For Ben Brown, co-founder and managing partner of the Chattanooga private equity firm Alderman Enterprises, there wasn’t much time to celebrate reaching 10 years of buying and growing companies.
“Ten years did go fast, but to me, it’s hard to slow down and celebrate it,” Brown says. “Every day is just thinking about what we have to do to get better.”
Brown launched Alderman Enterprises in 2015 to purchase small-to-mid-sized companies in Chattanooga and help them grow while returning a profit to investors. He describes the company’s work as half investment and half operations.
Alderman Enterprises owns six companies, two in Chattanooga, after expanding beyond the Scenic City with the acquisition of Micro Metals in Jamestown, Tennessee in 2021. It owns three companies in Georgia, including Southern Industrial Fabrics in Rossville.
The companies range in revenue from around $8 million to $25 million and in headcount from around 22 employees to 120 employees. They are each trusted suppliers to other businesses, Brown says. While it has acquired companies outside Chattanooga, Alderman Enterprises still wants to be close.
“We’re pretty ‘hands-on’ with our companies,” Brown says. “We want to be able to drive there and back in a day.”
Alderman Enterprises has hired new CEOs for most of its companies. Its four full-time employees at the corporate office do not directly manage day-to-day operations at the companies. Across its portfolio, Alderman Enterprises has around 350 employees, Brown said.
The company changed its name from Alderman Holdings in 2020 as it brought all its deals under the same investment portfolio, rather than segmented investors for each acquisition.
The company is named for Edwin Alderman, the first president of the University of Virginia, where Brown and his two co-founders attended college. Its logo includes the wahoo fish, an unofficial UVA mascot. The other two co-founders, Jay Hildebrand and Andrew Kean, are no longer involved in the company.
SHARING OWNERSHIP
Amidst its successes, the firm has also been touched by tragedy. Chris Wright was a principal at Alderman Enterprises when he was shot and killed on Sept. 28, 2023, in downtown Chattanooga. Darryl Roberts was found guilty of second-degree murder in Wright’s killing and sentenced to 90 years in prison in August.
Brown initially did not comment publicly on the death of his business partner out of respect for his family, but says Wright touched every part of Alderman Enterprises in his three years there.
“Everything has his imprint on it,” Brown says. “There’s no way to overstate his impact on us and how lasting it will be.”
Alderman Enterprises was formed partly to capitalize on a coming wave of retirements by Baby Boomers, though many are waiting to retire.
“As a generation, Boomers love to work. They’re not trying to turn 65 and quit and go play golf every day,” Brown says. “The wave has not crested or broken yet, so we still see that as a big opportunity.”
The firm typically buys companies in their entirety, but gives some ownership stake to CEOs. It stands apart from some other private equity firms that focus on buying fast-growing companies and selling them soon after.
The companies it has bought have generally grown in headcount and revenue. Alderman Enterprises is not interested in buying health care or consumer-focused companies, Brown said. Its companies supply components to the railway, auto and power industries, to name a few.
“We want to buy things that we feel like we could own indefinitely,” he says.
Alderman Enterprises
* Founded: 2015
* Sector: Private equity in lower middle market
* Managing partners: Ben Brown and Jonathan Hartley
* Employees at owned companies: Around 350
* Portfolio: Bohr Electronics (Chattanooga), Combustion & Control Solutions (Chattanooga), Dynamix (Kennesaw, Georgia), Foam Tec Products Inc. (Suwanee, Georgia), Micro Metals (Jamestown, Tennessee) and Southern Industrial Fabrics (Rossville)
* Mission: Make long-term investments to grow profitable Southeast companies with trusted business-to-business products