• Josh McWhorter on Horton Outdoor’s Pending Capital Raise

    Last week the private equity firm McWhorter Capital Partners announced it was partnering with Bartow Street Capital to raise $150 million  for the continued expansion of Horton Outdoor.  The fundraising is anticipated to take 12-18 months.  Insider talked with McWhorter about the campaign.

    Josh, you’re seeking to raise the $150 million investment from accredited investors.  Explain to our readers what an accredited investor is.


    Thanks, Dave, for talking with me about the new raise. An accredited investor is defined as an individual with more than $200k of income annually the last two years ($300k if filing jointly) with the expectation of making at least the same moving forward. If an individual has a net worth of over $1M, he or she can also be considered as accredited. We expect to be working primarily with private entities and the rule there is fairly simple. The entity is accredited if it has more than $5M in assets & wasn’t organized solely for purchasing certain securities. Greenfield Advisors has a service that does all the leg work so we, MCP/Horton, can remain focused on growing the business.

    Insider has raised money from accredited investors to support his Billboard Loans Lending business.  A typical investment ranges from $50,000 to $250,000.  Do you anticipate this will be the same for you?

    Greenfield Advisors has had several other capital raises in other industries. Through those raises, they’ve met primarily with small to mid-sized family offices, hedge funds and private equity firms. Given who they’re speaking with, we’re looking primarily at investments of $10-20M & up on this particular raise.

    Horton Outdoor’s billboards are concentrated in Georgia and Alabama.  Where do you intend to put the new capital to work?

    Obviously, we like the two states you mentioned. Marshall Henderson, our president at Horton, is known by a good number of your subscribers I would imagine. He’s a good person first of all. Moreover, he has a vast knowledge of the business. The best part for me in leading the the fund is he’s conservative. When we look at potential deals, he just about always likes the deal less than I do. I think the question of “where” is a key issue of personnel. As many know, we named this company after Eric Horton following his sudden passing. Without him, I honestly wouldn’t have considered outdoor. Eric just happened to have a son, Hunter, who is the best. He can close deals all day long, but he honestly cares about his clients. It’s not about a sell to him, it’s about a mutually beneficial relationship. It shows. The best news is we feel like we may have found some other “Hunters.” We’ve added several new folks to our team in anticipation of the capital raise. Therefore, we’re not opposed to growing beyond our current footprint if the numbers make sense.

    Did you consider crowdfunding as an alternative to an accredited investor raise?

    No, I didn’t. I have a finance background so when we started McWhorter Capital Partners, I had a few family & friends that invested money with me. It did fairly well and we closed out our first fund and did a second small fund. Those early family & friends brought their family & friends. We closed it out and so on. This is a Christ-centered question for me because I took a lot of pride in my own ability to raise money for certain projects early on in my career so part of starting MCP was I couldn’t raise money – sounds crazy, I know, but I wanted this to be more about Him than I. Essentially, the “deal” I made with myself was I wouldn’t knock on doors for dollars, advertise publicly we were taking on investors, etc. If someone called or was referred in, I would speak to them & if there was a mutual interest, I would invite them in at that point. That is the very simple story of how we’ve grown so fast. It was a word of mouth deal. Oddly enough, Greenfield Advisors approached me about a year ago and asked if I had any interest. To be honest, I didn’t think we were ready and I didn’t believe we belonged in that kind of conversation. We spoke again around November & ended up a few months back proceeding after they did an evaluation of our current assets. First, I actually prayed about the decision as to whether or not this was right for us simply due to raising capital part of the equation. Second, we didn’t need the money. We’re a nobody in the grand scheme of things in the growing small town of Cartersville, which I love. That said, being unknown in a smaller town, we were profitable, content & the investors we had were generally satisfied.

    We’re really excited the decision was made to move forward with Greenfield. No doubt they’re great, extremely educated and well-known in the private equity world. We’ll see where this deal takes us and go from there.

     


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