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June 01, 2015 | Tom Ballard

Alderman Holdings has a different approach to equity investments

Alderman HoldingsBy Tom Ballard, Chief Alliance Officer, Pershing Yoakley & Associates, P.C.

Three Chattanooga-based businessmen have joined forces to form a new entity that plans to apply a long-term focus to the investments that it makes.

The new enterprise, operating under the name of Alderman Holdings, resulted from several months of discussions rather than a defined initial strategy.

“We’ve come at it deliberately,” Ben Brown, one of the three Partners, told us. “We literally interviewed each other to make sure we had the same values and business principles.”

With that basis, the next logical question was simple: “What are we going to do together?” The answer was their new venture.

In addition to Brown, whose background includes finance, operations and board room consulting, the other Partners are Jay Hildebrand, an attorney who has been a successful franchisee and partner in an outdoor sporting venue, and Andrew Kean, who is both an investor in and operator of companies.

Their strategy for Alderman Holdings is to build a portfolio of companies, but do so in a non-traditional way.

It starts with an important statistic: 70 percent of baby boomers who own a business do not have a succession plan in place, yet many of these executives want to see their legacy continue. How can this happen when they retire?

The answer to the question is the Alderman Holdings’ business strategy. The team plans to structure deals that enable owners to unlock the financial value they have built into their companies, then work with key employees who desire to continue growing the enterprise and seek upside reward for their effort.

“We will be taking a long-term view,” Brown said, explaining this means Alderman Holdings does not intend to grow the acquired companies to a defined level so it can exit. Instead, the Partners plan to help run the companies they acquire, continuing the legacy of the previous owners.

Another key differentiator is how acquisitions will be financed.

“We are not going to create a fund,” Brown said. Instead, Alderman Holdings will look for opportunities and, as they are identified, put together an investor group for each acquisition.

As they launch the effort, Brown says the team is looking at potential acquisitions within a one-hour drive of Chattanooga. That would include cities as far north as Athens, as far south as Dalton and as far northwest as close to Murfreesboro. Northeast Alabama also fits within the geographic footprint.

“Right now, we’re sector agnostic,” Brown explains. “We like bread and butter opportunities in the service, manufacturing and distribution industries.”

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