In 2001, Tom Decosimo got a call from the owners in the Gulftel Communications Co. Co., in Foley, Ala., whose owners were excited about a $150 million offer from a private equity group wanting to buy the telephone company.
After one financial advisor confirmed the value of the offer, one of the owners suggested that they get a second opinion and the business hired Decosimo and his partner, Paul Cheney, to assess the business and offer a second opinion.
"We took the time to assess the value of the business, including a lot of off-balance assets, and our valuation said it was worth at least $250 million," Decosimo recalled.
When the company was put up for auction, it ultimately sold for $328 million - more than double what some owners of the company were initially glad to accept.
"I told my partner Paul, we know how to do this and we can help a lot of families and business owners who have spent their lifetimes building their companies make sure they get the best price," Decosimo said. "Our mission is to maximize value for family-owned companies."
So after spending years helping advise clients how to buy Coca-Cola bottling franchises and other businesses, Decosimo and Cheney agreed to also become sell-side brokers to help many mid-sized businesses ensure they get the best deal when they sell their operatons. Over the past three decades, Decosimo Corporate Finance has advised hundreds of businesses with deals collectively valued at more than $15 billion from the firm's offices in Chattanooga, Nashville and Cincinnati.
Decosimo recently launched a venture approach to extend DCF's expertise nationwide working with other experienced accountants from other CPA firms. DCF has signed up affiliate brokers in a handful of other major U.S. cities. Within five years, Decosimo hopes to build such affiliations with members of top CPA firms in 20 or more U.S. markets.
"These agents are trusted leaders in these communities and we're excited about working with them and showing them ways to help ensure their clients get the best valuations for the businesses when they sell," Decosimo said.
So far, DCF has affiliated with registered representatives at CPA firms in New York, Dallas, Houston, Detroit and Rochester. By affiliating with DCF, the business advisors are able to obtain the requisite licenses and methodologies to provide sell-side valuations and sales assistance for many middle-market companies. The accountants are continuing to work with their own firms but when business deals need sales-side advice, DCF will help provide the business valuations and auction approach to secure the best purchase offers.
Such sales-side help extends the CPA's tax, audit and other business services. Decosimo said the affiliation is proving especially popular with veteran CPAs eager to pursue higher-level financial work for their clients.
Building the business
Decosimo, who works with long-time partners Paul Cheney in Cincinnati and Charlie Gerber in Nashville, launched the business in the 1980s as a part of the accounting firm his father, Joseph Decosimo, helped start in Chattanooga in 1971. DCF principals are accredited senior appraisers by the American Society of Business Appraisers.
DCF broke off as a separate broker-dealer licensed business in 2009 from the Decosimo accounting firm. But Tom Decosimo remained a partner in his family's CPA firm until June 30 when he severed his ties with the CPA firm, which merged with South Carolina's biggest accounting firm in January to become Elliott Davis Decosimo.
The Decosimo legacy
Although he is splitting ties with the family accounting firm and locating to a new office at 819 Broad Street in Chattanooga, Tom Decosimo insists the business is an extension of the philosophy of his father who has sought to offer advice and counsel to his clients as well as audit and tax help. Over his 65-year career, Joe Decosimo has worked with some of the nation's top businesses and he remains a member of DCF's advisory board.
"We are very excited to build upon the legacy established by Joe Decosimo, who was a self-made, successful businessman with an unquenchable entrepreneurial spirit," Gerber said. "Through our affiliation program, we are going to have the ability to empower a new generation of investment banks from CPA firms across the country."
The firm is currently in the process of advising 13 sell-side transactions with companies whose total revenues are $430 million. Over the past 18 months, DCF has closed eight transactions totaling $241 million. Decosimo said its clients have included businesses in manufacturing, food and beverage, floor covering, mortgage services, food and beverage, oil and gas and others.
Major league deals
Over the years, Decosimo and Cheney worked with Cincinnati businessman Bill DeWitt Jr., as he acquired and then sold a variety of Coca-Cola bottling franchises, oil and gas ventures and professional baseball teams. DeWitt is now the primary owner of the St. Louis Cardinals, which DCF still advises and Decosimo accountants still serve as CPAs.
By working with DeWitt, DCF was also an early advisor to George W. Bush, who was partner with DeWitt in the 1980s in then a partner in Texas in a company known as Spectrum Oil and Gas. In 1989, DCF helped advise DeWitt, Bush and other investors in the purchase of the Texas Rangers baseball team for $86 million. Bush provided the Texas connections and residency needed for the purchase and he capitalized on that experience to help to become Texas governor and ultimately the 43rd president of the United States.
DCF has been the lead advisers in the successful acquisition of five Major League baseball franchises and two national hockey league teams.
"I like to say we bring major league experience to Main street," Decosimo said. "A privately-held or family-owned business has one chance to maximize the value of generations of work."
Decosimo says his firm's disciplined valuation process "is a tried-and-true formula that is tested and works" to secure the best price or deal for their clients.
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340