A Capital Idea

Solutions-driven process

lends powerful M&A advantage for manufacturing clients

Devin Green is having fun. His team and their clients are, too.

“We have an unfair competitive advantage,” admits Green, who is chief operating officer of The Capital Corporation, a South Carolina-headquartered investment bank that specializes in mergers and acquisitions for private companies across a broad range of industries. “We’re fortunate in that we — and our clients — are able to benefit from the resources we have at our ‘mother ship.’”

This mother ship — a corporate office that umbrellas The Capital Corporation along with various other private companies owned by local entrepreneur Dan Adams — lends robust support to its portfolio companies, across a wide variety of specialties such as digital marketing, financial analytics, software engineering, IT and cybersecurity, human resources and other areas, including even a call center.

As such, Green says,

“The Capital Corporation has resources to do things in a very different way from other investment banks, and our different approach translates into a big difference, often times millions of dollars’ difference, for clients on the sell side.”

Indeed, the Greenville-based investment bank is an industry leader in mergers and acquisitions of lower middle market companies, those with EBITDA ranging between $3 million and $15 million. Its unique approach has led the firm to close more than a half-billion dollars in transactions over the past handful of years with a close rate of more than 90%, which is believed to be top decile in the industry.

“Our formula works,” says Green, “and it works especially well for our manufacturing clients.”

IN-HOUSE SYNERGY

That’s because, while offering some of the best M&A specialists in the business, The Capital Corporation also shares in-house talent with sister companies in manufacturing. The synergy allows the corporate team to understand the manufacturing space as if it’s their own — because they operate within this sector themselves. The Capital Corporation has the proficiency to understand the value of quality controls, operations, purchasing and supply chain management for assessments.

“We’re often able to anticipate the buyer’s point of view,” says Green, outlining a process that goes multiple levels deep on due diligence, preemptively addressing potential concerns prior to taking a client to market. “This allows us to put the seller [our client] in a position of strength, ensuring they capture the full value for their company.”

Steps include a robust SWOT analysis to assess the client’s strengths, weaknesses, opportunities and threats, detailed channel checks, an impartial preview of all the data a potential buyer will review and more. Next, a pre-mortem analysis of every threat and weakness to determine what it will cost to fix identified issues — and what it will cost, in terms of sales price, to NOT fix them.

FINDING THE SOLUTIONS

But The Capital Corporation doesn’t merely identify problems. What sets this M&A process apart is how the team plans out — and then executes — solutions.

After a deep cost/benefit dive born out of the initial SWOT analysis, the team accesses specialists and resources from the “mother ship,” calling upon in-house expertise to revamp client operations, where needed, to prepare the company not just for sale, but for sale at the most advantageous price, which includes properly valuating manufacturing equipment investments. Whether it’s modernizing the client’s marketing and sales models, creating better controls through automated KPI dashboards, or analyzing the scalability and security of their technology stack, Green explains, “We have the unique ability to accelerate their business plan before we bring their business to market.”

Stretching a manufacturing client’s valuation is all in a day’s work for The Capital Corporation. “We are a solutions-driven company,” Green says. “Our multistep process is customized for each client. We identify problems, we solve them, and then we successfully sell the business.”

The Capital Corporation, founded in 1991, is one of only six investment banks in the United States that has achieved IMAP membership — that’s International Mergers & Acquisitions Partners — which offers access to a global buyer network across three dozen countries.

As the Atlantic region’s go-to partner for mergers and acquisitions, The Capital Corporation works with business owners to ensure that their lifetimes of hard work are properly rewarded. “We help our clients unlock the true value of their business that they might otherwise have left on the table,” Green says.