JMP Media – Management had the opportunity to buy the business from the long-time family owner and was seeking an investment partner. JMP was the leader in its market.  The management team was top-rate and was highly interested in investing personal funds in the deal. With no inventory and thus lower working capital requirements, little maintenance capital expense required, and assets that have useful lives of >50 years, the ROE’s in the radio business model were highly compelling. We saw an opportunity to partner with a great management team and further consolidate the market thereby increasing the size of the moat protecting the value of this business. Further, management had negotiated fair transaction terms. Despite making this investment just before the dotcom bubble burst, Nick and management pushed through and completed the consolidation of the additional stations JMP acquired. Management and our investors were rewarded handsomely on this investment.

BBJ Outdoor – Gary Johnson had demonstrated an ability to develop locations and managed to rise to the 2nd largest market share billboard company in the region trailing only Lamar. We recognized Gary’s talent and quickly determined that with our additional capital, he could fly much higher. The outdoor advertising industry is highly regulated which translates into a government assisted moat around the business. With no inventory and thus lower working capital requirements, little maintenance capital expense, and assets that have useful lives of > 50 years, the ROE’s in the billboard business model are highly compelling. The combination of our capital and expertise along with the owner’s talent and  familiarity with his local market helped BBJ more than double the value of its business in about three years.

US Polymers-Accurez – US Polymers had a nice portfolio of proven formulas and sold to the world’s largest and most successful coatings and inks companies such as AkzoNobel, Behr Products, American Packaging and Flint Ink. The tenured customer list demonstrated to us that the chemistry at USPA was sound. The owner ran the business as a lifestyle business and, for instance, in 25 years had never hired a salesperson despite the success of his products in the world’s leading coatings companies. USPA had proprietary formulations and the customer relationships were long and in multiple cases, USPA had sole source status creating a mutual reliance between USPA and its customers. We purchased the business because of the proprietary formulations, the long and mutually reliant customer relationships, and the upside potential to change the culture from a lifestyle business to a more dynamic performer.

ANZ Terminals – FB Investors was invited to help recapitalize this business with one of our long-time investment partners. ANZ was the largest independent terminal business in its region. In this case, ANZ had strong market share, had been issued hard to get permits to handle flammable and combustible materials, had a great location compared to many of the competitors, had upside potential from a large undeveloped parcel that was already zoned, and a financial track record with predictably growing earnings that reached back many years. Further, the management team was as good as it gets and was our partner in this deal. ANZ is one of the best business models we’ve ever had a chance to invest in and it was a pleasure to have the opportunity to partner with our investment colleagues and the day-to-day operators there.

NorthStar Alarm Investors – We were invited to provide growth capital for NorthStar by one of our long time, trusted investment partners who had immersed himself in this industry and identified this young management team’s potential. They had a less mature, but successful track record, the highest integrity and a strong desire to succeed. NorthStar operated in   a mature industry and there was an established secondary market for the alarm contracts it created and a relatively predictable account valuation history. Management faced certain operating obstacles neither we nor they had anticipated and also walked right into the 2008-2009 economic downturn months after we invested.  This pushed the forecast off track within the first two years. Despite these challenges, we supported and encouraged the management team who worked hard and successfully throughout the six year hold period and the business provided a return nearly 9 times better than the performance of the S&P over the same period.