Merchant banking firm expanding in Arena District
June 20, 2019
Lazear Capital Partners Ltd., a merchant banking firm catering to mid-market companies, is expanding to a 7,300-square-foot office on the second floor of 401 N. Front St.
The move represents a nearly 70% increase in square footage from its current home in the same building, and is a result of its growth.
The 20-year old firm, founded by partners Bruce Lazear, Michael Morosky and Ted Lape, now has a local staff of 15, including recently hired attorneys, CPAs, and executives with tax and transaction expertise.
“We’ve been growing like crazy,” Morosky said.
The company, which has sales offices in Cleveland and Detroit and wants to expand further. It’s considering additional sales offices in Atlanta, Cincinnati, Pittsburgh and Indianapolis. The new space in Columbus will give it breathing room to expand its staff further, though it doesn’t have definite hiring plans.
Lazear offers services including merger and acquisition advisory, turnaround advisory, corporate finance and litigation services.
It’s seen particular growth in conversions to employee stock ownership plans, or ESOPs, Morosky said. In five years, the firm has completed more than 40 major business transactions, half of them ESOP deals.
In an ESOP, the owner sells stock back to the company, which in turn allocates shares to employees. Once an employee retires or goes on disability, they’re able to cash out. It keeps the company privately owned but still meets the owners’ financial needs and provides a cash flow to the business.
And it’s mutually beneficial – employees’ stake in the company grows over time, helping with retention, while the company is also less likely to move as could happen if it’s bought by someone from out of town.
Still, Lazear Capital is agnostic to the kind of transactions it does, and having an adviser has helped business-owner clients make a move on selling their businesses. That’s something they are at times hesitant to do otherwise, Lape said.
“They’re often worried that selling to a competitor or private equity will mean a loss of jobs or that they’ll be put out of work,” he said. “Our message has resonated with people. When we talk to clients about potentially selling companies, they like the concept of selling to a third party or selling to employees.”
With the large volume of transactions coming with the retirement of the baby boomers, as well as the strong transaction prices in business sales of late, business owners are looking to exit sooner, Morosky said.
“We think people ought to know options before deciding what they’ll do,” Morosky said.