Statewide: Charlotte region, March 2015

 In 2015-03

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Cult following

Hugh McColl Jr. and Marc Oken, whose dealmaking prowess helped build Bank of America, scored a triple on their most recent private-equity sale. Their first Falfurrias Capital Partners fund raised $97 million in 2007, and they bought controlling stakes in six companies over the next four years. In January, they sold the last of those investments, a 55% stake in Richmond, Va.-based investment research firm Dorsey, Wright & Associates, to New York-based Nasdaq OMX. Nasdaq paid $225 million, and Falfurrias earned 3.6 times its investment, or a 47% annual internal return, according to an investor who asked to remain anonymous. Co-founder Tommy Dorsey says that everyone involved is pleased, including his company’s 25 employees, who shared in the gain. Falfurrias was attracted to Dorsey Wright because of its cultlike following among financial advisers. “It’s like Bojangles’,” Oken says, referring to the Charlotte-based fried-chicken chain that Falfurrias owned from 2007 to 2011. Dorsey and Watson Wright started selling their stock-picking recommendations in 1987 based on a strictly quantitative system that compares how stocks are acting relative to each other. Dorsey Wright then recommends a handful of best performers, a strategy that has consistently exceeded benchmark indices. The company still gets half of its revenue from selling research, but its growth stems from fees received from exchange-traded funds that use the strategy. “We just happened to be there when the ETF business exploded,” Dorsey says, referring to the funds that track indexes and trade like stocks. “Very few game-changing things happen in financial services, but ETFs are one of those.”

Dorsey says he and McColl “talked a lot about QTL – quality time left – which is important because I’m 67 and he’s in his late 70s.”

When Wright had health problems, he and Dorsey put the company up for sale. He chose Falfurrias over other bidders in 2011 partly because of McColl’s Marine and Oken’s Navy backgrounds. “Their military service spoke volumes to me,” Dorsey says. Falfurrias promised not to mess with Dorsey Wright’s unusual office culture in Richmond, where employees cluster in a large, open oval area. “We stay in communication all day long, and we very rarely go behind closed doors,” Dorsey says. Falfurrias helped recruit a business manager to improve Dorsey Wright’s financial reporting, a required step for an eventual sale. Previously, their idea of accounting was simple: If the checkbook balance was rising, good. If not, bad, Dorsey says. Having McColl and Oken involved, with their bevy of financial-industry contacts, raised the company’s profile as it inked deals with companies that sell ETFs. “Falfurrias helped us think big.” Dorsey says he will miss monthly lunches with McColl. “We talked a lot about QTL — quality time left — which is important because I’m 67 and he’s in his late 70s. [McColl will turn 80 in June.] Being with Hugh was a tremendous educational  process for me.” Falfurrias hopes to duplicate its success buying companies with its second fund, which raised $127 million in 2013. 


Briefs

HICKORYCommScope Holding will acquire three business units of Switzerland-based TE Connectivity for about $3 billion in cash. The telecommunications company, which employs 1,200 in North Carolina, will gain 10,000 employees at 65 locations when the deal closes, which is expected by year-end.

CHARLOTTE — Tokyo-based Toshiba named Ali Azad CEO of Toshiba America Energy Systems, a new subsidiary based here that will begin operations April 1 and employ about 500 people. A veteran of the Charlotte energy industry, he was president of Plymouth, Mass.-based BHI Energy since 2013 and worked for Babcock & Wilcox and Duke Energy.

MATTHEWS — Shareholders of Family Dollar Stores approved the discount retailer’s proposed sale to Chesapeake, Va.-based Dollar Tree. Pending regulatory approval, the $8.7 billion deal is expected to close as soon as April. Family Dollar operates 8,000 stores in 46 states and employs 50,000 people, including more than 4,500 in North Carolina. Dollar Tree operates nearly 5,300 stores in 48 states and Canada.

CHARLOTTECarolina Premier Bank named David Barksdale president and CEO. He was senior executive vice president of Greensboro-based NewBridge Bank since 2008 and its chief strategy officer since 2013. Barksdale replaces Caryn Johnson, who held the role in the interim since John Kreighbaum resigned in August. Washington, D.C.-based Premara Financial, holding company for the community bank based here, operates seven branches in the Carolinas and the District of Columbia.

CHARLOTTEDuke Energy acquired a majority interest in REC Solar for an undisclosed amount and plans to invest up to $225 million in commercial solar projects developed by the San Luis Obispo, Calif.-based company. REC Solar has installed more than 440 commercial solar systems nationwide, including large-scale utility projects and rooftop arrays for businesses such as Costco and Ikea.

CHARLOTTE — Billy Moore will become chief financial officer of Chicago-based Grant Thornton on Aug. 1, replacing Russ Wieman, who is retiring. Moore, 62, is the professional standards partner for the accounting firm’s Carolinas practice, which has offices in Charlotte, Raleigh and Columbia, S.C. Mike McGuire, who was based in Charlotte, assumed the role of CEO Jan. 1.

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