GEORGIA OAK PARTNERS FEATURED ON GEORGIACEO.COM
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July 27, 2016 – Michael Lonergan is well aware of the challenges facing him when he approaches the owner of a company. “As a business owner, you’re likely to be as interested in talking to someone about buying your company as you would be in talking to a Michigan grad about the resurgence of Big 10 football,” he said with a laugh.
Lonergan is the managing partner of Georgia Oak Partners, a private equity firm he founded in 2010. Georgia Oak Partners has always been focused on investing in companies in the southeast, but has recently tailored their approach to focus their efforts on Georgia-based businesses. They’ve just launched a new website that makes this message clear. “Georgia On Our Minds” is the slogan appearing at the top of the page.
With a renewed interest in the state, Lonergan said the biggest challenge his team faces is getting that first meeting. “We have to get over those hurdles by warm introductions and relaying our track record. Often, being close-by means that we can easily meet once an owner wants to have an initial conversation. As Woody Allen said, ‘Showing up is 80 percent of life.’ So the first thing we need to do is be there when the time is right.”
Georgia Oak focuses especially on companies entering a phase of growth or transition. “We look to acquire companies from founders and make growth investments in really great Georgia companies,” Lonergan explained.
And Lonergan said the types of companies his team of partners look for are quite broad. “We aren’t industry specific–I’d say we are industry agnostic–so we look at different types of situations. Typically, there is a company that has a reason to grow.”
And the partners agree that Georgia Oak operates differently than typical investment firms.
“We took out a blank sheet of paper and crafted our approach with a business owner in mind (and asked) ‘What does he or she want in a partner?’” Lonergan said. “The result was Georgia Oak: we are local, invested for the long-term and (we are) hands-on partners. We are in the same backyard as our partner companies, so we can add more value in assessing opportunity and navigating risk. We also see great benefit in being able to have facetime with our partners on a consistent basis versus flying in for quarterly board meetings. It makes our relationships stronger and more productive.”
And Lonergan added that his past experience working in large investment firms in Miami and London taught him that some firms are better suited than others to work with traditional, family owned companies. That experience helped form the mission of Georgia Oak’s business plan.
“We felt that large, institutional equity funds are not always a great fit for many privately held companies here in Georgia. First, they often operate with a short-term mindset, which can sometimes promote cost-cutting as opposed to revenue growth. Second, most are unwilling to look at smaller businesses (with) under $75 million in revenue.”
As for the future, this recent refocusing is meant to grow the firm’s portfolio by making investments throughout the state with an emphasis “on the great things happening in Savannah, Augusta and Columbus. …Right now we are mostly in Atlanta and Athens. We want to make investments in opportunity and that growth zone … with two to four investments per year throughout the next three years,” Lonergan said.
“We are looking to invest in mature, established companies that can take it to another level with more expertise and more capital.”
And while capital size, numbers, business growth models and details like that can make some people’s eyes gloss over, you can’t help but feel the excitement of investing in Georgia’s economy when you hear the enthusiasm in Lonergan as he discusses the future of the firm.
“A great day for us includes meeting a business owner for the first time because that experience captures everything we are about,” Lonergan said. “We are here, we are hungry, we are long term and it’s all oozing out of everyone’s pores when we meet for the first time.”
Lonergan and his partners also agree that part of the excitement is calming the nerves of a potential partner during that first meeting.
“The biggest concern that owners have is the fear of the unknown and of the next chapter,” Lonergan said. “So a conversation with a buyer like us represents that next chapter. … We often see that apprehension from someone who spent 20, 40 or 50 years building their business and they are anxious about meeting with someone about the future.
“The way we soften that is by being local, having a track record with companies that people can talk to and meet and learn from and relaying our long term investment horizon.”
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