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Selling a business? They can help

March 13, 2013

Dominion Partners Founders

BY JACOB GEIGER

It’s been 17 years since Charles Moncure and Frederick Naschold left the world of mid-sized investment banks to start their own firm, Dominion Partners.

Two recessions and three bull markets later, the pair continues to serve local clients looking to buy and sell businesses or raise capital.

“At a big firm, there’s a hierarchy with lots of layers,” Moncure said. “With us, there is no hierarchy. Rick or I do every deal.”

Small investment banks — “boutiques” in banking lingo — often specialize in a few sectors of the market. But Dominion Partners works with all types of companies, from construction materials firms to C.F. Sauer. What separates the company from larger investment banks, Moncure said, is that nearly all clients are privately held.

“It’s rare for us to have a client with audited financial statements, so we have to dig deeper in [financial documents],” he said. “We also often have to separate an owner’s business and personal finances before a sale. … Sometimes smaller deals are slower and more difficult because it’s just not as clean.”

The largest deal brokered by Dominion Partners was $72 million, though most M&A deals or capital transactions they work on fall between $5 million and $15 million.

Naschold said either he or Moncure takes the lead on a deal, but the pair often works in harness on bigger deals. They are supported by analyst Greg Meleski.

“People are really important in deals this size,” Naschold said. “Understanding what each party needs to make it work and to solve the problems gives this more of a qualitative aspect. And in a family business, there are a lot of emotions when a business is being sold. You’re not as removed from the process, and we have to be sensitive to that.”

Moncure said owners of small businesses need to start planning long before any sale. Owners often have the business and sales contacts that keep a company in the black, and new owners don’t want to lose those connections.

“The mistake people make is waiting until they’re 65 to sell,” he said. “Then the buyer wants to tie the old owner in for a few years after the deal. So we tell owners to build a management team who can run the business without them. People who are the business find it hard to sell.”

Mergers slowed during the recession, he said, with the partners spending more time helping companies raise money. But as the values of businesses rebound and as Baby Boomers eye retirement, Moncure said he expects a spike in deal volume.

Most of Dominion Partners’ clients come from referrals, usually from attorneys, bankers, accountants and past clients. About 70 percent of the company’s clients are in central Virginia.

Moncure said a few simple principles keep referrals coming as the region’s economic fortunes wax and wane.

“The mistake a lot of [bankers] make is they inflate a valuation to get hired,” he said. “You always get what a business is worth, not what you’ve said, and then you’ve burned a referral. Our sources think we shoot straight, with integrity. We tell the truth.”

Jacob Geiger director of Work It, Richmond. He can be reached at jgeiger@workitrichmond.com or (804) 649-6874.

© 2013 Work It, Richmond. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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