20110124-NEWS--19-NAT-CCI-CL -- 1/21/2011 1:39 PM Page 1 · Association for Corporate Growth (ACG). “It’s nowhere near 2007 levels, of course, but 2010 was better and we are very

20110124-NEWS--19-NAT-CCI-CL_-- 1/21/2011 1:39 PM Page 1

Crain’s Cleveland Business Custom Publishing

CORPORATE GROWTH and M&A S-2 January 24-30, 2011 Advertisement

Delivering Solutions

to the Global Middle Market MICHAEL E. GIBBONS

Senior Managing Director & [email protected]

SCOTT T. BERLINManaging Director

& [email protected]

ANDREW K. PETRYKManaging Director

& [email protected]

EFFRAM E. KAPLANDirector & [email protected]

KEVIN H. SARGENTDirector & [email protected]

Serving the global middle market for over 20 years, Brown Gibbons Lang & Company offers a broad range of financial advisory services including:

M&A Advisory Restructuring Capital Raising Fairness Opinions

As a leading independent investment bank advising middle market companies in the U.S. and internationally, BGL provides strong negotiating skills, specialized industry experience and a shared entrepreneurial spirit that can help you increase and preserve your company’s value throughout the transaction process.

216.241.2800 or visit www.bglco.comTransactions involving securities are completed through Brown, Gibbons, Lang & Company, Securities, Inc., an affiliate of Brown Gibbons Lang & Company LLC and member FINRA.

We could tell you about our years of experience, our impressiveteam of attorneys, our focus on client service.

But perhaps you’d rather hear it from someone else:

• Best Lawyers® ranked Benesch first in Corporate Law in Cleveland for the past two years.

• Best Lawyers® named Benesch attorneys CorporateLawyers of the Year in Cleveland for the past two years:IRA KAPLAN in 2010 and GEORGE ARONOFF in 2011.

• Chambers USA 2010 cites clients who say “[BeneschCorporate & Securities] lawyers really learn our businessand understand our motives.”

We’ve earned their respect. We’re ready to earn yours too.

Why trust Beneschfor your corporate legal needs?

Cleveland

Columbus

Indianapolis

Philadelphia

Shanghai

White Plains

Wilmington

www.beneschlaw.com MY BENESCH MY TEAMBest Lawyers compiles its lists by conducting peer-review surveys. Chambers selects its sources on the basis of submissions

put forward by law firms, interviews during the course of research and its own database resources.

LETTER FROM THE PRESIDENT

ACG Cleveland: Education, networking for dealmakers By THEODORE A. WAGNER

“It was the best of times,it was the worst oftimes …” The currenteconomic environment

feels a little like a Dickens novel.We face an exhausting list ofchallenges that includes high levels of unemployment, massivegovernment deficits, soaringhealth care costs and lingeringreal estate troubles, just to namea few.

But as businesses and employees

adjust to this “new normal,” there are somerays of hope on the horizon in NortheastOhio.

In addition to themuch-publicized storiesof the new medical mart,convention center andcasino development,transaction activity conducted by the area’sprivate equity and professionalservice firms picked up in 2010.As elegantly showcased in the

October issue of The Deal Magazine, thesebusinesses are unique assets of the region andvaluable resources to betapped to drive economicgrowth.

With more than13,000 members world-wide, the Association forCorporate Growth (ACG)is the pre-eminent orga-

nization where mergers-and-acquisition professionals whowork in public and private

companies, private equity, corpo-rate and investment banking, finance, accounting, law, and related service fields come together.ACG Cleveland is one of thelargest and most vibrant chaptersin ACG, and 2010 was a busy yearfor our chapter.

In addition to strong atten-dance at our regular programs, theDeal Maker Awards event wasagain sold out in January, and thesecond annual Great Lakes CapitalConnection held in September attracted more than 650 M&Aprofessionals from across thecountry.

We also joined 22 other ACGchapters in playing host to anMBA case study competition involving more than 100 top MBA programs.

The winners of Cleveland’scompetition received scholarshipsto attend ACG’s national confer-ence in Miami. This was a tremen-dous learning opportunity forthese students and a strong recruiting tool for the region.

Members join ACG Clevelandfor two primary reasons:

1To attend educationalevents that help them buildvalue in their companies

and for their clients;

2For the opportunity to network with a diverse andinfluential community of

business people. Chapter member-ship includes access to the fullsuite of ACG Global benefits andservices.

If this sounds like an organiza-tion for you, we encourage you to attend one of our events or toapply for membership.

Visit www.acg cleveland.orgor call me at 216-373-2500, andI’ll be happy to talk with you.

Theodore A. WagnerPresident, ACG ClevelandShareholderLibman, Goldstine, Kopperman & Wolf

2011 ACG Cleveland

eventsAll events at The Union Club

unless otherwise noted

FEBRUARY 8DinnerRichard Smucker, president &Co-CEO, J.M. Smucker Co.

FEBRUARY 17BreakfastDan Hurwitz, president & CEODevelopers Diversified RealtyEvent is at DDR

MARCH 17Breakfast Awaiting confirmation

APRIL 14Breakfast Awaiting confirmation

MAY 5Afternoon Panel DiscussionTopic to be announcedThe Ritz-Carlton, Cleveland

MAY 19Breakfast James F. Kirsch, chairman,president & CEO, Ferro Corp.

JUNE 14Evening Social & NetworkingThe Shoreby Club

SEPTEMBER 12-13Great Lakes ACG CapitalConnectionJW Marriott – Indianapolis

SEPTEMBER 266th Annual Golf OutingFirestone Country Club

JANUARY 26, 2012Deal Maker Awards DinnerMarriott at Key Center

For more information contact ACGCleveland at 216-696-8484 or www.acg.org/cleveland

THEODOREWAGNERAACCGG PPRREESSIIDDEENNTT

20110124-NEWS--20-NAT-CCI-CL_-- 1/19/2011 10:20 AM Page 1


CORPORATE GROWTH and M&A Advertisement January 24-30, 2011 S-3

We are proud to have participated in decades of deal-making withthese well-deserving winners, including Mal Mixon’s original buyoutof Invacare and the incredible 2010 transaction by Fairmount Minerals. We salute these entrepreneurs.

Calfee, Halter & Griswold LLP | Calfee.com1400 KeyBank Center, 800 Superior Avenue, Cleveland, Ohio 441141100 Fifth Third Center, 21 East State Street, Columbus, Ohio 43215

We also congratulate our other client winners Fairmount Minerals, Ltd.

Shearer’s Foods, Inc.and all the other 2011 Deal Maker Award Winners

Calfee is proud to join ACGin recognizing our

long-standing client,

Mal Mixonfor all he has accomplishedfor Invacare and Cleveland

Mergers & Acquisitions• For healthy, good performing companies• Sell side and buy side advisory• Private placement of debt and equity, including bank loans,subordinated debt, and various forms of equity

Restructuring• Distressed M&A; Sec. 363, Article 9, Receivership• Financial restructurings• Private placement of debt and equity, including DIP and other financings

Corporate Finance• Valuations• Fairness opinions• Joint venture and alliance formation• Board advisory services

Wall SStreet EExecution ffor MMain SStreet BBusinesses

Cleveland10 ½ East Washington Street

Chagrin Falls, Ohio 44022440.247.2800

New York477 Madison Ave, Suite 1220

New York, NY 10022212.546.6822

www.candlewoodpartners.com

Hot in Cleveland

Shaking off the doldrumsof the past two years, pri-vate equity nationally ispoised to shine in 2011,and Cleveland will be no

exception. Citing a pickup in activity

toward the end of 2010, a contin-ued economic turnaround andavailability of capital, dealmakersare forecasting a robust year forM&A opportunities — particularlyin the middle market.

“Across the country, there is a lotof positive buzz that deals arestarting to flow again,” says GregFine, vice president of marketingand communications for the Association for Corporate Growth(ACG). “It’s nowhere near 2007

levels, of course, but 2010 wasbetter and we are very optimisticabout 2011.”

The second annual Great LakesCapital Connection, hosted byACG Cleveland in September,proved a harbinger of the turn-around. More than 650 attendees(two-thirds from outside the area)converged to exchange ideas, network and stimulate the flowfor potential deals.

Northeast Ohio is home to asubstantial number of private equity firms and a disproportion-ately strong deal community — alegacy of its history.

“Northeast Ohio has a strong,well-developed private equity

Region’s middle-market private equity activity gathers steam

By CHERYL HIGLEY

See OUTLOOK Page S-10

Attendees gathered in September to network and exchange ideas during the opening receptionof the second annual Great Lakes Capital Connection, hosted by ACG Cleveland. The eventwas held at the Rock and Roll Hall of Fame and Museum.

Nominate your favorite Deal Maker Nominations for the 2012 ACG

Cleveland Deal Maker Awards may besubmitted at any time during the year. The deadline is November 1, 2011. For a nomination form, contact ACGCleveland at (216) 696-8484 or [email protected].




What dealmakers can expect from lenders in 2010 and beyond.

The tumult in the banking industry has changed the face of private equity deal-making. Lenders will be performing more due diligence than ever before, and firms that are well-positioned stand to benefit the most. In addition, an increasing number of distressed deals are expected to come down the pike, creating opportunities to buy debt that can be converted into equity when the company is restructured.

Grant Thornton offers you a broad perspective for private equity firms with an enlightening new whitepaper, The debt effect, which explores the current environment of private equity dealmaking, including dealmaker expectations from lenders in 2010 and beyond. To get a copy, contact Tom Freeman, Partner, Tax and Transaction Advisory Services, at 216.858.3700 ([email protected]) or visit GrantThornton.com/PEWhitepapers.

Find out how it feels to work with people who love what they do!

Grant Thornton refers to Grant Thornton LLP, the U.S. member firm of Grant Thornton International Ltd, an organization of independently owned and managed accounting and consulting firms.

Chikol is a leading middle market consulting firm to companies facing critical organizational, financial and operational challenges . Our teams ofprofessionals provide consulting services in all financial & operational areas and can assist in the changes needed to preserve and enhance enterprise value. In these critical times , there is no substitute for detailedanalysis providing a roadmap for immediate action and an experiencedteam in support that has been there before.

www.chikol.com

Companies find pride in “Made in Ohio”Expanding markets, strong employeeshelp businesses thrive in down economy

By CHERYL HIGLEY

Northeast Ohio has takenits share of hits duringthe recent economicdownturn. But Ohio-

proud middle-market companiesfrom the Amish countryside toYoungstown and Mentor are farfrom down and out. They arethriving, thanks not only to thehigh-quality, innovative productsthey deliver, but also to their em-ployees, whose vision, pride in work-manship and relationship buildingare making all the difference.

Turning TechnologiesAs the world’s largest manufac-

turer of audience response systemtechnology (think “ask the audi-ence” on Who Wants to be a Millionaire), Youngstown-based Turning Technologies constantly has to be in tune withtechnological advances in its industry.

Yet, CEO Michael Broderick says,it’s the people — not the product— who define the nine-year-oldcompany’s success. Turning Tech-nologies, which was acquired in2010 by Brockway Moran & Part-ners, Inc., a Florida-based privateequity firm, in partnership withthe company’s management, saysTurning Technologies is Ohio.

“We are a technology companywith teams of engineers, developersand specialists who live in andare committed to Northeast Ohio.We wouldn’t be the same companywithout them,” Broderick says.“This company’s intellectual talent is its greatest asset.”

That talent faced its biggest testduring the fourth quarter of2008, when Turning Technolo-gies — which quadrupled its revenue from 2005-2010 — expe-rienced its only year-over-yearsales decrease in its history.

Broderick says Turning Tech-nologies learned to better com-municate its value proposition to

its markets (primarily education,but also businesses and govern-ment agencies worldwide) and toexpand its customer base. The

result was 20% growth in 2010. “Kids today expect to be

engaged in ways that traditional education hadn’t done, and itseems schools are finally gettingpast implementing ‘technologyfor technology’s sake’ and lookingat technology that can make adifference,” Broderick says.

Libra IndustriesBuilding strong customer

relationships is key for Mentor’sLibra Industries, which is cele-brating its 30th year in business.Those relationships, says Presi-dent and CEO Rod Howell, were instrumental in helping thecompany weather the recessionfallout.

“As an electronic manufacturingservice, we own no intellectualproperty — our customers own it.Our success comes from our ability to work with our cus-tomers, to listen and to under-stand their needs and chal-lenges,” Howell explains.“Everyone looks at our manufac-turing technology because it’scool and fascinating. But it is ourpeople who are the core of whoand what we are. Our most suc-cessful relationships are forgedwhen clients view us not just as amanufacturer, but as an exten-sion of their business.”

That’s not to say the technologyisn’t important, of course. Rela-

tionships will only get you so far,Howell says, which is why LibraIndustries continually reinvestsmillions in state-of-the-art robotics, software and IT systems.

“Everything is centered aroundbecoming more lean,” he says.“The only way we can justify ourbusiness is if we can do it betterand provide solutions that makeour customers more profitable. If we don’t do that, we cease toexist.”

Striking a balance between people and machine was instru-mental in helping Libra turn thepage on 2009, when business declined about 35% as its customers suffered through theeconomic meltdown.

“We thought our diversifica-tion would make us recession-proof, but we were wrong,” Howell says. “But as we saw therecession coming, we focused our efforts on expanding our customer base and looking at newregions and markets.”

Libra’s existing customer basehas since been revitalized, and withthe addition of the new business,the company grew almost 75%last year and has added 65 jobs.

“By holding onto our existingcustomers (even at reduced levels)and nurturing new prospects, wewere able to weather the storm,”Howell says.

Mentor-based Libra Industriessays it hasweathered therecession by emphasizing relationshipswith its customers andby continuing toinvest in itsbusiness.

See SPOTLIGHT Page S-9




ACG Clevelandcongratulates

the winners of the15th Annual

Deal Maker Awards

216-696-8484 • 216-696-2582 [fax]1120 Chester Avenue, #470 • Cleveland OH 44114

www.acg.org/cleveland • [email protected]

2011 Award Recipients

SPONSORS

CORPORATE

A. Schulman, Inc.

Fairmount Minerals Ltd.

Shearer’s Foods, Inc.

BUYOUT FIRMThe Riverside Company

LIFETIME ACHIEVEMENT AWARDA. Malachi Mixon, III

PPrriivvaattee eeqquuiittyy hhoonniinngg iinndduussttrryy ffooccuussBy STEWART KOHL

W hen Riverside startedout in 1988, everyonein the private equityindustry seemed to be

a generalist investor. Today, mostevery firm in the country seems to bea specialist — or at least has special-ized areas of focus. So what changed?

Many factors drove the trendtoward specialization. We’re confi-dent it will continue, and we’vebeen active in building out ourspecialized areas of focus. Most ofour peers in Northeast Ohio haveindustry specializations that bothmirror ours and include other verti-

specialties operating within ourgeneralist framework. This allowsus to “comparison shop” andmake sure that our industry specialty buys are at appropriatevaluations and with equally attractive risk-reward propositions.

As the private equity industrycontinues migrating towardgreater specialization, we’ll keephoning and expanding our ownspecialties. It’s an increasingly competitive and complex world,and we need to keep up. But considering that specializationhelps drive growth, create jobsand make investors more money,we’re believers. ■

Stewart Kohl is co-CEO of The RiversideCompany. Contact him at 216-344-7614or e-mail [email protected].

cals like manufacturingand retail.

A cynic might see specialization as the new“special sauce” for privateequity, but it’s far from agimmick. We have greatreasons for buildingteams of highly trainedexperts with unsurpassedindustry experience.These reasons tend tofeed into one another:

■ More experience meanssmarter bids, more growth, highermargins and/or more clever exits.In short, it means better returns.

■ Investors, lenders and invest-

ment bankers increasinglylook for sponsors withindustry experience.

■ Deals and targetcompanies are gettingmore complex. Many in-dustries involve challeng-ing regulatory, technicaland legal aspects. In afast-moving bid process,we need people who understand those issues

from the start to get to the closing. But specialties don’t endthere. We need them on board asexperts and operating partnersproviding guidance.

After completing nearly 250

acquisitions, we still considerourselves industry-agnostic butwe’ve become experts in healthcare (50-plus acquisitions) and training and education (20-plus acquisitions), and have had con-siderable and repeated success inareas like franchising and software.

Industry specialization permeateseverything we do. We market ourskills and focus deal originationefforts in these verticals. Ourtransactors become specialistsand our operating partners bringindustry experience to complementour investment experience anddrive growth.

Riverside operates as a set of

STEWARTKOHLRRIIVVEERRSSIIDDEE CCOO..

ACG laudstop dealmakers

ACG Cleveland will honorthe area’s top dealmakersduring the 15th annual DealMaker Awards ceremony

Jan. 27:

A. Schulman, Inc.A. Schulman, Inc. (ASI) is a

publicly traded international supplier of high-performance plasticcompounds and resins used as rawmaterials. In 2010, ASI closedthree strategic acquisitions to support its growth: McCann Color,Inc.; ICO Polymers, Inc.; andMash Compostos Plasticos.

Fairmount Minerals Ltd.Fairmount Minerals is one of the

largest producers of industrial sandin the U.S. In August 2010, Fair-mount sold a majority interest,which included an equity contri-bution, plus senior debt financing of$775 million, to American Securities.

Shearer’s Foods, Inc.Shearer’s is an international

manufacturer and distributor ofsnack foods. In March 2010, Shearer’sacquired Snack Alliance, Inc. Since 2006, Shearer’s has increasedrevenue more than 300% andadded over 1,000 employees.

The Riverside CompanyThe Riverside Company is the

world’s largest global private equityfirm focused on the smaller end ofthe middle market. Since 1988,Riverside has grown to managemore than $3.4 billion in ninefunds and has completed morethan 200 deals. Over the last twoyears, Riverside has completed 36acquisitions, and has realized 14 investments, including three ofthe five largest gains ever for thefirm.

A. Malachi Mixon, IIIMixon is chairman of the board

of Invacare Corp. He has led thecompany since 1979. During histenure, Invacare has grown to 30factories, 6,000 associates and netsales of $1.7 billion.




Fairmount Minerals would like toextend a sincere thank you to our

Fairmount family members, our valuedpartners in business and communityand to the Association for CorporateGrowth/Cleveland Chapter for the

2011 Deal Makers AwardFairmount Minerals is committed to exceeding customers’

expectations while fulfilling our economic, social and environmentalresponsibilities. We work to ensure that our actions positively

impact all three pillars of our sustainability focus: People, Planet, Prosperity

800-237-4986 • www.fairmountminerals.com

Scott McRill, CPA

Carol McNerney, CPA Ken Levine, CPA

Mark Mussig, JD Steve Goykhberg, MBA, CBA

Floyd Trouten, CPA Patty Rubin, CPA

Robert Littman, CPA, MT

Paul Woznicki, CPA

Whether it’s a buy-side transaction, sell-side transaction, recapitalization, or refinancing transaction, SS&G has the experience to see

you through to a successful outcome.

In our continuing commitment to provide the best client

service, SS&G welcomed Scott McRill, CPA, as director

of our transaction advisory services (TAS) practice.

McRill has nearly 25 years of experience, including more than

a decade of full-time, dedicated transaction experience,

and oversees TAS activities throughout SS&G.

To learn more about how our dedicated, full-time

TAS team can assist you, contact Scott McRill at

440-248-8787 or via e-mail at [email protected].

SSttaarrttiinngg uupp iiss eeaassyy;; ssttaarrttiinngguupp rriigghhtt iiss kkeeyy ttoo ssuucccceessssBy JOE JUSTER

Americans are entrepre-neurs at heart, starting anew business about every10 seconds. While starting

a business is easy, starting a businessright is hard. Approximately 25%fail within two years, and 75% failwithin 10. Entrepreneurs must takeinto consideration a range of legalissues involved in starting up right.

Protect your idea Companies rise and fall on the

strength of their ideas. Trade secrets,copyrights, patents, trade names,trademarks and web site domainnames can protect those ideas, aswell as your brand and corporateidentity. A patent will protect an invention if it is truly new or “novel,”but patents require complete publicdisclosure of your invention and taketime and money to obtain and defend.Trade secret laws protect ideas thatcannot be patented or that you donot want to disclose. Registeredcopyrights for written material, tradenames and trademarks for corporateand product names and logos, anddomain names for web sites are notas expensive to obtain as patentsand are usually a good investment.

C-corp or LLC? When organizing an entity, the

primary concerns are avoidingpersonal liability for businessobligations, minimizing taxes andraising capital. Profits are taxedtwice in a C-corporation (at thecorporate level and the share-holder level). Limited liabilitycompanies combine one level oftaxation at the member level withlimited liability. If your businesscan be financed by friends andfamily, a limited liability companyis a good choice. But if you fore-see multiple financing rounds,choose the C-corporation.

Money mattersBanks generally will not finance

startups because of their speculativenature. Therefore, you’ll need to sell equity to family, friends and, perhaps, “angels” — wealthy individ-uals who invest in and advise startups. Be sure to comply with, or get an exemption from, federal and state securities laws. In all instances, you must fully dis-close the risks of the investment, including the very real possibilitythat everybody could lose their money.

Getting outThe demands of running a busi-

ness leave little time for planningyour exit, but you must do so tomaximize your company’s value.Run your business as if it were always for sale.

This mindset will help you focuson doing those things that will drivethe highest value if and when youdecide to sell. ■

Joe Juster is chair of the General Corpo-rate group at Calfee, Halter & GriswoldLLP. Contact him at 216-622-8433 ore-mail [email protected].

When to organize If you will operate largely within

Ohio with a few owners, incorporatein Ohio. Ohio corporate laws aresufficiently established and deferen-tial to the decisions of officers anddirectors. Organize as soon as possible to facilitate contracting inthe name of the corporation so as toavoid personal liability. Early incor-poration also will justify a low valueon your company shares, helping youavoid being taxed on “cheap stock.”

Sellers should monitormanagement, businessBy MICHAEL F. PAPARELLA

One of the mostfrequent ques-tions posed bycompany owners

over the last two years is,“When will be a goodtime to sell my company?”Each company is unique,and the answer will de-pend on the characteris-tics defining its situation.

Underneath the surface of thequestion, however, lies the fear ofthe unknown as it relates to theuncertainty of the economy, theindustry, the credit markets andM&A cycles.

For most healthy, good-performing companies, those unknowns should not greatly impact the value of a business. AsRalph Waldo Emerson once said,“Can anybody remember whenthe times were not hard and money not scarce?”

When selling a business, valuetends to be driven not by the vagaries of tertiary markets andeconomies but by three control-lable attributes: quality of theManagement team, historical Performance of the business andthe three-year Growth plan forthe business (collectively MPG).

Certainly, the industryin which the companyoperates will dictate somerange of value; but by focusing on MPG, man-agement can influencegreatly the outcome of abusiness sale, regardlessof external conditions.

The reality is that evenin today’s difficult eco-nomic environment, theFortune 500 companies

collectively have more than $1 trillion in cash on the balancesheets, and U.S. private equityfunds have more than $450 billionin uninvested capital. These buyersare looking for good companies toacquire and are willing to pay forquality.

Indeed, the top five transactionsfor each of the past three years(down years for M&A and transac-tion values) have occurred in 10industries (pharmaceutical, tele-com, and oil and gas are the repeat industries), with a transac-tion value range of 5.5x EBITDAto 32.9x EBITDA, an average EBITDA multiple of 12.8x and amedian multiple of 10.1x.

These numbers compare favorably to the overall transac-tion values for deals in the same

MICHAELPAPARELLACCAANNDDLLEEWWOOOODDPPAARRTTNNEERRSS

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See SELLERS Page S-9




ulmer.com

POWER OFATTORNEY?Make that a double yes.

ulmer.com

We’re not your typical law fi rm. Sure, we’re a Fortune 500 “Go-To Law Firm,” a member of the 2011 BTI Consulting Group “Client Service A-Team,” a 2010 U.S. News & World Report - Best Lawyers “Best Law Firm,” and our attorneys are routinely ranked as “Best Lawyers in America” and “Super Lawyers.” But more importantly, we’re passionate dot connectors who know the power of relationships. We like to get to know you and your business. Imagine that.

Chicago Cincinnati Cleveland Columbus

PETER ROME

[email protected]

BRIAN O’NEILL

[email protected]

ulmer.com

Buyer beware: Don’t bestar-struck by every dealBy LLOYD BELL

In an environment with lowinterest rates, changing demo-graphics and what hopes to bean improving economy, buying

a business can be a life-changingexperience. With apologies to TheMiracles, “Try to get yourself abargain, son … Don’t be sold onthe very first one …” Good advicefor the aspiring business owner:You’d better shop around.

■ Profile: One of the biggestmistakes an aspiring owner canmake is to look at every possibledeal. Buyers should take the timeup front to define the profile ofthe companies they will target.Profile includes the industry, thesize of the company, the locationand, most importantly, what skillsthe buyer brings that will increasethe value of the target.

■ Purchase price in multiples:Published multiples are averages.Ignore the multiples and workwith your advisers on developingan accurate financial model. Thecompany’s expected performancewill dictate the multiple, not theother way around.

■ Due diligence: Even whenbuyers are familiar with an industry,other professionals — be it legal, financial, operational or techno-logical — need to be brought in to conduct due diligence. Buyers

need to be prepared to spendmoney on the investigation withthe understanding that it is not uncommon to spend time andmoney and still have no deal.

■ Financing: Getting a dealfunded is easier now than it was ayear ago, but it still can be a diffi-cult undertaking. An experiencedadviser can point the buyer to financing sources more likely to fund a particular transaction.

■ Patience: Buying a com-pany can be frustrating for anindividual used to thingsfollowing a stricttimeline. Expectthat the processwill take longerthan expected, andthat the deal may seemingly die once or twicebut eventually come back andget closed.

If that business for sale does notfit the profile established or some-thing serious gets discovered during due diligence, it’s better tolook for a better fit than to changethe acquisition plan to fit the target.“Pretty girls come a dime a dozen… I’ll try to find you one who’sgonna give you true loving.” ■

Lloyd Bell is the director of the corporatefinance practice at Meaden & Moore.Contact him at 216-241-3272 or [email protected].

Three mistakes not to make when conducting due diligenceBy ELIZABETH EVANS

In any merger or acquisition, abuyer needs to conduct duediligence before it commits topurchasing a target company.

Due diligence assists in testing andproving the economics of a trans-action. A buyer needs to receive

accurate and adequateinformation so

that it can negotiate apromisingtransac-tion, andmost

importantly,avoid surprises. Items

uncovered through the due-diligence process — such aspurchase price adjustments,negotiating different repre-sentations and warranties, or

requiring specific indemnities or escrows — can have a serious impact on a transaction.

The following are common mistakes that buyers should avoidwhen conducting due diligence:

1Not asking the right questions.Beginning with a basic due-diligence request list is not

enough. A buyer must tailor therequest list to the target companyand industry. A buyer and its teamshould research the target company

and the industry in which it operates— particularly any regulatory orother critical customer information.The due diligence request list shouldthen be revised based on what isapplicable to the target company.

Knowing what to ask is key to conducting effective due diligence. If the request list is either too general or too broad,the seller may not understandwhat the buyer is looking for. Bemore specific in order to obtainthe right information.

2Not asking the right people.Due diligence should consistof more than asking for and

reading documents from a targetcompany. Visit the target companyand talk with management.Knowing which members of management to reach out to regarding specific due-diligence requests not only will assist a buyer in obtaining the informa-tion, but the buyer may also receive more accurate — and moretimely — information.

Due diligence also should incor-porate interviews and interactionswith management. The people ofa target company are an integralpart of its history and information.A buyer should understand theobjectives of each party it interactswith and extract the key informa-tion from the person and situation.

3Not having the right team.Each transaction is differentand, as such, a buyer must

determine which team membersare essential in analyzing the specific transaction. Generallyspeaking, a team would consist of legal, business, accounting and tax specialists. It may also be necessary to retain outside consultants, such as regulatory, insurance or environmental specialists.

The team members should provide a buyer with expert guidance on due diligence that isuncovered and assist in exploringpotential liabilities or risks. Failureto do so may result in overpayingfor the target company, delayingthe closing, or incorporating inad-equate provisions in the purchaseagreement.

Having the appropriate team inplace will allow a buyer to feelconfident and comfortable thatthe transaction is being properlyevaluated.

A well-organized due-diligenceprocess can help prevent a buyerfrom unhappy surprises post-closingand lay the foundation for a successful acquisition strategy. ■

Elizabeth Evans is an associate in theCorporate & Securities Practice Group ofBenesch’s Cleveland office. Contact herat [email protected].




www.melcappartners.comSecurities offered through Burch & Company, Inc. Member FINRA / SIPC.

MelCap and BurchCo are not affiliated entities.

5164 Normandy Park Drive • Suite 285 • Medina, Ohio 44256Phone 330/721-1990 • Fax 330/721-1991

Al MelchiorrePresident

[email protected]

Sean DemlowVice President

[email protected]

Tim O’TooleVice President

[email protected] Pacholewski

Vice [email protected]

Marc Fleagle Analyst

[email protected]

MelCap Partners is an investment banking advisory firm specializing in providing highquality and innovative financial advisory services to middle market companies. For moreinformation on the above transactions, or how we may be of assistance, please contact:

The operating assets of

Akron, OH have been acquired by

Total Distribution, Inc.a subsidiary of

Canton, OH

The undersigned initiated the transaction, assisted in the negotiations, and served as financial advisor

to Terminal Warehouse Incorporated.

The operating assets of

STERIS Corporation’sHausted® Patient Handling Business

Montgomery, AL

have been acquired by

Pittsburgh, PA


to STERIS Corporation.

East Liverpool, OH

has been acquired by

Newell, WV


to The Hall China Company.

The assets of

Thayer Power & Communication LineConstruction Co., Inc.

Fairview, PAhave been acquired by

Bloomfield Hills, MI

The undersigned initiated the transaction & acted as exclusivefinancial advisor to Thayer Power & Communication LineConstruction Co., Inc., Debtor-in-Possession, in this sale

transaction.

What do You Value?

Creating Value.

To reach our Cleveland Office call 216.241.3272 or visit www.meadenmoore.com

Certified Public Accountants

Audit and Tax

Business Solutions

Corporate Finance

Employee Benefits Audits

Investigative Accounting

Management Development

Wealth Center

Managing legal costs of M&ABy JEFFREY A. FICKESand TERRENCE H. LINK II

“How much is thisdeal going to costme in legal fees?”Many executives

and business owners have askedthis question, often receiving theanswer “It depends.” This answeris impractical when creating budgetsor advising shareholders, investorsand other stakeholders. To obtaina more comprehensive, useful answer, consider the following:

Where are the warts? Whileproper due diligence is critical to investigating a seller’s organization, it also can be used to estimate legal fees. An environ-mental remediation business, forexample, is heavily regulated, requiring a significant amount ofdue diligence. An initial review of the seller’s permits and licensesand other environmental compli-ance matters provides counselsome level of predictability regarding legal fees. Additionally,product recalls, lawsuits, tax disputes and other business“warts” that increase legal costscan often be found, and related legal costs estimated, in early stagedue diligence.

Attitude is everything. Buyers,sellers and their attorneys oftendirectly correlate the purchaseprice of a deal to the anticipatedlegal fees. Instead, the sophistica-tion and attitude of the buyer,seller and their respective counselshould be indirectly correlated toestimating legal fees. A buyer experienced in M&A transactionscan perform due diligence on theseller’s business with less involve-ment from outside counsel. An attorney without M&A experiencemay not be efficient or effective inrepresenting a seller in negotiatingkey purchase agreement concepts.While this attorney should be involved in the transaction as theseller’s trusted adviser, he or sheshould not have primary negotiating

Tax legislation to the rescuethe final quarter.

However, President Barack Obama on Dec. 17 signed into lawthe sweeping 2010 Tax Compro-mise, which extended capital gainrate reductions through 2012.Business owners will look to liqui-date their investments prior to2013 to take advantage of the lowcapital gains rate.

100% depreciationThis provision permits businesses

to expense 100% of “qualifying”property purchased from Sept. 8,2010, through Dec. 31, 2011.While this should spur some companies to increase capital expenditures during 2011, manycompanies already have capital-expenditure restrictions in placeby their lenders and may look foroutside equity to fund these purchases.

Estate and gift taxesWhile death and taxes are

certainties, they shouldn’t neces-sarily coincide. Before the passageof the 2010 Tax Compromise, estate and gift tax rates were set toreturn to 55% with an exemption

of $1 million. The 2010 Tax Compromise pro-

vides an estate tax rate of 35% and$5 million exemption through2012. Like the capital gains rateextension, business owners maylook to transfer investments to thenext generation to take advantageof the low estate and gift tax rates.These types of transfers often require outside capital and shouldprovide an opportunity for privateequity.

Another pending legislativechange of note is that Congresshas had repeated discussions surrounding taxing carried interests as ordinary income. Ifpassed, this measure would subjectthese interests to a much higherrate of tax. While nothing hasbeen passed at press time, the issue will likely resurface. Industryexperts fear that such legislation, if passed, will discourage future investment. ■

Sean Kelly is tax manager at Grant Thorn-ton LLP. Contact him at 216-858-3717or e-mail [email protected]. TomFreeman is tax practice leader at GrantThornton LLP. Contact him at 216-858-3700 or e-mail [email protected].

and drafting responsibility. Theseller could reduce legal costs andlikely receive more qualified legalcounsel by engaging M&A coun-sel. Finally, the parties’ relativemotivation to complete the trans-action and level of trust is impor-tant. Lack of trust or professionalismcan prolong or terminate deal negotiations.

Third parties. Banks, investmentbankers, consultants, regulatoryagencies, landlords, customers andother parties may be involved inany deal. Typically, counsel nego-tiates the terms of those arrange-ments, so the extent to whichthird-party contracts or consentsare required affects fees. Finally,the negotiation of non-competi-tion and/or employment agree-ments with the seller’s employeesand others impacts fees.

Alternative fees. Alternative feearrangements allow the buyer orseller to manage M&A fees, partic-ularly when the buyer or seller hasmultiple planned acquisitions ordispositions. Some examples include fixed/flat fees, capped feesand discounted hourly billing rateswith a “results-based” fee or “successfee.” Alternative fee arrangementsare often fluid in nature, requiringopen lines of communication between counsel and client.

While there may be additionalfactors specific to each deal thataffect M&A legal costs, an analysisof the above factors with your at-torney will help you plan for andbetter estimate your legal fees. ■

Jeffrey A. Fickes and Terrence H. Link IIare partners for Corporate and BusinessServices, Roetzel & Andress. ContactFickes at 330-849-6613 or e-mail [email protected], or Link at 330-849-6755 or e-mail [email protected].

By SEAN KELLY and TOM FREEMAN

In the wake of the economicdownturn over the past twoyears, many companies revamped growth plans as a

means of cutting costs to ensuretheir continued existence.

As cost-cutting measures havetaken hold and the economy has begun to rebound, many companies are re-evaluatinggrowth opportunities. With additional liquidity available oncompanies’ balance sheets, plusslowly increasing access to credit,decisions will be made evaluatingorganic growth and growth-by-acquisition strategies.

Several passed and proposed taxlaw changes have been enactedduring the past year that will impact the landscape of growthand acquisition decisions, including:

Tax breaksA cornerstone of the 2001 and

2003 tax breaks was a reduction in the capital gain tax rates to amaximum of 15% for individuals.The tax cuts, set to expire at theend of 2010, caused a flurry ofmerger and acquisition activity in




Based in Cleveland With a Window to the WorldRiverside has been investing in and building small businesses since 1988.

To learn more about Riverside’s strategies to grow companies with $1 million -

$30 million in EBITDA, visit riversidecompany.com or contact Scott Gilbertson,

Principal, Origination at [email protected].

riversidecompany.com | phone: 216 344 1040

1 9 o f f i c e s

1 3 c o u n t r i e s

4 c o n t i n e n t s

5 0 P u b l i c S q u a r e , 2 9 t h f l o o r , C l e v e l a n d , O H 4 4 1 1 3

Focused on investments in high value manufacturing and proprietary business services companies with transaction values from $25 - $250 million.

Helping to write success stories in the middle market for more than four decades

Our passion is partnering with management teams to build top performing businesses. That’s why we’re proud

to recognize our investment in one of Northeast Ohio’s most innovative industrial companies, .

www.morgenthaler.com

Amish MillsFor Chris Karman, chairman

of Amish Mills, surviving the recession was only half the battle.The company had to reinvent itself to survive a “dying” industry.

Karman and his brother, Ted,bought the company — thencalled Country Curios — fromowners David and Daniel Yoder in2003. Craftsmanship was never indoubt; in fact, it is the company’sbiggest selling point. It was perception (‘country’ and ‘curios’)that was thwarting growth.

The challenge was to tell its“handcrafted by Amish” story andto find the right markets for asmall player in a $50 billion furniture industry to showcase itsmade-in-Ohio talent.

“When people think of Amishfurniture, they often think of sturdybut big, chunky furniture. But‘Amish’ isn’t a style, it’s the pride in

Amish Mills has gained market share over the years by creating quality furniturethrough hand craftsmanship.

Spotlight:‘Made in Ohio’a selling pointfor local firms

Sellers: Solid team a benefit

Continued from Page S-4

hand craftsmanship,” Karman says. A name change to Amish Mills

was the first step in the company’stransformation from bit player toindustry dynamo.

Amish Mills, which sells tomore than 700 independent dealers across the U.S., expandedits line to include bedroom andoffice furniture, and sells kitchencabinets through its Amish MillsCabinetry line.

Its strong Amish craftsmanshipniche, diversified product lineand well-honed sales messagehave paid off. In three shortyears, Amish Mills has grownfrom 12 employees to 90, built a

new three-acre manufacturing facility in Millersburg and cap-tured nearly $12 million in sales.

“We never want to lose track ofquality and our customers, sowe’re carefully managing ourgrowth,” Karman says. “We areblessed to be in Ohio where thereare so many fantastic craftsmen,who are respectful and fun —that is reflected in their work. It’swhat sets us apart. We really believe the sky is the limit.” ■

Cheryl Higley is a freelance journalistbased in Cleveland and serves as a section coordinator for Crain’s ClevelandBusiness Custom Publishing.

size range for all of 2006 (9.9x) and 2007 (10.7x), the so-calledhigh-water marks for recent M&Avalues. Further research showsthat the acquired companiesboasted a good MPG.

In addition to a good MPG, the one trait each of those trans-actions likely had in commonwas a good transaction team, including an accounting firm,

legal counsel and an investment banking firm that believed intheir story and could drive valueno matter how difficult the timeswere or how scarce money wassupposed to have been. ■

Michael F. Paparella is managing director for Candlewood Partners, LLC. Contact him at 440-264-8007 or e-mail [email protected].


By DANIEL G. BERICK and GREGORY K. GALE

Private equity investmentsin publicly traded compa-nies are nothing new. Private Investment in

Public Equity (PIPE) transactionshave been around for years, andhedge funds long have used pri-vate funds to invest in publiclytraded securities.

More recently, though, wehave been seeing traditional private equity sponsors — evensponsor groups that do not havesignificant experience with investments in public equity —find creative ways to take advantage of opportunities withpublic companies.

Many of these investment opportunities are found in publicly traded companies thatare relatively thinly traded andhave credit facilities that are indefault or are nearing maturity.Even with the thawing creditmarkets and a relatively robusthigh-yield market, many of thesecompanies do not have access todebt on attractive terms and arenot readily able to make new public offerings of equity or debt.

In addition to traditional PIPEinvestments and subordinateddebt transactions, private equitysponsors can purchase outstandingdebt or equity, which may betterposition the target public companyto raise replacement or additional

financing. We have recently seen private

equity funds provide backstopcommitments for rights offerings.In these transactions, the publiccompany distributes rights topurchase additional equity to its stockholders, and the privateequity fund commits to purchaseany equity that is not acquired by the stockholders through exer-cises of the rights.

In this way, the public companyissuer has assurance that it will be able to raise the financingeven if there is a limited or uncer-tain market for the rights being offered.

In exchange, the private equityfund can receive transaction feesand an equity stake (and a posi-tion of influence) in the target.This equity position is often either freely tradable immediatelyor subsequently registered to allow the private equity sponsorliquidity.

In an increasingly efficient marketplace for the sale of privatecompanies, investments by private equity funds in publiccompanies provide another avenue to achieve returns to limited partners. ■

Daniel G. Berick is a partner withSquire, Sanders & Dempsey. Contacthim at 216-479-8374. Gregory K. Galeis a partner with Squire, Sanders &Dempsey. Contact him at 216-479-8098.

Public marketplace ripefor private opportunities




Go for it. We’ve got your back.At Roetzel, our attorneys are like our clients - entrepreneurial, innovative and results-oriented. Just ask Al Salvatore.

To learn more, call Al directly at 216.615.4845 or visit ralaw.com/business_services.

N E W Y O R K

Our Business Services Group focuses on maximizing opportunities and minimizing risks so you can focus on your business. We partner with our clients to serve as trusted advisors and extensions of their management teams. Team members, including , ,

and , have your back.

MCM Capital PartnersWould Like To Congratulate One Of Its Founders:

A. Malachi Mixon III

On His Lifetime Achievement Award

MCM was founded in 1992, with the support, guidance, and vision of Mal Mixon, one of northeast Ohio’s premier business leaders.

MCM Capital Partners is a Cleveland, Ohio based private equity firm focused on acquiring niche manufacturers, value added distributors and specialty service companies that generate up to $75 million in annual revenues and having enterprise values of less than $50 million.

216-514-1840 | 216-514-1850 [fax]

25201 Chagrin Blvd. Suite 360 | Cleveland, OH 44122

web: www.mcmcapital.com | email: [email protected]

ABOVE, BELOW: Attendees gathered in September to network at the Great Lakes Capital Connection,hosted by ACG Cleveland, at the Rock and Roll Hall of Fame and Museum.

Outlook: Market presents valuesector,” says Stewart Kohl, co-CEOof The Riverside Company. “It’s agreat place to do business. Thefirms continue to become betterowners and help drive perfor-mance and provide valuable resources and assistance to theirportfolio companies.”

Keys to activityLocal private equity firms such as

Riverside and investment bankingfirm MelCap Partners cite severalfactors that are coming together tospark a resurgence in M&A activity:

Dry powder surplus. With closeto $500 million committed to pri-vate equity that has yet to be in-vested, the improving economy

will have firms looking for gooddeals. Riverside’s Kohl already isseeing the pipeline opening. “Weclosed 11 acquisitions in fourth-quarter 2010,” he says. “We antici-pate a bit of a pause in the firstquarter, but we expect 2011 to bea very good year for Cleveland private equity.”

Healthy deals returning.Al Melchiorre, president of MelCap Partners, says the firm hada record year in 2010 by focusingon healthy M&A transactions.

“While we continue to see activity in the distressed market,we’re seeing healthy deals startingto come back, in large part due tothe improving economy,” he says.While deals are starting to rampup, unrealistic expectations on thepart of the seller could throw ahiccup into the recovery. Accordingto the ACG-Thomson Reutersyear-end 2010 DealMakers survey,the greatest drag on M&A activitycontinues to be the seller’s unwill-ingness to sell at multiples offered.

Banks coming back in. Lendersare conservatively venturing backinto the market.

“Banks have done a good job of cleaning up their portfolio andare looking to add assets to thebalance sheet, but the amount ofleverage is still conservative,” Melchiorre says. “You may be ableto borrow a little less than you’dlike and pay a bit more than you’dlike, but debt is available for gooddeals,” Kohl adds.

Clearer tax picture. Some 2010activity was spurred by the uncer-tainty of whether the federal gov-ernment would act on tax breaks

that were set to expire. The tax compromise passed in December clarifies the picture, andshould help stimulate additionalactivity, Melchiorre says.

Middle market popularity

According to ACG’s Fine, theoverwhelming majority (60%) ofprivate equity deals completed inthe last two years were in the middle market, with 85% of thedeals valued at under $1 billion.The middle market, he says, is abreeding ground for smart, entre-preneurial companies.

Kohl agrees: “High-quality companies that performed wellthrough the downturn are ingrowing industries and have somecompetitive advantage that thebusiness will continue to growand perform are prime candidatesfor deals.”

Middle-market private equity isattractive, particularly in today’seconomic climate, to both sellersand buyers.

Private equity firms can leveragetheir size to benefit the individualcompanies within their portfolio— from purchasing to consultingand access to capital that mightotherwise be out of reach for acompany on its own.

“Companies that are owned byprivate equity have an advantage,”Kohl says. “Of the 72 companieswe own, they have access to resources that similar companiesof their size would never have access to — that is significant.”

Whether a seller is looking toexit the business or just take it tothe next level, private equity canmake it possible. More private equity firms are holding onto assets longer, according to the ACG-Reuters survey. That requiresa different investment and man-agement strategy and shows thatthe firms aren’t in the deal for aquick flip on the investment.

“Private equity provides non-traditional, non-banking capitalresources that can help companiesstimulate growth, which creates jobsand other opportunities in North-east Ohio,” Melchiorre says. ■

Cheryl Higley is a freelance journalistbased in Cleveland and serves as a section coordinator for Crain’s ClevelandBusiness Custom Publishing.





When It Gets Down to Business…Solon Gets It!The City of Solon welcomes these new businesses:BIZ Quality Sales

Divalicious Boutique

Fastenal

Greenes Fence Co. Inc.

Pile Dynamics, Inc. / GRL Engineers, Inc.

Wrap-Tite, Inc.

And thanks these real estate professionals for bringing new business to Solon: Matt Beesley - CRESCO Real Estate

Simon Caplan - CRESCO Real Estate

Bob Garber - CRESCO Real Estate

Joseph Greenberg - Greenberg Real Estate Advisors

Eliot Kijewski - CRESCO Real Estate

David Stecker - Greenberg Real Estate Advisors

Solon’s Got It!Prime industrial, office and retail sites at www.solonohio.orgCity of Solon • 34200 Bainbridge Road • Solon, Ohio 44139 • 440.337.1313 Peggy Weil Dorfman, Economic Development Manager • [email protected]

The Solon Select is a distinguished group of more than 800 businesses that have chosen to locate in the City of Solon.

Squire, Sanders & Dempsey corporate securities lawyers have the knowledge and experiencenecessary to help our clients reach their goals. In fact, The Best Lawyers in America namedDan Berick 2011 Cleveland Securities Lawyer of the Year.

An Experienced Corporate Securities Team

Squire, Sanders & Dempsey refers to an international legal practice which operates worldwide through a number of separate legal entities.Please visit www.ssd.com for more information.

ACG Cleveland 2010-2011 Board of DirectorsPRESIDENTTheodore WagnerLibman, Goldstine, Kopperman & Wolf

PRESIDENT ELECTRandy A. MarkeyCapital Acceleration Partners

IMMEDIATE PAST PRESIDENTPatrick GallagherFahlgren Mortine

EXECUTIVE VICE PRESIDENTSBrandDavid HadleySegmint

ResourcesJeffrey LeonardThe Leonard Legal Group Co.

ProgrammingSean McCauleyPNC Business Credit

TreasurerJoseph F. MaslowskiRoetzel & Andress

ASSISTANT TREASURERScot R. SmileyScott R. Smiley, CPA

SECRETARYM. Joan McCarthyMJM Services

VICE PRESIDENTSACG CupEric M. KuhenMarsh

Thomas FreemanGrant Thornton

Douglas K. WingetFirst Merit

Deal Maker AwardsMurad A. BegLinsalata Capital Partners

Economic DevelopmentMoses R. JhiradPNC Bank

Donald W. MajcherOhio Aerospace Institute

Thomas ZuckerEdgePoint Capital

Golf EventRudy BentlageChase Business Credit

Great Lakes Capital Connection

Al MelchiorreMelCap Partners

James M. HillBenesch, Friedlander,Coplan & Aronoff

Timothy G. HealyLinsalata Capital Partners

MembershipMartin S. GatesCalfee, Halter & Griswold

James P. MarraBlue Point Capital Partners

Henry E. SiebertPorter, Wright, Morris & Arthur

NominationsTrent MeteerTriState Capital Bank

Public RelationsBrad KostkaRoop & Co.

Programs — RegularJohn Saada, Jr.Jones Day

Programs — SpecialScott SeelbachPrimus Capital Funds

Karen TuletaMorgenthaler

Women in TransactionsDenise CarkhuffJones Day

DIRECTORS AT LARGEGuy A. FabePricewaterhouseCoopers

Wendy S. NealInternational Commodity Alliance

Social media partof new age of deal originationBy ROBERT KINGSBURY

As I was responding toposts on my Facebookpage last week, I beganto contemplate the

impact social media have had onour lives. Become a fan, like us,follow me, friend me, tweets,posts, tagging, news feeds, statusupdates … it seems that’s all kidsare worried about these days.Then I balked at my thoughtprocess … kids?

Social media (blogging, podcasting, online video, social networking and wikis) are nolonger just for teenagers and college students. More than 112million users on Facebook are between the ages of 25 and 64,and LinkedInhas grown tomore than 80million profes-sional profiles(35 million in the U.S.) indi-cating social media have penetrated all aspectsof the business world and aretransforming the ways in whichwe communicate.

The Center for Marketing Research at the University ofMassachusetts Dartmouth’s mostrecent study of the Inc. 500, a listof the fastest-growing privately-held companies in the U.S.,found that most businesses arebeginning to recognize the importance of leveraging socialmedia, with 91% reporting theincorporation of at least one socialmedia service or tool in 2009. Respondents believe social mediaprovide a competitive advantage.

Below are five compelling reasons to consider using socialmedia tools to promote your firm:

■ Find your audience. Peopleare going to find you where theyare, not where you want them tobe. Your target audience is con-stantly communicating on socialmedia sites. Find and identifywhat sites they frequent and develop a social media strategybased upon your research.

■ Brand recognition. Using social media allows your companyto reach a broad audience of poten-tial investors and acquisition targets. It augments effective andefficient communication of yourbrand, which is invaluable fordeal flow, fundraising, recruitingand investing.

■ Search engine optimization.Search engines like Google andMicrosoft Bing are increasinglyusing information from social mediasites to influence the rankings insearch results. Thus, establishinga presence on social media siteswill enhance your visibility.

■ Brand management. Havinga social media presence allowsyou to better understand whatcurrent and potential clients aresaying about your firm. Throughactive social media monitoring,you have the opportunity to address negative comments andcorrect false or inaccurate infor-mation about your brand.

■ Niche marketing. Social media allow you to cost-effectivelyreach specific subsets of individuals

based on theirpersonal prefer-ences and interests,which allows youto create uniquesocial media pro-files and strategiesbased on your

target audience. MCM Capital Partners

launched a comprehensive socialmedia campaign about sixmonths ago. Each communica-tion method employed and itscontent is viewed through thelens of “how does this help ourfirm?” and “how does this im-prove the likelihood our targetedaudience will find us?”

Private equity investing is a relationship business encompassinga relatively small number of LPs,entrepreneurs, executives and intermediaries. As more personalrelationships move online, socialmedia become a very cost-effec-tive way to strengthen a firm’scorporate relationships and increase deal flow.

Successful deal origination, webelieve, will no longer be restrictedto attending industry or networkingconferences, following up onpublished reports, marketingmeetings with intermediaries,mailings, or cold-call campaigns.Going forward, successful origina-tion will also be measured bynumber of visits, impressions,comments, connections, subscribes, likes, shares and re-tweets. Is your firm ready? ■

Robert Kingsbury is a vice president atMCM Capital Partners. Contact him at216-514-1843 or e-mail [email protected].

Your target audienceis constantly communicating onsocial media sites.


Documents

20110124-NEWS--19-NAT-CCI-CL -- 1/21/2011 1:39 PM Page 1 · Association for Corporate Growth (ACG). “It’s nowhere near 2007 levels, of course, but 2010 was better and we are very