Pallas Partners has been picking up more advising work on mergers and acquisitions in recent years, thanks to an improved economy.
This marks a bit of an evolution for the company, which had in the past been more focused on advising on turnaround plans and management changes.
It still provides those services but such work is more abundant during economic downturns.
Pallas recently provided transactional advising Malone Workforce Solutions, which completed two major acquisitions this year. It also advised on a couple of major transactions for V-Soft Consulting Group Inc., a Louisville-based technology staffing company, during the last few years.
Pallas managing partner and CEO Matthew Saltzman said the reason his company has been able to find such work is a matter of both its size and location in Louisville.
"We're bigger than the(competitors) that are just brokers that pull listings out there. And we're smaller than the major bankers who are going to charge huge fees," he said.
The fact that the company is in Louisville, based just off Westport Road, helps it keeps costs down.
"When I go and visit people in New York, I'm sitting in a conference room that costs more per month than my entire infrastructure does for a year," he said.
The lower overhead costs allows Pallas to remain affordable for small and mid-market companies who are looking for advisory services.
Pallas Partners has been around for 10 years now and has worked with clients in several states.
Saltzman describes the business as advising, rather than consulting. Instead of providing high-level thought on best practices as a consultant would, Saltzman takes a client's ideas and figures out a way to execute them.
For instance, if two companies are interested in a transaction together, "they say OK, let's do it," Saltzman said.
"Then they look at each other and say, what do we do next?"
That's the point at which Pallas usually gets involved. There's more on the business below.
Pallas makes its money with retainer fees and performance fees - depending on the work. Saltzman decline to give an exact number on revenue, but said it was "in the deep six figures" last year and there have been years in which it has been seven figures. The business has low overhead, which keeps the work lucrative and profitable, he said. Revenue is expected to grow in the next few years as a result of new business coming out of its satellite offices.
Roughly speaking, about 60 percent to 65 percent of Pallas Partner's business is providing advisory services on matters such as turnaround plans, management changes and finding capital.
They might work with a CEO on leadership or communicating with staff.
The remainder of the business is focused on the transactions mentioned above, including work on merges, acquisitions, succession plans and spinoffs.
This work on transactions is a growing business line for Pallas. In the last 10 years Pallas has been involved in about 15 to 20 deals, but most of those have been in the last 5 years.
The company has been involved in a couple of big deals this year- including two for Malone Workforce Solutions. We wrote about both of these this year.
Malone announced a deal with Omni-source Staffing, out of Lexington, in March. Then followed that up with a bigger acquisition of Schaumburg, Ill.-based AllStaff for an undisclosed amount earlier this month.
"We actually did(the Omnisource) transaction in the middle of this (AllStaff) transaction- which made this even more complicated,"Saltzman said."It was a very complex series of transactions."
Pallas also worked with Louisville-based V-Soft Consulting Group on its acquisition of MDT Technical earlier this year, and it's purchase of Safe Bridge Solutions before that.
The Sweet Spot
The company generally works with businesses that have revenue between $5 million and $50 million.
Where It's At
Pallas Partners main office is in Louisville, but it also has affiliates in Nashville, Tenn., and New York. These regional offices feed the company's business locally, allowing to have clients in multiple states.
It had a partner lined up in Cincinnati at one point, but the company never really got off the ground in the Queen City.