Charleston Deal Alliance

Doing Deals: Evening Post Industries

For more than 130 years, Evening Post Industries has been a fixture in Charleston. It began as a single family-owned newspaper that has grown well beyond its media holdings.

While many people are familiar with the company’s flagship newspaper, The Post & Courier, they may not realize EPI operates in a variety of industries, including real estate, hospice care and pharmaceutical sales. Over the last few years, in particular, the company has created a diversified portfolio.

In 2019, EPI sold off its TV stations providing the liquidity it needed to continue to acquire businesses in new industries, explained Ron Owens, senior vice president and chief investment officer.

Ron Owens

EPI is redeveloping the 11 acres it owns on upper King Street surrounding its corporate offices and The Post and Courier newsroom on Columbus Street. It also has branched out into hospice with Heart of Hospice, which has locations around the Southeast. The company also owns King & Columbus, an advertising and marketing firm, along with EPI Health, a Charleston-based pharmaceutical company focused on dermatology.

With its roots as a media company, Owens said for the last 100+ years, the company has relied heavily on advertising. About eight years ago, the company decided to diversify its revenue streams. Newspaper and TV stations are highly sensitive to advertising which suffer in recessionary times, Owens said.

Now, EPI is focused on diversifying its business interests even more. Tom Hayes, financial analyst for the company, said they are looking hard at service-based industries, such as cloud-hosting, as well as manufacturing and sustainability and climate change.

Tom Hayes

Owens added, “Our investment philosophy is: will the business be around for another 10 years and can we grow it to $20+ million of EBITDA?”

Plus, EPI has the benefit of being a family-owned company that can take a longer view, Owens said. It’s not as sensitive to what happens next month or next quarter. As a result, EPI is looking ahead to investments in renewable energy as well as recycling and energy efficiency.

“Those themes are long lasting. We’re trying to find the right place where a company from Charleston can add value with capital and strategy. We’re finding the right niche in those themes.”

EPI also is committed to adding value to local communities. A family foundation supports organizations and enterprises that have a positive impact on Charleston and other communities where EPI has a presence.

The community-minded approach also led Evening Post Industries to sign on as an early supporter of the Charleston Deal Alliance.

“We like to meet more of our neighbors as people continue to move to Charleston,” said Owens, a founding member of the alliance.

As more and more people make Charleston either their permanent or part-time home, an organization like the Charleston Deal Alliance plays an important role in connecting like-minded professionals. “Somebody next door to me could be working on a similar project and I may not even know it,” he said.

Charleston has become attractive to different types of investors — people looking for businesses to acquire, real estate investors or those managing hedge funds. The Charleston Deal Alliance gives people in financial circles a way to meet and connect.

And it gives a company like Evening Post Industries the opportunity to improve the community for another century — especially as it develops its downtown property.

“We want to help make our city a very good community by developing in a high-quality manner the projects surrounding our building,” Owens said. “This area is rapidly changing, and we can set the tone.”

Evening Post Industries
Ron Owens, senior vice president
Tom Hayes, financial analyst
843-224-7876
eveningpostindustries.com

Member Profile: Manning Unger, Moore & Van Allen PLLC

Here’s the Deal on Manning Unger

Favorite time of the day: I wake up early. I like the peacefulness of the morning.

Productivity hack: Try to plan out your day. That’s part of why I get up early. I can be more productive before everything breaks loose for the day.

Community involvement: First Scots Presbyterian Church, University of Virginia Alumni Association, Charleston Regional Development Alliance, Exchange Club of Metropolitan Charleston

Member Profile: Manning Unger, Moore & Van Allen PLLC

Manning Unger has both a law degree and a MBA, but when it comes to helping his clients with business deals, the law degree wins out.

“I’ve always wanted to do deals. I thought about being on the business side of things, but I liked the legal side better,” he said. “I like to advise people and get into the details.”

Unger serves as Charleston office managing partner at Moore & Van Allen PLLC, a 300-attorney practice with offices in Charleston and Charlotte. Although Moore & Van Allen’s physical presence is in the Carolinas, many of Moore & Van Allen’s practice areas have a national reputation. These practice areas include lender representation in every aspect of lending transactions (including syndicated lending and derivatives), investor representation in private equity, mezzanine finance and venture capital transactions, buyer and seller representation in merger and acquisition transactions, intellectual property, and commercial and technology transactions.

Unger works at the Charleston office on Wentworth Street. His Holy City colleagues are largely transactional, handling financing transactions, corporate matters, including corporate governance and commercial transactions, health care transactions, estate planning, and commercial real estate transactions. The Charleston office also has robust bankruptcy and commercial litigation teams. Unger is both office managing partner and practicing attorney in the areas of financing transactions, commercial real estate and corporate matters. His work consists of providing advice on deal structure and negotiating, documenting and closing deals.

After 22 years in the profession, Unger said the variety keeps his work interesting. “Each company is a little different. You dig into their business model and help advise people on the legal aspects,” he said.

Some of his representative projects include:

Representation of the lead investor in senior secured note and common equity/warrant purchase transactions with technology companies ranging from $5 million to $22 million.
Acting as corporate counsel for a regional health care provider in connection with bond financings (public and private) ranging from $20 million to $400 million.
Representation of a local utility company in connection with a $20 million real estate secured financing transaction.
Representation of investors in several early stage convertible note purchase transactions.
Representation of a regional retailer in connection with store acquisitions and dispositions.
Representation of an international corporation in connection with a multi-million dollar build-to-suit transaction for corporate offices and a distribution facility.
Representation of an institutional lender in connection with asset based lending transactions ranging from $5 million to $15 million.
Representation of institutional lenders in connection with multiple senior living secured financing transactions running from $5 million to $15 million.
Representation of a senior living facility developer in the greenfield acquisition and construction of multiple senior living facilities.
Representation of a national owner of dominant regional and super regional shopping centers in a hotel co-location project.

As the coronavirus gripped the country in spring 2020, Unger pivoted to help clients navigate annual meeting issues and the Paycheck Protection Program, a Small Business Administration loan program to help businesses during COVID-19. As the rules for the program and safety guidance constantly changed, Unger found himself fielding calls at all hours of the day.

Plus, some of his existing deal projects fell through, and others were negotiated or put on pause as businesses waited to see what the full impact of COVID-19 might be. As the economy began to reopen, Unger said most of his projects have “come back in some shape or form.”

When it comes to his work in the commercial real estate space, though, Unger expects the rebound will be slower. Restaurant and retail locations, in particular, will be challenging along with traditional office space as more people make a permanent move to working at home.

That work-from-anywhere concept has been a driver for Charleston’s business community — and likely will be bolstered even more following COVID-19. Unger said the city’s quality of life has attracted a lot of entrepreneurs and investors. “The continued attractiveness of this region has driven that change.”

Unger is one of those rare people who grew up in the Lowcountry. He left his hometown of Walterboro for college and worked as a lawyer in Charlotte for a few years. A self-proclaimed “boat guy,” Unger was drawn back to the waterways of the Charleston coast.

Living in Charleston since 2001, he’s witnessed the area’s growth and development. The natural advantages of the region continue to attract a critical mass of talent — which, in turn, appeals to investors and big brands, he noted.

Organizations like Volvo and Boeing are recognized worldwide so when they make a home in Charleston, others pay attention.

Unger said, “People notice ‘this company’ and ‘this company’ are here. What do they see? That drove a lot of national developers, companies and investors to take a look at this area five, six, seven years ago and it drives others to look at this area now.”

Manning Unger
Charleston office managing partner
Moore & Van Allen PLLC
manningunger@mvalaw.com
843-343-6143
www.mvalaw.com

Member Profile: Adam Fahrer, GreenShoot Capital Management

Here’s the Deal on Adam Fahrer

Favorite time of the day: Early afternoon is a good time to do meetings and get things done; I’m not a morning person.

Best business book: “Buy Then Build” by Walker Deibel

Productivity hack: Attention to detail. For small businesses, it’s really more about execution via discipline and process. Stay focused on the small things and execute them.

Community involvement: Social Venture Partners cultivates philanthropists who collectively invest their expertise and financial resources in mission-driven nonprofits to achieve sustainable, measurable impact.

Member Profile: Adam Fahrer, GreenShoot Capital Management

A numbers and finance guy, Adam Fahrer spent 20 years working on Wall Street. After the Great Recession of 2008, Fahrer said the work/quality of life dynamic changed dramatically for the worse.

Fahrer and his family had been vacationing at the Isle of Palms for years. They loved the Charleston area and began to consider making the move south. “We decided to flip the script and choose where we wanted to live instead of having it dictated by job location,” he said.

So in 2014, Fahrer and his family left the rat race of the Northeast and relocated to Mount Pleasant. Settled in his new home, Fahrer began to think about his next professional venture.

Four years ago, Fahrer partnered with Carl Yost to form GreenShoot Capital Management, making long-term investments in small and medium-sized businesses mostly in the South and Southeast.

Fahrer said they made the conscious decision to acquire small, profitable companies versus investing in startups.

“With a startup, there’s a high probability of losing all your money. It’s risky. It’s boom or bust,” Fahrer said. “That’s not the right risk-reward profile for us.”

GreenShoot Capital Management often works with baby boomers who have successful businesses but no succession plan. “There are a lot of quality businesses in that opportunity set,” Fahrer said.

Typically the company can make back its investment in three to four years.

As they launched GreenShoot Capital, Fahrer said they were meeting a lot of like-minded Charleston transplants who were also looking for what’s next. They were too young to retire, had a wide array of impressive professional skill sets, and capital to invest.. So GreenShoot added seven operating partners who bring their expertise to the table when the need arises.

GreenShoot Capital currently has three companies in its portfolio. The process of acquiring a business takes time and centers on trust.,Fahrer said. The market for these companies is neither efficient nor liquid, which we believe lends itself to the idea of permanent capital, buying without ever intending to sell.

Once it acquires a business, GreenShoot uses its expertise to improve aspects of the business, stepping in to help run the company and increase its profitability.

“We’re not interested in being passive,” Fahrer said. “We want to leverage our skill sets and at minimum be an active board member.

Fahrer calls GreenShoot’s work “acquisitional entrepreneurship.”

“For us, it’s more about taking something that exists and making it better,” he said. “I’m not very good at creating something that doesn’t exist, but I can look and see how to make something better.”

Fahrer is a self-described “investor at heart.”

“I like the process of finding an attractive investment,” he said. “Vetting a company is similar to finding a stock to buy. You figure out scenarios, research and analyze the probability of different outcomes.”

GreenShoot Capital isn’t focused on one specific industry, opting to work with companies in business services, manufacturing, hospitality, health care services and the automotive industry. The biggest consideration is whether the company is profitable and, secondly, if there is a competitive advantage.

Fahrer said for GreenShoot, the deal pipeline is organic. They don’t actively solicit companies, but instead rely on relationships with those who might be able to introduce them to a business owner looking to sell.

Charleston Deal Alliance is an important conduit for those connections as well as finding capital partners interested in working with GreenShoot on larger deals.

“Right now we fund deals with proprietary capital but realize we could probably have the same impact on a company three times the size by taking on outside funding.,” Fahrer said. “My time commitment is the same so it makes more sense to do it on a larger scale. We lose some control of ownership, but assuming it works, there are bigger gains to have.”

Adam Fahrer
Chairman & CIO, GreenShoot Capital Management
adam@greenshootcm.com | 203-295-1789
www.greenshootcm.com

Member Profile: Bob Kosian, The Capital Solutions Group

Here’s the Deal on Bob Kosian

Favorite time of the day: 10:30 a.m. when Kosian goes to his gym, Longevity Fitness on Rutledge Avenue. He leaves his phone at home and focuses on his workout.

Best business book: “Bitcoin Billionaires” by Ben Mezrich

Productivity hack: Don’t spend too much time checking your phone and checking your email. Stay focused on the task at hand.

Community engagement: Former president of Penn Club of South Carolina; College of Charleston’s Language Cultures and World Affairs Advisory Board; founding member of the CDA

Member Profile: Bob Kosian, The Capital Solutions Group

From his downtown Charleston condo, Bob Kosian is helping private equity firms purchase companies they can develop, expand and then likely sell a few years down the road. The Capital Solutions Group — where Kosian is co-founder and managing director — is a full service debt advisory firm, working with private equity clients on deals from start to finish.

Since the company’s founding in 2009, they have advised on $3 billion in transactions, with the bulk of that business taking place east of the Mississippi River.

The company steps in to write a pitch deck and create five-year financial projections. They solicit term sheets from financial institutions and then select the bank or non-bank financial institution that will fund the deal. Kosian and his team even coordinate site visits so the new lenders can meet the management team and tour the facility.

“We take it all the way to the closing,” Kosian said.

Some clients are more hands on, but most prefer to leave the spreadsheets and financial research to The Capital Solutions Group. “It’s not usually worth their time to do debt financing,” Kosian said. “Their manpower is better spent on strategy and how to improve the company they are buying.”

Kosian has been playing the numbers game since earning an undergraduate economics degree from The Wharton School at the University of Pennsylvania. After graduation, Kosian worked in the controller’s office at the university, helping track grants and contracts. All of that work was done by hand back then, Kosian said.

Taking advantage of free tuition for university employees, Kosian earned his MBA and moved on to New York City. He worked for Citibank on Park Avenue for 20 years. Part of the company’s energy group, Kosian worked with some of the country’s biggest utility companies. One deal involved working on a nuclear power plant project and managing a one hundred bank syndicate. This project had him on the road to New Orleans every six weeks for five years and required a difficult conversation with a company chairman who ultimately retired.

“That was my first taste of the rough and tumble business world,” Kosian said.

And, yet, Kosian stuck with business and finance. After leaving Citibank, he spent five years working in London for the Head Sports Group where he helped lead its IPO. After 9-11, when Kosian and his family prepared to move back to the United States, they decided to forego New York City and retreat to Kiawah Island where they owned a home and often vacationed.

After some time on Kiawah, they bought a condo in Charleston where Kosian and his wife still live. Their grown daughter works for KPMG International and their son and his wife live in Boulder Colorado where they work in social media.

Kosian was instrumental in the creation of Charleston Deal Alliance and the effort to raise awareness about Charleston as a place for closing deals

“The CDA couldn’t have happened five years ago. There was no critical mass here,” said Kosian, a founding board member. “What really put Charleston on the map was Boeing, Volvo and Mercedes locating here. Those were the catalyst. It made Charleston a big enough place for people in tech and finance to realize there’s enough business activity that they could relocate here.”

Bob Kosian
Managing director, The Capital Solutions Group
bkosian@thecapitalsolutions.com | 843-814-9508
www.thecapitalsolutions.com