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Serving the state’s quiet wealth

The expansion of investment banking firm Chaffe & Associates from its base in New Orleans into Jackson in 2011 was a natural extension of its business that provides services in three main areas — valuations, merger and acquisitions and financial institutions.

Chaffe-and-Associates-logo_rgb“The New Orleans and Jackson markets are similar in that they are populated with private companies, and there are many multi-generation businesses,” said Vanessa Brown Claiborne, president of Chaffe & Associates.

“What we find in both Mississippi and Louisiana is quiet wealth. There are a lot of people who have grown their family businesses. They aren’t flashy. Another similarity between Louisiana and Mississippi is that their economies aren’t as volatile as the national economy.”

While there are other firms such as CPA companies that provide some similar services, Chaffe & Associates is unique to the state by virtue of being the only investment banking firm that offers a full line of corporate finance services. The company typically works as part of a team that includes the company’s attorney, CPA and the business owner’s financial adviser.

“Although our professionals hold designations such as CPA, CFA, JD, business valuation is not a sideline practice to us,” Claiborne said. “It’s our full-time business. Business valuations are done for numerous reasons including financial reporting, shareholder transactions and estate and gift tax valuations, which must be done by a qualified appraiser.

“In the sale of your business, the business owner is an expert in operating their business. Chaffe is an expert in selling businesses. Business owners need to keep their eye on the ball and not be distracted by the sales process. Chaffe has worldwide contacts to identify the best group of potential buyers of a business, be it a strategic buyer or a private equity group. And Chaffe professionals have the requisite securities licenses to handle these transactions.”

Almost all of their clients are private companies, many of them family owned. Claiborne said their referrals come from existing clients and from other professionals.

Hammond

Hammond

“We know that our work reflects on those referring parties and we take their trust very seriously,” she said. “What sets us apart is that our top-level professionals work on every assignment. There is no question that we are working only for our client and there are no conflicts of interest. Client confidentiality is of utmost importance to private business owners.”

John Hammond, vice president, who heads up the Jackson office, said the company brings a unique perspective to valuation of businesses because it is actively advising business owners about buying and selling businesses.

“We feel that our perspective in that arena gives us a good point of view on how to value a privately owned business,” Hammond said. “We’ve had a very good reception in Jackson since opening in 2011. We work with a number of local professionals who do estate planning, merger and acquisition work who have been really interested in knowing a local investment banker to help with valuations. It is a reputation-based business, and we have a very strong reputation for being experts in this field.”

Hammond said the economic downturn hasn’t caused a major decline in the need for their services; there a need for valuations no matter what the economy is doing.

“Valuations are not recession sensitive,” he said. “Valuations are needed in good times and bad. They are usually done for transition purposes. For example, one owner may want to buy out another owner and needs valuation to help with that transaction. Also, a lot of times when there are pullbacks in the economy, it sometimes causes companies to consider selling their business. We can assist in that process. Or, if companies determine there is opportunity for growth, we can help companies identify attractive acquisition targets.”

Hammond said he and other employees in the Jackson office are closely tied to the resources of the New Orleans office. Through the Internet, all of their company databases and resources are available

Chaffe & Associates often works with community banks in the state. Chaffe managing director Jon Briggs confines his practice to working with community banks to provide advice on regulatory matters for banks under regulatory orders and those who just need help with policies and processes such as revising loan policies, financial planning and budgeting. The second major area of his practice is mergers and acquisitions.

“Community banks are now in a position with more regulatory burdens and uncertainly about what is to come regarding regulatory burdens,” Briggs said. “They are in a position with increased costs and very little opportunity for growth. They are looking at strategic alternatives and some are deciding it might be time to buy smaller banks, or sell or merge with a large bank.”

Mississippi has seen more stability in banking than many states experienced during the economic downturn.

“In Mississippi, in particular, banks are pretty strong,” Briggs said. “They didn’t have a lot of trouble a lot of banks in Georgia and Nevada had. The banking industry in Mississippi is strong.”

The firm, founded in 1982, employs 23 people in both locations. Many of the employees have been working in the field more than 20 years.

“We love what we do, and we love working with family businesses,” Claiborne said.

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