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BNC Corporate Finance Advisors

Have you planned for the future of your business? Whether you are looking to expand your business through acquisition or position your company to sell, BNC Corporate Finance Advisors have the solutions to help you maximize shareholder value. The investment banking professionals at Bank of North Carolina have served in advisory roles for a broad range of deals across a wide array of industries.

Bank of North Carolina, through its experienced professionals, offers the following corporate finance services for middle market companies with sales between $5 million to $100 million:

Most successful business owners have been approached about selling their business at least once. Yet, to maximize shareholder value, selling to the unsolicited bidder usually will not yield the highest price. After years of building a successful business it seems unwise not to invest the time and effort to discover what the full range of options are to maximize shareholder value. You will only sell your business once so it is important that you do it right. Bank of North Carolina's experienced Corporate Finance Advisors use a disciplined approach to selling businesses which results in maximizing shareholder value.

This approach begins with understanding the business, its products and services, markets, competition, industry, growth opportunities, management, ownership, and risks. Based on this analysis a range of values and most likely exit outcomes are examined. Discussing these findings with the shareholders will result in a plan of action that fits the needs and desires of the shareholders.

If a sell transaction is the decision, BNC Corporate Finance Advisors will put together a comprehensive information memorandum that puts the company's information in a factual but favorable light. An exhaustive list of potential buyers is presented to the seller for permission to contact on a confidential basis. The potential buyers are only permitted to see high level information without disclosing the business name to determine if they are interested enough to sign a confidentiality agreement.

After signing such an agreement, interested parties are sent the entire information memorandum. All parties receiving the memorandum are given a period of time to review the material, ask questions, and submit a letter of intent indicating their offer for the business. After reviewing the information, asking for clarification, and analyzing the numbers, the offers are presented to the seller. Through additional negotiations with the top bidders the seller selects on an offer that provides for not only the highest price but the best terms and conditions for the seller. Once a letter of intent is signed with the chosen buyer, due diligence is completed and a Purchase Agreement is negotiated and signed. BNC professionals coordinate the closing process including the attorney, accountant, consultants and regulatory issues to ensure a successful sale. The whole process can take 60 to 180 days from start to finish.

Often business owners find themselves in a position such that it is better to grow the business through acquiring than grow internally. In these situations it is important to have a well-defined strategy for these target acquisitions. Since most business owners are not experts in mergers and acquisitions, it is important to hire professionals that can avoid the pitfalls that exist in this process. It is difficult for the business owner to be as tough a negotiator as is warranted knowing that the existing owner's cooperation is necessary to a smooth transition.

Therefore, it is often preferable to have an outside investment banker play that role. In addition, in an industry with few competitors, it is important to keep confidentiality about who is an acquirer. The investment banker can find potential sellers without disclosing who the buyer is until confidentiality agreements are signed and there is strong indication that the company might sell.

BNC Corporate Finance Advisors will work closely with you to assess your ability to acquire companies and develop a plan to pursue targets. Once a plan is agreed upon, we will contact targets on a confidential basis to promote a compelling rationale for a transaction. After finding a willing target we will evaluate the business value, synergies, and risks, helping you structure the transaction. We will also help determine the best source of financing for the transaction.

The difference between any acquisition of a business and a leverage buyout is that the buyers are existing employees of the company. The buyers, having a vast knowledge of the business, will now have a greater investment opportunity in the business which can lead to greater returns. Management teams often do not have the capital to buy the business outright. BNC Corporate Finance Advisors are able to assist in finding the appropriate financing options and structuring the transaction.

Sometime business owners find that they aren't ready to sell but they would like to take some money out of their business to diversify their equity holdings. A leveraged recapitalization allows the owner to repurchase shares of the company in exchange for leveraging the company with some form of debt. Such a restructure can provide liquidity for shareholders and it can also allow other existing shareholders to exit the investment completely.

In other cases, a minority investor may want to gain control of a company through a leveraged buyout. A leveraged buyout allows an investor to buy more shares of a company and gain a majority stake in that business with debt on the company's balance sheet. The investor would now have majority control of the business.

As a bank, the professionals of Bank of North Carolina are uniquely qualified to understand the debt markets and the structural requirements to ensure a successful placement. Senior debt transactions can be structured with the bank and/or syndicated with a network of banks to accomplish any size facility.

Often a company has growth opportunities that exceed its senior debt capacity, but that will provide excellent long-term cash flow and shareholder value, or a business owner may want to diversify the concentrated risk of stock in the private company with a partial liquidity transaction. Both of these needs can be met with subordinated debt.

Subordinated debentures, or mezzanine debt as it is sometimes called, are typically subordinated to senior debt with interest only payments at higher interest rates and with warrants attached. There are numerous sub-debt funds that seek to fund companies in certain industries. BNC Corporate Finance Advisors will prepare a detailed information memorandum, identify the appropriate mezzanine funds, solicit their interest in the transaction, and negotiate with each party to find the most suitable lender. Once a commitment letter with a mezzanine fund has been signed, BNC professionals will handle the coordination of closing and seek to resolve issues as they may arise.
Private placements of equity are made by groups of private equity funds specifically set up for investing in existing businesses. These investment groups are willing to work closely with the existing business owners to improve the prospects of their investment and the future of the company in which they are investing. BNC professionals offer these placement services a referral to a through well-established Wall Street firm that specialize in private placements of equity.

The true value of any business is the price a willing buyer and a willing seller agree to, provided that neither party is under any compulsory need to do so. This is why the highest value for a business can be obtained through the process of creating an auction with multiple interested parties. In order to know beforehand that you are in the right range of values when pursuing a sell or purchase, a formal business valuation can frame the expectations. Each industry has its own multiples or norms for calculating value although there are numerous factors that need to be taken into consideration. Historical performance, growth opportunities, market position, industry risks, management quality, and owner compensation are a few of the factors that need to be taken into consideration in valuing a business.

BNC Corporate Finance Advisors have valued numerous businesses in many different industries and are fully qualified to provide business valuations. They combine a strong understanding of financial theory, in-depth industry knowledge, experience in capital markets, and the ability to identify and quantify significant off-balance sheet assets and liabilities. These abilities help ensure that you get an expert valuation whether it is for a sale, purchase, buy-sell agreement, or recapitalization.

Through relationships with direct CMBS lenders and insurance companies, BNC Corporate Finance Advisors can provide access to the permanent commercial real estate market. BNC professionals are experienced in financing and refinancing through placement to the CMBS market. The attraction of the permanent market for commercial mortgages is the non-recourse feature plus long-term amortization.

BNC Corporate Finance Advisors

Donald R. Draughon, Jr. - Executive Vice PresidentDonald R. Draughon, Jr. – Executive Vice President

Mr. Draughon has been in investment banking for over 20 years. Previous to Bank of North Carolina, Mr. Draughon founded and lead KeySource Commercial Bank as President and CEO. Prior to KeySource, Mr. Draughon was Managing Director / Senior Vice President for Anderson & Strudwick, Inc., a full service brokerage firm headquartered in Richmond, VA. Mr. Draughon also previously served on the Board of Directors for Smith River Community Bank in Martinsville, VA and Millennia Community Bank in Greenville, NC. Prior to Anderson & Strudwick, Mr. Draughon was the Chairman and CEO of Convenience USA, Inc., an operator of over 250 convenience stores, from 1998 to 2002. During the mid-1990s, Mr. Draughon was a Managing Director with the investment banking firm of Baxter Fentriss. From 1989 to 1993, Mr. Draughon was Senior Financial Analyst for Montrose Capital, a merchant banking group. Mr. Draughon began his career in banking with Wachovia Bank from 1984 to 1989 as an Assistant Vice President in the Corporate Finance Group. Mr. Draughon received an MBA from Wake Forest University's Babcock School of Management in 1984 and a BA from Brigham Young University in 1982.

W. John Fedora - Managing DirectorW. John Fedora – Managing Director

Mr. Fedora, Managing Director with Bank of North Carolina, has been providing investment banking services to middle-market companies for over 20 years. For the fifteen years prior to joining Bank of North Carolina, he was a Managing Director with Ironwood Partners and had previously held the same position with Matrix Capital Markets Group. Mr. Fedora co-founded and served as Vice President, Treasurer, and a principal owner of a wholesale upholstery fabric company. He was the Regional Manager for North and South Carolina with the Commercial Finance Division of Textron Financial Corporation, specializing in equipment financing and tax-oriented leasing. Mr. Fedora was Chairman of the Boards of Trustees of Carolina Medicorp, Inc. of Winston-Salem, NC and Forsyth Medical Center, its tertiary care, flagship hospital. He served on the merger committee that led to the creation of Novant Health, Inc., a multibillion dollar healthcare corporation formed by the merger of Carolina Medicorp and Presbyterian Healthcare of Charlotte, NC. Mr. Fedora has an MBA from the Fuqua School of Business at Duke University, where he was a Fuqua Scholar, and a BA from Wake Forest University.

Benjamin A. Ricks - Financial AnalystBenjamin A. Ricks – Financial Analyst

Mr. Ricks is responsible for conducting company and industry analysis, doing buyer research, and preparing memorandums for the sale of companies and private placements. He began his career at the Royal Bank of Scotland where he helped streamline their global foreign exchange process. He had college internships as a bond analyst at Beneficial Financial in Salt Lake City, UT, an accounting analyst at Aramark in Page, AZ, and a systems analyst at KeySource Commercial Bank. He received a BS degree in Business with an emphasis in Finance from the Marriott School of Management at Brigham Young University. He is skilled in financial analysis and is fluent in Spanish.

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Sell-Side Representation Buy-Side Representation Placement to Permanent Real Estate Market Business Valuation Private Placement of Debt and Equity Recapitalization Management Buyout