M&A process gets personal

Investment bankers almost always work deals for other companies.

But local investment banking firms Transact Capital Partners and Alpha Omega Capital Partners were the buyer and seller in their own deal.

Transact Capital acquired Alpha Omega, the firms announced Monday, creating an investment-banking firm with 12 employees and offices in Richmond, Orlando and Lexington, Ky. The combined firm, which was renamed Transact AOCP Inc., will go after deals for companies whose revenues are between $1 million and $50 million.

The price of the deal was not disclosed, but Steve Zacharias, founder of Transact Capital and managing partner of the combined firm, said it involved money up front and revenue sharing on pending deals that the group from Alpha Omega closes.

The deal came about after Alpha Omega founder and President Tony Vincent decided he wanted out of the day-to-day management of the firm.

“I’m 65 years old this year, and I’d always planned to step aside as far as management when I reached that age,” said Vincent, who is staying on as managing director and will continue to work with clients.

The economy was a factor as well.

Founded in 1999, Alpha Omega peaked between 2004 and 2007, Vincent said, and has since seen its deal flow and its employee count decline.

“Going through the difficult times with the economy, I’ve had several partners either retire and/or leave when times were tough,” he said. “There really just wasn’t anybody to step up and take the company to the next level after me.”

At its peak, Alpha Omega was dong 15 to 16 deals a year. It’s had three closings in 2011, Vincent said.

Transact Capital, on the other hand, had its best year ever in 2010, Zacharias said, giving the firm confidence to do the deal.

Alpha Omega has historically been the larger of the two and has typically closed bigger deals.

Vincent broached the subject of combining the two firms through an even merger last year. But Zacharias, who founded Transact Capital in 2001, didn’t bite until Vincent came back with an offer to sell Alpha Omega outright.

“I built the business to this point,” Zacharias said. “I had a path I wanted to go down. I wasn’t interested in splitting up the ownership.”

The purchase of Omega was self-financed, said Zacharias, a former treasurer at Media General.

And the acquisition was an amicable one.

“Quite honestly, it was a very easy, friendly negotiation. Tony was motivated to make it happen, and I saw it as an opportunity to become a much larger operation,” said Zacharias, 61.

The combined firm will operate out of Transact’s headquarters in the Boulders office park in Chesterfield. Alpha Omega already vacated its office in the West End.

Five employees came over from Alpha Omega, including three from its Richmond office and two from its Kentucky and Orlando locations.

Transact historically has sought out deals in Virginia, while Alpha Omega has gone after deals across the country.

Vincent said the combined firm will look to expand its presence further as deal flow picks up, potentially with offices in places such as Atlanta, Charlotte, St. Louis and Cleveland.

Michael Schwartz is a BizSense reporter and covers the local financial services industry. Please send news tips to [email protected]

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