Butler Snow Advisory’s Scott Stone was recently quoted in an Axial Forum article on the use of the discounted cash flow (DCF) method of company valuation.  The article, which highlighted the method’s down-trending favor among advisors and finance experts, can be read on the Axial website.

Stone is a Principal in BSA’s Birmingham office where he works with clients to evaluate the financial and operation interconnections that help ensure their firm’s profitability.

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Butler Snow is pleased to announce that Steve Groom – former chief legal officer of CoreCivic, formerly Corrections Corporation of America, and long time executive – has joined the firm’s Nashville office. He will serve in a dual capacity as a principal in the firm’s business advisory subsidiary, Butler Snow Advisory Services (BSA), and practice in the law firm, Butler Snow, in an of counsel role.

Steve Groom

Groom has extensive business, financial services and dispute resolution experience, and most recently was executive vice president, general counsel and secretary to CoreCivic, where he will continue to serve as special counsel.

“Steve is a successful executive, who has broad corporate and legal experience, and not only will he be an asset to the firm but will help spearhead Butler Snow Advisory’s efforts in Nashville,” said Donald Clark, Jr., chairman, Butler Snow. “Steve has played a significant role in the executive leadership team at CoreCivic, and we are thrilled to have his strategic counsel and legal experience available to our team and our clients.”

Throughout his career in the corporate world, Groom has gained experience and knowledge in the areas of corporate governance and strategy, risk management and compliance, banking and finance, leadership training and development, as well as a significant involvement in mediations and arbitrations. Groom is a Rule 31 listed general civil mediator.

“I am excited to join Butler Snow’s Nashville team and look forward to working with both the law firm and its business advisory subsidiary”, said Groom. “As a client of the firm for the past 15 years, I have the greatest respect for the firm’s competence and professionalism. The added benefit of having the opportunity to leverage both my legal and corporate advisory experience for the benefit of both entities’ clients makes Butler Snow a great fit for me.”

In addition to spending almost a decade in the private practice of law before joining CoreCivic, Groom served for 11 years in executive, senior management and general counsel roles with SunTrust Banks, Inc. He began his career as a banker with Memphis Bank and Trust Company.

Groom serves on the board of advisors of Lipscomb University’s Institute for Conflict Management and is an adjunct faculty member teaching mediation, negotiation and conflict resolution. He serves on the board of visitors of Lipscomb University’s College of Business and the board of directors of the American Cancer Society.

Groom is a member of the National Association of Corporate Directors, Society of Corporate Compliance & Ethics, Tennessee Association of Professional Mediators, International Institute for Conflict Prevention and Resolution, Association for Conflict Resolution, Risk Management Association, Tennessee Bankers Association, Bank Lawyer’s Committee, Tennessee Bar Association, Nashville Bar Association, Dispute Resolution Resource Center and the International Association of Privacy Professionals.

Groom received his undergraduate degree from Lipscomb University, where he ran track and cross-country as a scholarship athlete. He received his Juris Doctor from the University of Memphis Law School, where he was a member and author of the Law Review.

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MB Business Capital, a division of MB Financial Bank, N.A., announced it recently provided a new $15,500,000 senior credit facility to Texarkana, Arkansas based Tri-State Iron & Metal Co., Inc. (“Tri-State”), a client of Butler Snow Advisory Services, LLC (BSA). Tri-State is a third-generation, family-run business that has been in business since 1947. They are a metals recycler that recycles both ferrous and nonferrous materials, as well as a small amount of paper and plastic. MB’s credit facility will be used going forward to fund working capital needs and acquisitions.

“MB Business Capital understands and has extensive experience working with cyclical companies like Tri­ State. We creatively structure facilities that allow our borrowers to have full control over their availability requirements. We are very happy to welcome Tri-State Iron & Metal Co., Inc. to MB.” says Michael Sharkey, President of MB Business Capital.

“We have been in business for over 70 years and in that time we have had two banks. Now that we are with MB Business Capital we look forward to working together with them as our third banking relationship. Their desire to understand our business and growth plans are what helped us decide to make the change. Our family and team here at Tri-State look forward to a long lasting relationship built on trust and understanding of the dynamic environment we operate in.” says Howard Glick, CEO of Tri-State Iron & Metal Co., Inc.

BSA provided assistance on the new transaction. Butler Snow Advisory is a subsidiary of the law firn of Butler Snow LLP. With offices in Memphis and Nashville, Tennessee, Birmingham, Alabama and Jackson, Mississippi, BSA works with clients throughout the country as they address their most critical challenges and opportunities, helping to lead their businesses through periods of growth and transformation. Butler Snow Advisory specializes in providing executive-level strategic guidance to private, family owned and closely held companies

“MB Capital was a pleasure to work with throughout the process of establishing this new credit facility. Their team displayed a genuine desire to understand the metal recycling business and to architect a solution that was customized to our needs. The Tri-State team has delivered outstanding results in the face of market fluctuations, and this new facility will ensure that ample capital exists to support future growth. Butler Snow Advisory is pleased to have partnered with Tri-State and MB Business Capital to forge this new relationship.” said Scott Stone, Principal at Butler Snow Advisory.

About MB Business Capital
MB Business Capital is the asset based lending division of MB Financial Bank, a commercial bank headquartered in Chicago, Illinois. MB Business Capital seeks asset based lending opportunities in the $5 million to $50 million range and is offering dedicated syndication opportunities of up to $100 million. The firm can also provide access to the full range of business banking products and services offered by MB Financial.

 

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Butler Snow Advisory Services, LLC
(BSA), announced today the company’s continued expansion with the addition of Sam J. Jenkins, Managing Director, to its Memphis location and Blair R. Badham, Managing Director, to its Birmingham office.

“We’re excited about our continued growth in both Memphis and Birmingham and are pleased to add two accomplished professionals to our team,” said President and CEO Matt A. Thornton.  “Sam and Blair have extensive corporate and investment banking expertise, and they will be tremendous assets to our team and to the clients we serve.”

Sam Jenkins

Sam Jenkins

Jenkins has more than 35 years’ experience in corporate finance and investment banking, including a 28-year career with First Tennessee Bank.  As Executive Vice President of corporate banking, he led and managed the bank’s efforts to attract and maintain Middle and Corporate Market clients across the country, helping develop and implement marketing and business development strategies. Under Jenkin’s leadership, the Corporate Banking Group was ranked first company-wide for overall Contribution Income (NIBT), Contribution Income per FTE, Treasury Services Sales, Deposits Acquisition, Derivative and Loan and Ancillary Fee Production for 2005-2008.

Jenkins joins the BSA team from Capstone Financial Services, a Memphis-based corporate advisory firm he founded in 2009 to serve commercial and corporate clients, community and regional banks and private equity capital providers across the Southeast. He holds a B.A. from the University of Alabama, with a focus on finance and banking, and an M.B.A. from the University of Memphis, where he graduated first in his class.

Badham brings over a decade of experience in corporate finance, strategy and operations to the group.  Previously, he served as Director of Business Development for EBSCO Capital, the investment division of EBSCO Industries with $300 million in committed equity capital.  Headquartered in Birmingham, EBSCO Industries is a privately held conglomerate comprised of over 20 businesses and more than $2.5 billion in annual revenue.

Blair Badham

Blair Badham

During his time at EBSCO Capital, Badham established the firm’s business development function and was responsible for deal origination, investment opportunity analysis and the overall marketing strategy for the firm, an effort that led to the successful sourcing and closing of a number of new platform and add-on acquisitions.

Prior to his tenure at EBSCO Capital, Badham served in multiple capacities for Jemison Metals, a Birmingham-based steel service center, where he helped the firm grow by expanding its presence with Fortune 500 manufacturers.  Badham began his career in commercial banking, where he worked in the commercial and industrial lending group at First Commercial Bank for five years.

Badham earned a B.S. from the University of Alabama and an M.B.A., with honors, from Samford University’s Brock School of Business.

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Butler Snow Advisory Services (BSA) is pleased to announce that Michael E. Harris, a seasoned business executive, has joined as principal in its Memphis office. He brings more than 40 years of corporate leadership and business experience to the BSA team.

Harris most recently served as executive vice president and chief operating officer of Highwoods Properties, Inc. (NYSE: HIW), a publicly traded real estate investment trust (“REIT”), based in Raleigh, N.C., and a member of the S&P MidCap 400 Index. Harris retired from Highwoods on Aug. 31 after 19 years of service, and has recently relocated back to Memphis.

Mike Harris

Mike Harris

“Mike will bring broad and valuable experience to Butler Snow Advisory Services, and will spearhead our continued growth in the Memphis and Mid-South markets,” said Matt Thornton, president and chief executive officer of BSA. “Mike played a significant role in the highly regarded senior leadership team at Highwoods, and we are thrilled to provide his strategic and transactional expertise and knowledge to our team, and our clients.”

Throughout his career, Harris has been intricately involved in virtually all aspects of leading and managing the operations of a company – from the development, leasing, acquisition and management of commercial real estate to oversight of various corporate divisions, including regional operations, development services, asset management, corporate marketing and human resources.

Prior to joining Highwoods, Harris was executive vice president of Crocker Realty Trust before Highwoods’ acquisition of that company in September 1996. Before joining Crocker, Harris spent 15 years as senior vice president, general counsel and chief financial officer of Towermarc Corporation, a privately owned real estate development firm. Harris began his career serving seven years as a senior commercial lending officer at First National Bank-Little Rock and Union Planters National Bank-Memphis.

Harris earned a bachelor’s degree in international relations and affairs from the University of Mississippi, a Juris Doctor from the University of Arkansas School of Law and a master’s of business administration (finance) from the University of Memphis. He is a member of the Urban Land Institute, Lambda Alpha International Land Economic Society (past president – Memphis chapter) and a past member of the American and Arkansas Bar Associations. He has also served on the advisory board of directors of Wachovia Bank – Memphis and Allen & Hoshall, a design and engineering firm.

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On January 1, 2011 about 8,000 Baby Boomers (people born between 1946 – 1964) turned 65 years of age. Every day for the next 18 years, others will turn 65 at the same rate. While many may know about this trend, a lesser known fact is that, according to the US Census Bureau, 70% of all businesses (with more than 1 person on the payroll) or 4.2 million businesses are owned by people over 53 years old.

What are the prospects for transferring those businesses when the owner is ready? The need to liquidate ownership will impact all of us, young and old, as the boomers try to capture the wealth that they have created over their lifetime. But there is good reason to believe that there is going to be far less of it than they might expect. In fact, the elements of a perfect storm are brewing.

If every owner in the over 53 crowd is depending on selling their business to fund the next stage of their life (be it retirement or something else), the amount of capital required to close all those transactions is over $10 trillion dollars. Where is the money going to come from to fund those acquisitions?

There has been a stock market bubble, a housing bubble, a dot-com bubble, but never before have we seen an owner demographic bubble. This “age wave” is coming like a tsunami.

There is currently about $535 billion in funds available (“private equity overhang”) to acquire businesses — nowhere near the amount of equity needed to do even 10% of the transactions that will be up for sale. Even if fresh investment capital becomes available, the amount of supply will drive values down significantly.

There is a Market Transfer Cycle, and every 10years there has been some kind of recession. It is currently a seller’s market but the bull has had a long run and it will get tired sometime over the next three years. It always does. When it does, it will become a buyer’s market of major proportion and only the strongest deals will get transacted.

There are three major forces at work and together they are impacting the owner’s situation exponentially:

  • Many businesses for sale. In addition to those businesses owned by retiring baby boomers, there are over 7,700 companies in inventory that are currently owned by private equity firms that will become available. Furthermore, there are owners less than 65 years old who will be seeking capital for growth initiatives. There will be lots of competition for the retiring business owners and all of it will drive prices down.
  • There are not nearly enough funds to satisfy all the sellers looking to transact. Private equity fundraising won’t be able to keep up. Limited funding will make buyers very selective and only the A++ deals will get done and even they will have reduced purchase price multiples.
  • The economy goes in cycles and there is only about another three years left to the current seller’s market. Can an owner really afford to wait it out until the market cycles back? It may take significantly longer than any time in the past.

What’s the result? Only the best deals — maybe top 10% — will get transacted. If owners miss this current cycle they will have to wait at least eight years until the market starts to turn in favor of doing deals again, all the while, the boomers are flooding the market with their companies up for sale.

So, if you are a business owner, with thoughts of selling anytime in the next eight years, how do you achieve getting your company in a very competitive position for a transaction?

First: Establish a sense of urgency and a realistic view of the value of your business today. Look at it the way a buyer would. Remember the value for the buyer is based on what he can get out of it, not what you put into it.

Second: Get a road map developed now to increase value. This can be done without significant growth, dramatic improvement in earnings or even increasing your debt. Hitting the current seller’s market window means getting the business ready for a sale process in the next two years (it might take another year to find, negotiate, and close on an acceptable transaction).

Third: Create priorities for how you focus your efforts over the next 2-3 years. You’ve spent a lifetime working “in” the business, now it’s time to start working “on” the business. This isn’t like selling your house where you can get it market-ready in a month or so.

And finally: Get some help from an expert. The storm is coming and riding it out without eroding value will be extremely difficult. The issues here are vast and complex so find a professional who has a portfolio of clients that have done precisely this. You can’t go it alone and expect to be successful. You haven’t done it thus far and so you probably are ill-equipped to do it in the future. After all, you still have a business to run and other demands on your time. The ROI on this kind of help is significant but there aren’t that many qualified advisors available who can help you plan and execute a value enhancement process that will get you where you need to be -well within that top ten percent.

Boomers have been a driver of economic growth and consumer spending even before the early eighties (remember the hula hoop?) when they started to reach their peak earning years. This demographic group turbocharged rates of home ownership, consumer spending and, most important of all, employment. Almost everyone has either paid or benefited from the taxes they have generated. Will their business ownership legacy be another boon or a victim of a perfect storm?

This article was written by Gary Ampulski and was originally published on FORUM by Axial, April 8, 2015.  Gary is Managing Partner of Midwest Genesis and is not affiliated with Butler Snow Advisory Services, LLC.  

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Butler Snow Advisory Services, LLC (BSA), announced today its expansion into the Birmingham market, adding even more experience to the team with the addition of C. Scott Stone.

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Scott Stone

“We’re thrilled to have Scott join Butler Snow Advisory and lead our Birmingham office,” said President and CEO Matt A. Thornton. “His work with companies of all sizes, from Fortune 50 to startups, adds additional depth to our team and positions BSA to provide strategic guidance to companies in the growing Birmingham market.”

Stone has more than 20 years’ experience working with firms, both public and private, to evaluate the financial and operational interconnections that ensure profitability. His business advisory experience is vast, and he has served companies in CFO- and COO-in-Residence roles. He has evaluated technology solutions and utilization, developed management presentations to investors and financial institutions and advised executive teams and Boards of Directors on key business challenges and effective solutions for their firms.

Stone served in CFO and CAO roles for a $60M sector leading software provider, where he led a balance sheet restructuring that included multiple equity and debt capital transactions, as well as acquisitions and dispositions. He has served as COO of various companies, helping to grow client bases by a third and building multi-million-dollar sales pipelines. Stone also has extensive experience in the development and implementation of financial and operational planning and budgeting processes for companies.

As Marketing Director and Director of Finance & Business Operations for a Fortune 50 company, Stone led financial and operational functions for a two-state area that delivered more than $650M in annual revenues. Before joining BSA, he founded and served as Managing Partner of Sightline Resources, a financial and management consulting company.

Stone has a Masters of Professional Accountancy and a Bachelor of Science in Accounting from the University of Southern Mississippi. He is also a Certified Public Accountant and a Certified Information Technology Professional.

The Birmingham opening marks the company’s fourth location since its start in January 2011, with additional offices in Jackson, Miss., and Memphis and Nashville, Tenn.

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RIDGELAND, Miss., – Zenith Education Group, a newly created nonprofit provider of career school training, announced Tuesday that Troy A. Stovall, a former Butler Snow Advisory (BSA) Principal, would serve as the organization’s interim president.

Stovall joined the BSA team in September 2013 and advised clients nationwide as part of the firm’s service offerings.

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Troy A. Stovall

Before joining BSA, Stovall founded and served as managing member of LeMaile Stovall LLC, a management consulting firm serving for-profit and nonprofit firms focused on strategy, operational performance and fundraising.  He also previously served as executive vice president and chief operating officer of Howard University and as senior vice president and chief financial officer of Jackson State University (JSU). In both roles, he led various construction, renovation, educational and information technology projects including: a redesign of benefits at Howard University that resulted in a $9 million savings, the launch of Howard’s online executive MBA program, and more than $300 million in new construction and renovation projects at JSU.

Read the Zenith press release or visit www.zenith.org for more information.

Butler Snow Advisory is a subsidiary of the law firm of Butler Snow LLP. With offices in Memphis and Nashville, Tenn. and Jackson, Miss., BSA works with clients throughout the country as they address their most critical challenges and opportunities, helping to lead their businesses through periods of growth and transformation. For more information, see the About Us section.

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Suzanne Cockroft

Butler Snow Advisory Services, LLC (BSA) is pleased to announce the addition of Suzanne McKay Cockroft as director in the firm’s Ridgeland office. She brings more than 14 years of experience in communications, business development, marketing and brand management.

“Suzanne’s addition to the team further expands the range of services BSA can provide to clients,” said Matt Thornton, BSAS president and chief executive officer. “Her expertise will be a tremendous asset, both internally and externally, as the team continues to grow.”

Cockroft most recently served Butler Snow LLP, the parent company of BSA, in roles as diverse as digital creative and website development, project management, public relations and internal communications, business development and proposal and pricing strategies.

Throughout her career, Cockroft has developed and executed comprehensive marketing plans, including strategies related to digital, social and traditional media outlets. She has advised businesses in various stages from start-ups and early-stage companies on product and service launches to mature firms on market entry and penetration strategies.

Cockroft is a cum laude graduate of The University of Mississippi where she earned a bachelor’s degree in journalism with an emphasis in public relations. In 2012, she completed studies for a MBA and was graduated, magna cum laude, from Mississippi State University.

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Butler Snow Advisory Services (BSA) is pleased to announce that Rick Gernert has joined as principal in their Nashville office. He brings more than 30
years of experience in the financial services industry.

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Rick Gernert

“Rick will bring a wealth of experience to Butler Snow Advisory,” said Matt Thornton, President and CEO of BSA. “We are thrilled about the knowledge and value he
will provide to our team and our clients.”

Gernert most recently served as a founding shareholder of Iroquois Capital Group and managing director in its Investment Banking Group, as well as president of Iroquois Capital Advisors. Gernert has experience working with early-stage venture capital entities and has been an advisor to institutional investors and high net worth individuals.
Prior to his work at Iroquois Capital Group, Gernert was a managing director of Koch Ventures, a $150 million early-stage venture capital entity. He has also held the position of vice president of business development at EDS Corporation in Dallas, where he was responsible for internal mergers and acquisitions and its private equity investing.

Gernert holds a bachelor’s degree in accounting from the University of Mississippi as well as Series 7, Series 24, Series 63 and Series 79 licenses.

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