Alex MazerAlex Mazer is a Vice President with Big Shoulders Capital and its affiliate, PPL Group, a private firm that provides liquidity solutions for commercial and industrial companies in turnaround/transition. Primary services include industrial asset disposition/liquidations, quick and creative asset-based debt refinancing, and equity investments in small and middle-market operating companies. Prior to joining them, Alex founded and managed The BirdDog Group, a national liquidation firm specializing in asset disposition of consumer goods and retail inventories for lenders, manufacturers, and importers. Outside of the U.S., Alex has lived and worked in Hong Kong and Beijing. He completed his MBA at Northwestern’s Kellogg School of Business.

Tell us about your pre-Big Shoulders Capital career and how it led you to do this work?

When I graduated, I moved to Beijing to continue studying Mandarin and explore professional opportunities. When I moved back to the US, I worked for a Chinese American owned consumer goods importer and helped them sell through obsolete, closeout inventories in North America and overseas. I ultimately started my own company doing wholesale and retail inventory liquidations. The wholesale market was quickly consolidating due to the effects of Amazon and Walmart (which has been a boon for the retail liquidation business). During this period, I started seeing industrial assets that banks and advisors needed to liquidate. Rather than act as a broker, I joined Big Shoulders Capital and affiliate PPL Group to provide more creative liquidity options for industrial businesses in turnaround/transition. Our companies provide capital in a variety of ways to help banks and business owners in distress.

What personal characteristics and strengths have supported your success in this industry?

Hustle, curiosity, and networking. When I worked for myself, my company was called The BirdDog Group because I have always hustled to find opportunities. Our business unfortunately has competition, so hustle contributes to my success and is part of our company culture now as well. We try to approach all opportunities with an open-minded, solution-oriented curiosity as opposed to some of our competitors who may have a single focus/product offering which may not be relevant or best suited to a prospective client. Lastly, I have found that creating close relationships with referral sources and partners is the best way to avoid overly competitive deals.

What is your greatest professional accomplishment?

We just wrapped up a one-year project with an aerospace machine shop. The company was overleveraged after taking on debt to buy equipment in anticipation of a contract with SpaceX. Unfortunately, not all the work came through and the business could not support the bank payments. We purchased all the equipment from the company and paid down the bank debt. As part of this agreement, the bank allowed the company six months to sell the real estate.

While we owned the equipment, we leased it back to the original owner for no cost which allowed him to keep his employees and continue operations with less financial burden. He found a buyer for the real estate who also partnered with him to retain a scaled-down machining business. This allowed the bank to get paid in full and avoided the bank’s pursuit of the guarantor’s personal residency

On an ongoing basis, we work hard to help support privately owned industrial companies to save jobs and navigate challenging times. For example, we bought a tool and die manufacturer and plastic injection molder in Ohio last year and saved 40 jobs. Our portfolio supports companies that employ over 1,000 people in the manufacturing, construction, and trucking industries.

Regarding most of your engagements, do you work as a team or do you handle things on your own?

It is a combination of both. Collaboration is a big part of our culture. Yet we are a lean group and very transactional and therefore individuals still drive their own deals. I actively coach our business development group which provides regular collaboration while allowing everyone to otherwise work independently. We also have an investment committee that votes on projects.

What is the biggest mistake you have made when working on a deal?

Specifically, not documenting significant (albeit unexpected) details in writing on the front-end. We were involved with a window-manufacturer in Kentucky. The widow owned the building and we had purchased the personal property from her. She neglected to tell me that she sold the building and the new landlord did not care about the understanding we had for occupancy.

What is the most interesting deal that you are working on today?

My colleague and I are working with a privately owned manufacturer who is in a dispute with a creditor that may put the company out of business. There is significant re-development value in its real estate and intellectual property. We think we can help this business owner resolve its secured creditor dispute by taking out the senior lender and partnering with the owner to sell the real estate, liquidate the machinery, and refocus on maximizing the IP in a go-forward, better-capitalized business.

How long have you been an M&A Source member and what do you get out of your membership?

Only about a year. We are not business brokers or M&A advisors but cross paths with them regularly. We value the perspective that M&A Source members have about the transactional marketplace between business buyers and sellers and the experience they have with business owners. This psychology of deal-making that M&A Source Members navigate daily is very relevant for what we do. BSC is another arrow in the quiver of M&A Source members who now have an outlet and solution for industrial clients and prospects in some distress which can include everything from business owners retiring with no succession plan, loss of primary customer(s), a dispute with partners, to judgments or struggles with banks or creditors.

As a seasoned asset-based lender and equity investor, what changes and trends do you see on the horizon that will impact on M&A?

Uncertainty. Whatever assumptions were in the proformas now must be altered. The debt markets are very tight right now. Outside of the SBA, I think most banks, particularly those focused on the lower-middle market are quiet. The impact of COVID will bring potential sellers to market earlier than they planned and perhaps with more urgency to sell. Advisors need to be prepared to address this in a realistic manner. The key to transactions may be more about speed, certainty, and creativity than about the highest price.

What advice would you give to M&A advisors who are working with distressed companies?

It is all about liquidity and action. When I spoke on the M&A Source podcast last month, I talked about using a 13-week cash flow as a tool for forecasting near-term liquidity and taking decisive action. For example, in these challenging times for the hospitality industry, the CEO of Airbnb meets with his board weekly to make three months of decisions. Business owners also must be totally transparent with you about their situation. If you have a deal that you cannot navigate a path forward, we will work with you to find a solution.

Please tell us something about yourself that has nothing to do with your M&A career.

I am recently married and grateful that we were able to celebrate with family and friends last year. My photo is from a trek in Uganda during our Honeymoon and you can see the gorillas perched behind us. I am an avid runner and have volunteered with Ronald McDonald House in Chicago since 2013.