal volumes being down during 2023’s first quarter.

Kevin Taggart, managing partner and co-founder at M&A advisory firm Mertz Taggart, told BHB he expects this trend to continue in the second quarter, with transaction levels picking up next year.

“There’s always a market for good companies here and there,” he said.

Autism therapy demand outweighs challenges

As part of the CARD’s bankruptcy, majority shareholder Blackstone Inc. (NYSE: BX) agreed to sell its stake to Doreen Granpeesheh, the company’s founder and former CEO, for $25 million. Sangam Pant is also involved with the bid.

CARD was valued at $700 million in 2018 when Blackstone acquired a 70% stake in the company.

Despite the current headwinds that CARD and its peers are navigating, interest in meeting the staggering demand for autism services overrides concerns about the segment.

As many as 1 in 36 children in the U.S. have autism, up from the previous estimate of 1 in 44. In comparison, the estimated autism rate in the U.S. was one in 150 in 2000.

The growing rate of autism has also come with commensurate increases in expectations for people with autism to succeed in life. Understanding of the condition and related therapies has improved, with more accessibility as well.

All of this means continued, near-unrelenting demand for services, Matt Bogenschutz, associate professor at the School of Social Work at Virginia Commonwealth University, told BHB.

“If there is a chilling effect [to CARD], it’ll be very temporary, and hopefully then people will take a more sober view and realize that there is a great need in the space,” Bogenschutz said. “While I think the provision of any human service is never going to be a huge moneymaker, I do think there’s still space for investments.”

An isolated impact

CARD was among a cohort of autism therapy providers that took advantage of a frothy investment and M&A market. In hindsight, it did so at a time when investors and operators lacked the degree of savvy now recognized as needed when considering the proposition of growing and operating national autism therapy companies.

Critics of CARD, or of the involvement of private equity investment in the space more broadly, point to the influence of large investors as a negative. Some will possibly make the case that CARD’s fate is indicative of where other companies may be heading.

“I would respectfully disagree that this is the writing on the wall for anyone that’s sought out private equity backing,” Mike Moran, co-founder and executive advisor of M&A Healthcare Advisors, told BHB. “I don’t think this is a bigger indication of what’s to come at all.”

CARD is something of a one-of-one case, Moran said, noting that bankruptcy is indicative of what happens when any company runs into trouble with overhead and generating cash flow.

As of April 2023, the company’s annual earnings before interest, taxes, depreciation and amortization (EBITDA) were a $22 million loss. Its net loss totaled $82 million, while revenue totaled about $160 million for the same period, according to court documents.

James Cassel, chairman and co-founder of the investment bank Cassel Salpeter & Co., also doesn’t expect a wider negative impact from the CARD bankruptcy sale. It does reflect a change in the state of the market for buying and selling autism therapy companies, he told BHB.

“What this is doing is resetting values,” Cassel said, pointing to elevated multiples around the time CARD sold. “I don’t think the old valuations are going to stand. … The market’s just a little quieter.”

Data from M&A firm The Braff Group shows that multiples for autism therapy companies have compressed in recent years. Multiples ranged from 5.75 times earnings to 14 times earnings from the middle of 2016 to the middle of 2019.

Between 2020 and 2023, high-end multiples tumbled while low-end multiples only ticked down slightly compared to the previous period. Those multiples stand at 5 to 10 times earnings, according to The Braff Group.

Peaks, valleys and centers

The Blackstone investment in CARD generated a great deal of excitement. It also lent a significant amount of legitimacy to the autism therapy space, Adam Abramowitz, managing director and head of health care at M&A and strategic advisory firm Intrepid Investment Bankers, told BHB.

“From an investment standpoint, there are clearly some peaks and valleys,” Abramowitz said.

Echoing several other sources, Abramowitz expects investors to continue to strengthen their standards for what autism therapy companies will invest in. He called it a “heightening of discipline.”

CARD’s struggles have also opened up the conversation about what care setting is best for autism providers. Court documents point to the company’s leases for its treatment center as a major concern.

The industry has gravitated more towards center-based programs, Abramowitz said. There is a wide mix of home-based and center-based care in the autism therapy space.

The real estate needs for center-based care inherently added to an autism therapy provider’s overhead. While home-based care is less efficient, it has become more accepted in the market after COVID, at least temporarily, closed centers.

Debt and market concentration

Like many other businesses, CARD’s private equity backing came with a notable amount of debt. This likely became problematic since interest rates have skyrocketed since 2018.

The increased cost of debt slowed investment overall. Taggart suspects this also has the effect of inspiring greater scrutiny in dealmaking across behavioral health.

Over the last six months, he said, investors have lodged many more questions before submitting their offers.

“I don’t know if that’s being driven by lenders requiring more information, but that’s my suspicion,” Taggart said. “They’re asking a lot more questions than they used to, say, a year ago — or certainly more than five years ago.”

The CARD bankruptcy also demonstrates the inherent risk of leveraged buyouts like the one CARD underwent.

Court documents show CARD took on $235 million in debt on Nov. 21, 2018, as part of the deal with Blackstone. Its primary lender is New York-based Ares Capital Corp. That debt funded the company’s expansion and development of its own electronic health record (EHR) system.

About $159.5 million of that debt remains.

One investment banking executive who spoke with BHB on background pointed out that while other autism therapy providers grew quickly across the country, CARD had a larger and more diffuse footprint.

As of February 2022, CARD offered services at 221 locations in 24 states. According to court documents, it had about 100 clinics in 2018. Today it lists 130 locations.

Rates from state Medicaid and state-focused private health plans make up 90% of the company’s revenue, court documents show. Medicaid rates for autism services are low compared to other services. Also, rates for such therapies have remained flat on average in the U.S., acting effectively as cuts during inflation.

“I would assume that the average, blended rate per hour is substantially different [than other organizations],” the executive said. “CARD did not have as much cushion to absorb these impacts, maybe relative to other competitors that were more in lucrative markets or markets that have had higher reimbursements.”

Companies featured in this article:

Blackstone, Center for Autism and Related Disorders, Intrepid Investment Bankers, M&A Healthcare Advisors, Mertz Taggart, Physician Growth Partners, Virginia Commonwealth University


Chris Larson
Chris Larson is a reporter for Behavioral Health Business. He holds a bachelor’s degree in communications from Brigham Young University and has been covering the healthcare sector since December 2016. He is based in the Louisville metro area. When not at work, he enjoys spending time with his wife and two kids, cooking/baking and reading sci-fi and fantasy novels.


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Startup funding will be more competitive after Silicon Valley Bank collapse

By Ashley Portero

March 14, 2023

Raising money for a startup can be challenging in the best environment.

But founders should expect more competition than ever after the failure of Silicon Valley Bank.

The California bank was a major player in the technology and venture capital industry before it was seized by federal regulators last week. The bank’s failure — the second largest in U.S. history — reverberated across South Florida’s startup scene and sent founders scrambling to secure funds for payroll and other expenses.

Silicon Valley Bank, which opened a branch in the Brickell Financial District last year, worked with a number of local ventures, including medical tech firm Neocis and elder tech startup Papa. It also signed on as a partner of the eMerge Americas conference, a global technology conference taking place in Miami Beach next month.

It’s unclear if the bank failure will delay or impact the eMerge conference. A representative did not respond to a request for comment.

Miami-based Papa had minimal exposure to the bank collapse, a spokesperson told Miami Inno. A majority of the startup’s funds are held at another bank.

On Monday U.S. regulators said it would insure all of the deposits at the Silicon Valley Bank in a move to promote confidence in the nation’s banking system. Under the plan all depositors, even those whose holdings exceed the $250,000 insurance limit, can access their funds. The government stressed the deposits will not be covered by taxpayers, but will come from a $100 billion fund set up after the 2008 financial crisis.

Several startups affiliated with accelerator Endeavor Miami were depositors at Silicon Valley Bank, said Managing Director Claudia Duran. The news that deposits would be covered was a relief, but she is still advising founders to monitor their costs and prepare for a challenging funding environment.

“They should reach out to their current investors if they need funding or ensure that their financials are in order before pitching their business to potential investors,” Duran said.

Four of Fuel Venture Capital’s 33 portfolio companies had exposure to Silicon Valley Bank, said Managing Partner Maggie Vo. The Miami-based venture capital firm has been in communication with those businesses to come up with contingency plans, if needed. So far, none of the companies are at financial risk. However, the firm is advising those businesses to forecast their minimum cash requirements as a precaution.

Vo said being headquartered in Miami is a factor that reduced the firm’s exposure to the bank failure.

“Most founders in Miami have a relationship with SVB but it’s not the only bank that companies turn to,” she said. “You’ll find a little bit more diversity by nature because we’re here.”

Entrepreneurs should remember that investors are going to be hyper-focused on minimizing risk. Founders should be in frequent communication with their current investors and focus on highlighting the value proposition of their product to customers.

“This will test the founders and their ability to bounce back and be resilient during tough times,” Vo said. “This is a factor investors will look into before backing a company.”

James Cassel, chairman and co-founder of Miami-based investment banking firm Cassel Salpeter & Co., said it was too soon to know what the long-term impact could be for the region’s tech economy. As of now, it’s unclear how many local companies had relationships with Silicon Valley Bank.

“A large part of the fallout may be based on the psychological effect of the collapse,” he said. “Keep in mind that before the last few days, tech companies and biotech companies were already in a challenging environment to raise capital.”

At the end of the day, great companies will always stand out, said Florida Funders Partner Saxon Baum.

He expects other debt providers will eventually emerge to replace Silicon Valley Bank and become larger players in the state’s tech ecosystem. Fewer checks may be written, but the capital is still there to back innovative ventures.

“I think that the best founders and their companies will still be effective in raising money,” he said.

For more stories like this one, sign up for Miami Inno newsletters from the South Florida Business Journal and the American Inno network.


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Banks seek to reassure South Florida depositors their accounts are safe

By David Lyons

March 13, 2023

There’s no need for South Florida consumers to make a run on their local banks, even though the stock prices of financial institutions large and small took a pounding on Wall Street, industry executives and advisers said Monday.

Between federal insurance and the strength of the region’s financial institutions, bank customers can be confident that their money is safe after regulators took over two banks in California and New York during the weekend.

“The depositors have nothing to be concerned about because all of our banks in South Florida are very strong,” said Ken Thomas, a longtime analyst who is president of Community Development Fund Advisors in Miami.

“Any bank with an FDIC label is really safe,” Thomas said, referring to the industry-backed Federal Deposit Insurance Corp. fund that protects accounts up to $250,000.

[ RELATED: President Biden tells US to have confidence in banks after Silicon Valley Bank and Signature Bank collapse ]

That is, unless the person is a stockholder in the “banks that have taken hits.”

Those banks — Silicon Valley Bank of Santa Clara, California, and Silvergate Bank of New York — were designated as risks to the banking system by the federal government over the weekend, a move that empowered regulators to shore up uninsured deposits. Authorities also created a new path to funding for any bank in need of additional cash.

Nonetheless, bank executives were busy speaking to their customers on Monday to calm their nerves and reassure them that the Silicon Valley Bank and Silvergate Bank takeovers did not constitute a repeat of the financial collapse of 2008, when bad housing loans nearly tanked the entire economy.

“My sense is that a lot of bankers and executives are reaching out to their client base,” said attorney Greg Bader, who advises banks for the Gunster law firm in Fort Lauderdale.” The Florida Bankers Association is supporting its members. The association is coordinating efforts to provide outreach to depositors to give them information so they can see the state of the industry and reassure them about the government efforts that took place.”

“I’d have to say hats off to them,” he said of federal regulators. “They did a very good job of backstopping depositors here.”

But Bader cautioned there could be more failures of banks whose investment situations mirror those of Silicon Valley and Silvergate.

“I certainly don’t think the couple of banks that have failed so far are the last ones,” he said. “There will be definitely more, in my opinion.”

That’s due to the “dramatic rise in interest rates over a short period of time,” which forced the value of bonds purchased by the banks as investments to decline.

Letter of reassurance

Keith Costello, CEO and co-founder of Locality Bank in Fort Lauderdale, which became operational just last year, sent a letter to his customers and investors declaring their money is safe while the bank is in “excellent shape.”

“Fortunately, we are a new FDIC-insured bank, which puts us in a very strong position,” he wrote.

The executive explained that Silicon Valley Bank and Silvergate Bank “took significant losses in the securities they held on their balance sheet. When this was disclosed, and they announced that they needed to raise capital to make up for the losses, depositors panicked and withdrew funds rapidly.”

Costello said Locality’s position is on the opposite end of the spectrum.

“We have been operating in the new higher interest rate environment since we opened in January of last year,” he wrote. “We don’t have a portfolio of low-interest securities or loans. And we are extremely liquid, having only just started.”

[ RELATED: A major bank failed. Here’s why it’s not 2008 again ]

In a telephone interview, Costello said he had been up since 4 a.m. Monday speaking to customers.

“Thankfully the FDIC and the Treasury and Federal Reserve all announced a solution which is what we would expect them to do at a time like this, which is to guarantee that depositors are protected,” he said. “I put myself out there with all of our clients. That’s all people want to do is have a conversation with somebody.”

Keep your eggs in many baskets

Still, Costello is recommending that people should look to establish “multiple bank relationships” instead of keeping their money in one place.

“No matter how big a bank is [remember 2009], they are not immune,” he said in his letter. “The best defense is the old expression, ‘Don’t keep all your eggs in one basket’, especially with the price of eggs!”

John Heller, a Fort Lauderdale-based CPA and director at Marcum, the public accounting and business advisory firm, agreed that multiple individuals and business operators should do business with more than one bank, particularly given the $250,000 ceiling for FDIC-insured deposits.

“I don’t know what percentage of individuals have more than $250,000 in any one bank.” Heller said. “It’s really the businesses that need to be more concerned.”

If there is a run on a bank that’s holding an account owner’s last $10,000 or $1,000 and there’s no access, the depositor is stuck.

“If they need it tomorrow, that’s not helpful,” Heller said.

Consumers weren’t the only ones who were worried after the weekend of regulatory maneuvering in Washington.

[ RELATED: Will it take market crash for Congress to raise debt limit? ]

There is an unknown number of South Florida businesses that are customers of Silicon Valley Bank, which caters to technology company startups. The bank opened a branch on Brickell Avenue in Miami two years ago to take advantage of the city’s growing technology sector.

In a buoyant September 2021 news release, the bank announced its arrival with “a team of commercial bankers” to lend money to participants in “Florida’s dynamic innovation sector.”

The company said it was working with “several hundred Florida-based technology and life science companies and investors,” providing commercial banking, private banking and wealth management services “to technology and life sciences companies of all sizes and their investors.”

Regardless of what happens to the bank, Heller pointed out, borrowers will still have to repay what they owe.

“They should expect to keep repaying their loan,” he said. “They certainly owe the money and somebody is going to collect it. ”

Those who had business loan applications in progress will likely have to go somewhere else to borrow money.

“Every business should keep two or three banking relationships going for when they need to shop,” Heller said.

Commercial lending continues

Technology aside, the rest of the commercial lending business is doing well in South Florida, namely on the strength of continuing strong employment and the influx of new residents, said Jim Cassel, co-founder and chairman of Cassel Salpeter & Co. of Miami, an independent investment banking firm that helps middle market and emerging growth companies.

The firm announced Monday it helped Quick Shift Capital of Boca Raton obtain money for a financing business that caters to independent used car dealers and wholesalers. The money came from Synovus Bank of Georgia.

“The economy’s still doing very well, driven by the consumer and employment increases.” Cassel said. “The community banks are lending; they are just being a little more cautious.”

Yet, he said, there is a lot of existing commercial debt that will be coming due over the next couple of years, “that has to be financed at significantly higher [interest] rates.”

“If the cash flows have grown, the borrowers can support that,” he added. But he can’t believe that South Florida will be immune to a recession that many believe will be the result of an economic slowdown.

“Maybe Palm Beach and Fisher Island will be fine, and maybe off Las Olas [Boulevard] will be fine,” he said. ”Other places will have an effect. We’ve seen it before.”

Staff writer David Lyons can be reached at


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Deal Opportunities Still Exist in the Lower Middle-Market

By Demitri Diakantonis
March 3,  2023

With daily conversations going on about the lack of deals and a looming recession, how about some positive news? Deals, at least according to one middle-market investment banker, are still happening. But where and how?

“We’re dealing with the lower middle-market, sub-$100M deals,” says James Cassel, co-founder of Miami-based investment bank Cassel Salpeter & Co. “People are being opportunistic. On the buy-side, people are starting to pay lower multiples. We’re starting to see a reset in valuations, but it’s going to take time.”

Cassel Salpeter advises on a number of sectors including aerospace and defense, healthcare and technology.

We knew from the beginning that M&A was going to be a challenge this year. Some dealmakers are hopeful that the second half of the year will be better, but no one has a crystal ball of exactly when conditions will improve. Financing remains a problem with higher interest rates. Fundraising for private equity is sputtering.

On the other hand, environments like this tend to favor strategic buyers who can swoop in at lower prices. And the emergence of family offices – another group with a long-term view – can add to the excitement.

All-in-all though, Cassel sees more of a glass half-full given he works in the lower end of the middle market. “I don’t buy that the world is coming to an end,” he adds. “Deals are getting done, but they’re taking longer to close. People are being cautious. I would say more than half our deals are add-on acquisitions. PE has plenty of plenty of money. Corporates are in good shape from cleaning up their balance sheets.”

What’s your view on the road ahead in the lower middle-market? Will deals pick up or stay flat? Let me know your thoughts at – Demitri Diakantonis

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Whether Fired or Tired, Young Guns Are Leaving Silicon Valley

With the fear of recession in sight, investors are becoming more cautious and sharpening their demands on start-ups.

In her November 10, 2022 article for Le Monde Caroline Talbot writes a subscriber only article about the recent trend of company founders exiting their companies as they grow and go public.

Talbot interviews Cassel Salpeter Chairman and Cofounder James Cassel among other sources to examine why these unicorn company founders are leaving even as their companies take off.

Citing increasing economic pressures for Silicon Valley, Talbot notes that shareholders and company maturity can take their toll on company founders known for their outside-the-box thinking.

Talbot notes the changes at Twitter culminating in Elon Musk seizing the helm as well as the departures of Ben Silbermann at Pinterest, Emily Weiss at Glossier and Joe Gebbia at Airbnb.

While highlighting how recession worries have investors demanding more control while cutting into founder freedoms, she underscores how some founders are able to find that Goldilocks fit and remain with their companies.

Among other examples when founders remained with their company after being acquired, she cites the $90 million sale of EveryMundo, which helps airlines sell tickets in real time, to Pros.

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Joseph “Joey” Smith Of Cassel Salpeter & Co On The Future Of Aviation and Aviation Tech

An Interview with David Leichner
June 26, 2022

“Flying a plane yourself is not a must but would certainly be helpful. Go to airports, large and small and observe all the people/infrastructure that it takes to make this wonderful and so useful industry click and run and thrive.”

As part of our series about “The Future Of Aviation”, I had the pleasure of interviewing Joseph “Joey” Smith.

Joseph “Joey” Smith, director of aviation services at investment banking firm Cassel Salpeter & Co., has more than 25 years of experience in the capital markets and securities industry. At Cassel Salpeter, Smith leads the aviation team, providing the firm’s clients with his expertise in mergers and acquisitions, capital raising, and advisory services to middle market private and public companies. He has structured, negotiated, and executed on numerous aviation industry transactions with institutional private equity and strategic investors, and has worked extensively with business owners, management teams, and boards of directors and their professional advisors, locally and nationwide. Since 2018, Mr. Smith has led the publication of the firm’s quarterly Aviation Industry Deal Report offering insights on industry trends while charting deal flow.

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to get to know you a bit better. Can you tell us a story about what brought you to this specific career path?

My investment banking path was unexpected as I was a history major from a small liberal arts college and never aspired for a career in finance or Wall Street, but I loved the stock market, and the historical aspect of corporations. Their operations, growth, and finance were fascinating to me. When Merrill Lynch surprisingly hired me, I became very adept at bringing in clients and assets, achieved success, and became enamored with the industry and was all in thereafter.

Can you share the most interesting story that happened to you since you started your career?

I do not have a specific story that stands out as particularly interesting during my career, but rather have a period of time. That was when I was a broker/banker during the internet/technology dot-com boom, bubble, and ultimate bust times of the late 1990s and early 2000s. That was the most interesting chapter in my career. It was the Wild West of investing, with valuations being at astronomical levels for private placements, IPOs, buyouts, leading to huge failures and losses. That, combined with the excitement of technology truly advancing with the internet and new business models, while we were all trying to understand this new landscape and ecosystem and trying to pick the winners from the losers, made for fascinating times to be in the business.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

Early in my career, I was tasked to make sure a prospectus was printed for an IPO (before EDGAR online, etc.) so I was camped out late night/early morning in the office of the printing company (standard operating practice). Unfortunately, I fell asleep, and my printing cohorts decided to prank me, by locking me in the small conference room I was working from. When I awoke, I could not get out of the office, so I freaked out thinking the prospectus would be late to the SEC and my boss and client would fire me (no cell phones back then). I almost broke down the door before they let me out, and they took pictures of me, a disheveled mess running out with the huge prospectus box in tow. Very embarrassing, too, when they sent the blown-up picture to my boss to memorialize the prank, and thereafter hung it in the trading room for many years.

The lesson learned was that in business, do not ever let your guard down, and “coffee-up” for all-nighters. And, to always have a plan B for all unforeseen events, and backup, just in case “what if” happens. Be proactive and find a colleague to buddy up with to have your back and vice-versa!

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

My father, who taught me many lessons, always stressed that there is no substitute for hard work, to be a great listener, to always seek to do good (charity), and as for your adversaries, “to kill them with kindness.” He taught me that success is not defined by money, but by doing the right thing and being a well-respected and solid person to all who cross your path! His wisdom certainly defined my ultimate views on happiness, health and success. I am trying to always pass it forward to my three adult children.

You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?

Being: Creative & Humble Warrior

  • Being Creative — Finding interesting and creative “outside-of-the-box” ways to find and interact with prospects and clients. One example would be regarding prospecting. Referrals are always great and appreciated but going after the companies and businesses that I want to do business with has always been a top goal and priority of mine. As in farming, plant seeds for the long term.
  • Being Humble — remember where you came from in the early days and always treat people with respect at every level of an organization and transaction. Try to make a positive impact on people’s lives, wherever you may interact with them in business and outside of the office.
  • Being a Warrior — not by taking no prisoners and being ruthless, but by acting with an understanding of what you are fighting for, the value creation we can deliver, with an untiring warrior mentality and spirit to fight for your client, your firm/employer and certainly not last, for yourself.

Thank you for that. Let’s jump to the core of our discussion. Can you share with our readers about the innovations that you are bringing to the Aviation and Air Travel industries?

To me, the greatest innovation in our generation is the coming of age of the eVTOLs (electric vertical takeoff and landing aircraft) market and ecosystem. With billions of dollars and euros of venture capital invested and many highly visible names de-SPACing for additional capital and the prestige of being publicly traded, many companies are now publicizing their newest developments and technological achievements, as they test the sky and these are not merely ideas from the “Jetsons.” As we get closer to the commercialization of theses air taxis, we can now see the fruition of a new and exciting aviation subsector for short hauls and the last mile.

Which “pain point” are industry leaders trying to address by introducing these innovations?

There are numerous pain points, including: air worthiness, battery charge, FAA designation, flight paths, maintenance, pilot training, hubs to depart from and terminate to, affordable price points for the average commuter/traveler, etc.

How do you envision that this might disrupt the status quo?

Just like Uber, and Airbnb, the key players who have the size and scale to gain market share quickly will revolutionize how we travel. Disruptions may be felt all over the ancillary transportation industry such as buses, trains, cars, and even some of the short haul commercial carrier’s routes. Only time will tell how fast adoption and affordable pricing becomes mainstream.

My expertise is in product security, so I’m particularly interested in this question. Recently there were famous cases of hackers breaking into the software running automobiles, for ransomware or for other malicious purposes. Based on your experience, what should aviation companies do to uncover vulnerabilities in the development process to safeguard their vehicles and aircraft?

Security at all levels is paramount within the aviation industry, and software hackers will be one of the major concerns in the products and services that are so reliant on technology within the operating aviation footprint and related supply chain. These players must commit to an extraordinary spend to protect their planes and platforms, but the overall infrastructure of the hundreds of active FBOs must work with the FAA and Department of Homeland Security and other government entities to be able to thwart any malicious attacks and have Plan B and C contingency plans.

Fantastic. Here is the main question of our interview. What are your “5 Things You Need To Create A Highly Successful Career In The Aviation Industry?

My career is as an investment banker who has a specialty in aviation transactions. I believe you should always seek to educate, whether it be through advanced schooling or by finding CEOs/CFOs who will spend some time with you. Flying a plane yourself is not a must but would certainly be helpful. Go to airports, large and small and observe all the people/infrastructure that it takes to make this wonderful and so useful industry click and run and thrive. Find retired pilots to tell you their stories, whether they stem from times of war or peacetime. And finally, always be curious, as there are so many avenues from which to approach the industry: flying, repair, trading, operating various businesses, or being part of the millions who are employed by the major carriers and OEM manufacturers and their suppliers.

You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂

I have always believed in giving back, paying it forward (preferably anonymously) because it truly makes me feel good to give. Whatever success I have is because of so many others (known and unknown), and I am thankful for whatever I have, and feel obligated to do my best to give back.

I would love to find a way for the for-profit and nonprofit world to engage in a global transportation, humanitarian project to promote food and health care equity to the over a billion people globally living below the poverty line. If I am dreaming big without budgets or borders, this initiative would utilize all transportation modes: air, land, and sea with the best-in-class technology to promote the mandate. It would be a supply chain project to include the last mile of goods (to reduce corruption) for food and medical supplies, while also transporting those in need to the hospitals, schools, and training facilities in the developed world. The human interaction and cultural exchange component would lift us all, with ongoing engagement programs to keep the connectivity through many educational/outreach venues. The current system of providing the needy with food and health care services is not enough, it must be more thoughtful, organized, bilateral, and sustainable in order to train the next generation of providers from within these communities of need. Hey, I am thinking big and outside the proverbial box!

How can our readers further follow your work online?

See or subscribe (free) to our Quarterly Aviation Reports at our website:

This was very inspiring. Thank you so much for joining us!

About The Interviewer: David Leichner is a veteran of the Israeli high-tech industry with significant experience in the areas of cyber and security, enterprise software and communications. At Cybellum, a leading provider of Product Security Lifecycle Management, David is responsible for creating and executing the marketing strategy and managing the global marketing team that forms the foundation for Cybellum’s product and market penetration. Prior to Cybellum, David was CMO at SQream and VP Sales and Marketing at endpoint protection vendor, Cynet. David is a member of the Board of Trustees of the Jerusalem Technology College. He holds a BA in Information Systems Management and an MBA in International Business from the City University of New York.

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