Evolving market conditions create opening for new investment bank
Former BB&T bankers launch Bluestone Capital Partners to serve mid-market
- By Nick Wakeman
- Feb 25, 2011
Between them John Allen and Susan Gabay have nearly 30 years of experience closing deals in the government market.
The long-time colleagues at BB&T Capital Markets/Windsor Group recently left that firm to launch their own venture, Bluestone Capital Partners, because they saw an opportunity for an investment bank that can offer a different level of service to clients.
"The market is shifting and there’s need for a new model that is better equipped to advise companies in this less predictable environment we are in," said Allen, a former columnist for Washington Technology.
The firm will focus on middle market companies and many of these are run by company founders who may only do one or two sales in their lives, Gabay said.
“We want to be much more proactive about helping them years before they contemplate doing a transaction,” she said. “We want to help them plan years in the future to help them build their business and position them for an eventual exit.”
The market has been through periods of tightening budgets in the past, but this time is different than the peace dividend days of the 1990s, Allen said.
“There is still a tremendous opportunity to create value through mergers and acquisitions, but you have to be much more enlightened about where those opportunities are going to be,” Allen said.
The government contracting industry is much healthier today than during the 1990s, he said.
For one, companies are carrying less debt and have more cash today than they did then. “Companies are much better managed and better prepared for a tighter budget environment,” Allen said.
As part of their plan to offer more services to their clients, Bluestone Capital has brought on Chris Taylor, former president of VT Group’s technical services business. Before that assignment, he ran their corporate strategy and mergers and acquisitions practice.
“I’ve had a number of different roles: strategy, corporate M&A, corporate finance and general management, so this is a way for me to use all of those experiences to help our clients,” Taylor said.
The market is facing different conditions than it has during the last decade, including greater regulatory and compliance requirements, such as small business rules, organizational conflicts of interest and reporting requirements, he said.
“For companies in the middle market, there [are] a lot of moving parts that need to be taken into consideration,” Taylor said.
The company also has brought on board Mike Ivey, former vice president of finance at Anteon International Corp. and most recently vice president of finance at NetStar-1.
“He’s been a senior financial executive at companies that were either preparing for a sale or were making acquisitions, so he brings a much more operationally oriented view of M&As to our team,” Allen said.
Bluestone, based in McLean, Va., has about 10 people on staff currently. They’ve already closed one deal, KEYW Corp.’s acquisition of Everest Technology Solutions., which closed in December. KEYW was picked as one of the top dealmakers of the year by Washington Technology.
Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.