Skin in the Game

Boxwood Partners is more than an investment bank. The business model: Buy profitable, growing businesses, move  their headquarters to Richmond and build executive teams that can add more value.

by James A. Bacon

It was big news in more ways than one when Boxwood Capital Partners announced earlier this month that it had acquired Coffee Wholesale USA, a Texas-based Internet distributor of coffee, teas and other drinks.

The transaction was Boxwood's first merchant banking deal. Richmond is loaded with investment bankers who make money from fees, but very few sink their own money into a venture, much less help run the company afterwards. By putting skin in the game, Boxwood brings a new dimension to the region's financial marketplace.

"Our goal is to become an old-school merchant bank" that both provides investment banking services and makes private-equity investments, says Pat Galleher, a managing director of Boxwood Partners and its affiliate Boxwood Capital Partners. His aspiration, he says, is "to grow the firm into a mini-Goldman [Sachs] or a mini-Greenhill here in Richmond." More.

Lightning Strikes Twice

Anderson & Strudwick has replicated its implausible feat of pulling off an Initial Public Offering for a China-based company -- this time, Sino-Global American, a shipping agency.

Anderson & Strudwick has done it again: The regional, Richmond-based investment firm has managed the Initial Public Offering of a Chinese company, Beijing-based Sino-Global America, on the NASDAQ. This is the second time the company has taken a Chinese company public.

Acting as lead placement agent for the offering of 1.2 million shares at $7.75, Anderson & Strudwick helped Sino-Global America, China’s leading non-state-owned shipping company, go public on May 21. The stock tripled in value within three days, topping out at $27 before many early investors began taking their profits.

In 2006 Anderson & Strudwick managed the IPO for eFuture, a firm also headquartered in Beijing. (See "Zhu's Big News.")

Sino-Global expects to receive $9.5 million for maximum net proceeds of $8.2 million -- the majority of which it intends to use to expand its business in 15 to 35 Chinese ports. The shipping company is investing heavily in expansion of its operations to capitalize on the country’s voracious demand for iron ore. It competes with the partially government-owned companies Penavico and Sinoagent which account for 85 percent of the market share for Chinese shipping agencies.

"After our success with eFuture, lining up investors for this initial public offering was a bit easier," said Mac Downs, senior vice president, who spent more than a year putting the deal together. "Sino-Global has a great story and strong financials to back it up." (R'Biz, May 29, 2008) More.

LandAmerica Restructures Title Insurance Delivery

Real estate services company introduces new business model in Colorado, centralizing data-driven functions in hubs and decentralizing account managers through a mobile workforce strategy. 

In its ongoing effort to drive down costs, LandAmerica Financial has introduced a lean operating structure for its title insurance, escrow and closing services in Colorado. The new business model, which the company describes as "revolutionary," aims to provide better service by technologically enabling its account managers to work out of home and provide more face-to-face service.

The traditional model relied upon outside sales reps and office-based escrow officers. Under the "New Frontier" initiative, LandAmerica combines the two functions into the role of account manager, centralizes data-driven functions into fulfillment centers or "hubs," and decentralizes the locations from which the account managers work.

"The new model provides customers with increased personal interaction with title and closing professionals and a single point of contact for answers to questions and resolution of issues," stated the company in a press release.

Account managers will work remotely from offices in their homes, connected to LandAmerica through a host of technology-enabled tools. Closings will be performed at various locations convenient for customers, including existing LandAmerica closing offices, Realtor offices and leased executive suites. "We are going where our customers are," says Lynn M. Riedel, an executive vice president for residential services, "and we'll perform closings wherever it suits them." (R'Biz, June 18, 2008) More.

Ramping Up in River City

Wachovia Securities has lost another 10 investment professionals to the upstart Riverfront Investment Group. The departure of the big brokerage firm to St. Louis is looking less disappointing by the day.
 

Another tranche of financial professionals from Wachovia Securities has jumped ship to work for a Richmond firm rather than relocate with the company to St. Louis.

Two months ago, four senior investment advisors with Wachovia Securities resigned from the company to launch the Riverfront Investment Group and provide portfolio investment services to financial firms around the country. Now the company has announced that the founders have been joined by 10 of their former Wachovia colleagues.

The newcomers to Riverfront Investment include portfolio managers, research analysts, relationship managers and portfolio administrators who collectively have over 140 years of experience in the financial services industry.

"We are very excited to be reunited with all of our teammates," said CEO Michael Jones. "While we've continued to work with this group every day for the past two months, the chemistry and camaraderie that drive our investment process are easiest to achieve when we're working side by side for the same firm. What is most exciting is that our team joins us as partners and fellow owners of Riverfront Investment Group." (R'Biz, June 3, 2008) More.

Investment Banking Transactions

Ewing Bemiss & Co. has secured a $21.5 million investment in a subsidiary of Henry County-based Multitrade Biomass Holdings, LLC, from Leaf Clean Energy Company to develop a wood waste-fired power plant in Rabun Gap, Ga. (July 24, 2008) More.

Harris Williams & Co. served as advisor to Hawker Beechcraft Corporation, of Wichita, Kans., in the sale of its Fuel and Line Service Operations to International Strategic Buyer BBA Aviation plc. (July 24, 2008) More.

Ewing Bemiss & Co. has secured the recapitalization of Distribution by Air, a New Jersey-based freight forwarding company, by an investor group organized by Ewing Bemiss. (July 22, 2008) More.

Ewing Bemiss & Co. served as financial advisor to Trio Clinical Research, a Durham, N.C., clinical research services company, in its recapitalization. (July 10, 2008) More.

Harris Williams & Co. advised the Riverside Company, a global private equity firm, in the sale of Universal Air Filter to Thompson Street Capital Partners. (June 30, 2008) More.

Matrix Capital Markets Group completed the sale of The Sharon Companies, LTD, an Akron, Ohio-based manufacturer of steel egress stair systems, to Worthington Integrated Building Systems. (June 9, 2008) More.

Cary Street Partners served as financial advisor to Optical Cable Corporation, a Roanoke manufacturer of fiber optic cable, for its acquisition of Superior Modular Products Incorporated (doing business as SMP Data Communications), a leading supplier of fiber optic and copper connectivity products for the data communications industry. (May 30, 2008) More.

Harris Williams & Co. served as financial advisor to GranQuartz Holdings, LLC, a distributor of stone fabrication tools and equipment, in its sale to Harbour Group.

(May 29, 2008) More.

Alpha Omega Capital Partners served as financial advisor to W.A. Sherman Co., Inc, a mechanical contractor based in Orange, Va., that provides heating, cooling, ventilation, electrical plumbing and ductwork services. More.

Business

Riverfront Investment Group, LLC, an investment advisory firm, has landed another client: LPL Financial. Headquartered in Boston, San Diego and Charlotte, LPL is one of the nation’s largest independent broker- dealers, with $289 billion of assets under management. (July 28, 2008) More.

Anderson & Strudwick, a Richmond-based brokerage and investment banking firm, has hired three experienced investment bankers who had formerly worked at Ferris, Baker Watts. Michael E. Mendelson, J. Matthew Carr and Clayton M. Jones together had been involved in more than 30 deals over the past three years that raised in excess of $4 billion. (July 14, 2008) More.

Anthem Blue Cross and Blue Shield in Virginia has launched Anthem Mobile Provider Finder, an online directory tool that will allow members to search for local, in-network doctors and hospitals through any Web-enabled cell phone or hand-held device. (July 10, 2008) More.

LandAmerica Financial Group, Inc., in its ongoing restructuring of operations to cut costs, has announced the merger of its Transnation Title Insurance Company subsidiary into its Lawyers Title Insurance Corporation subsidiary. (July 1, 2008) More.

Genworth Financial Inc. has unveiled an IRA variable annuity product that combines the traditional benefits of an IRA with the annuity's ability to provide a guaranteed income stream. (June 30, 2008) More.

Riverfront Investment Group lLC has won recognition from Raymond James, one of the nation's largest independent brokerages, as a “highly recommended” money manager. (June 24, 2008) More.

Max Specialty Insurance Company, an excess and surplus lines company, has added  California to the list of states where it can write surplus lines business, bringing the total to 47. (June 24, 2008) More.

Genworth Financial, Inc., has introduced a new, more flexible version of its flagship universal life insurance product -- Lifetime FlexPlus -- that combines the benefits of non-guaranteed cash values with a long- term secondary guarantee. (June 19, 2008) More.

Genworth Financial, Inc., has partnered with the state of Nebraska to help its citizens better prepare for their potential long-term care needs. The plan provides dollar-for- dollar asset protection for policyholders. (June 18, 2008) More.

Hilb Rogal & Hobbs has agreed to be acquired by the London-based Willis Group Holdings Ltd., in a 50/50, cash/stock deal valued at $2.1 billion, Willis said it expected the merger of HRH with its North American operations would deliver an estimated $140 million in "synergies," some of which will come through cost cutting. (June 8, 2008) More.

nHealth, a start-up insurance company founded by senior Richmond-area health care industry executives, is building its business model around using Health Savings Accounts to provide affordable medical coverage to small businesses in the region. (June 6, 2008) More.

Genworth Financial, Inc., has agreed to acquire CareScout, a provider of long-term care support, for $12.5 million. CareScout, based in Wellesley, Mass., helps families make informed, intelligent eldercare decisions, connecting them to appropriate providers through an extensive database on nursing homes, assisted living facilities and home care agencies. (May 30, 2008) More.

LandAmerica Financial Group, Inc., has received licensing approval for its Mexican subsidiary to operate as a title insurance underwriter in Mexico, making it one of only two U.S.-based title insurance companies licensed to do business there. (May 20, 2008) More.

Markel Corporation, a specialty insurance company, has rolled out a Manufactured Home Program to Indiana that purports to offer "the most competitive rates for manufactured homes on the market." The plan provides, among other things, golf cart protection. (May 16, 2008) More.

The C-Suite

Joseph F. Morris has been named president and CEO of James River Insurance Company and its affiliate James River Management Company, Inc. James River Insurance, an excess and surplus lines insurance company, employs 154 persons. (July 28, 2008) More.