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January 07, 2021 | Tom Ballard

Alderman modifies name, adds new executive, acquires new company

In mid-2015 we spotlighted a brand new Chattanooga-based private equity firm then named Alderman Holdings in this article. Some things have changed in the ensuing 67 months, but the core focus on long-term investments in mainline businesses has not.

We talked recently with Ben Brown, one of the three Co-Founders of the firm now known as Alderman Enterprises LLC, for an update. He explained that the name change was made to better reflect the company’s active role with its companies rather than simply being a passive holding company.

In addition, Brown reported that the other two Co-Founders – Andrew Kean and Jay Hildebrand – left Alderman, and Chris Wright, most recently with Oaklyn Consulting, another Chattanooga enterprise, has joined the firm.

“Chris will be primarily operating company facing to facilitate strategy and growth,” he explained.

Both bring complementary skills to Alderman. Brown’s experience includes corporate finance, venture capital, market research, mergers and acquisitions (M&A), and operations across a wide range of industries. In Wright’s case, he has worked with companies on matters of strategic growth, operations, finance, and M&A in an advisory capacity.

Today, Alderman has three portfolio companies and is working on acquiring a fourth. One of the existing companies Dal Industries has two divisions: Dalrymple Rigging and Transport Inc. and A1 Hevi-Lift Rentals. The other two are Southeastern Tool & Design Inc. and Edwin Bohr/Electronics.

Majestic Stone, which was one of Alderman’s first two acquisitions along with Southeastern Tool & Design, was sold last year when a strategic buyer made an unsolicited offer.

“We generally buy and hold, much like the Berkshire Hathaway model,” Brown says, adding, “We are more operationally hands-on than most private equity firms, but we don’t run the companies. We try to help the leadership teams balance their daily responsibilities with thinking strategically about where the business should be going long-term.”

He describes Alderman’s approach as “liberating companies from a short-term mindset and then layering-on expertise, relationships, and capital . . . leaning-in so we can move the needle.”

Up to now, Brown says the investments have been in the immediate Chattanooga area, but Alderman is regionally-focused on opportunities in service, manufacturing and industrial. “We don’t do tech or healthcare,” he says. “There are other people who live and breathe those sectors.”

Many of the companies are family-owned, so Brown says that the Alderman team handles these carefully, as there are often matters of family members, legacy, and caring for employees that the owners care deeply about. Alderman tries to learn the owners’ objectives to ensure the deal is the right outcome for them as well as for Alderman.

Sometimes the right answer involves bringing in new executive leadership. “In that case, there’s a delicate people equation,” Brown says. “What’s it take to find, attract, motivate and retain the right leadership for the long-term success of this business?”

Of the pending acquisition referenced above, he says Alderman began discussions with the owner in 2019. When COVID hit, the deal went on hold, but Alderman worked with the owner on a structure to balance COVID risk and still move ahead.

In late December, Alderman announced that it had acquired Combustion & Control Solutions, a market-leader in the service, repair, sales, and installation of boilers and boiler systems. As part of the transaction, David Flowers has been elevated to Chief Executive Officer of the Chattanooga-based company. He led the sales and engineering groups at CCS for many years.

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