Ben Sutton’s back with investment fund
|“What’s really interesting is finding undeveloped or underdeveloped businesses that have the potential to grow.”
Sutton’s new private equity company, Teall Investments, has raised $65 million to acquire more than a dozen businesses, and while some of them have a base of business in college athletics, they’re not specifically related to the marketing and media giant he helped build at IMG College.
While Sutton isn’t ready to disclose his acquisitions, he’s focused on the creation of four verticals, within which he’s buying complementary companies.
One vertical will be the tailgate segment. Teall already has closed one deal to make a minority investment in Tailgate Guys, the Auburn, Ala., company that has deals with 16 universities, golf tournaments and the Atlanta Falcons and Atlanta United to provide tailgate setup and catering. In addition to Tailgate Guys, Teall is acquiring other smaller businesses that bring with them additional rights and services.
A second vertical is merchandise and ecommerce, which could put Teall in play in the college space as a manufacturer and retailer.
|Teall Investments has already closed a deal to take a minority stake in Tailgate Guys.
And the fourth is more of a one-off with a beverage company.
Teall, based in Winston-Salem, N.C., where Sutton based his former businesses, ISP Sports and IMG College, could expand into two or three more lines of business down the road, but for now Sutton is dialed in on these four areas. Sutton said there could be as many as 15 investments close in the coming months.
The companies’ earnings before interest, taxes, depreciation and amortization range from $3 million to more than $10 million, which he called the sweet spot for the firm’s investments.
“We’re going to be focused on growth, based on our experience and contacts,” Sutton said. “Sports, music, entertainment, that’s the premise of our fund. For us, it’s not about whether you got something for the cheapest price or you made these cuts to get to a certain bottom-line number. It’s much more top-line focused.”
The 59-year-old Sutton began raising capital a year ago by reaching out to people he’s met through the Young Professionals Organization, an executive leadership group whose members are CEOs and presidents. When he received favorable feedback on his idea to start a private equity fund last fall, Sutton stormed ahead with the fundraising process.
He named it Teall after the baseball saying “Touch ’em all.”
A year later he has commitments for $65 million, which includes some of his own money. Most investors — there are 40 of them — have pledged $1 million to $3 million. Sutton said he personally knows every one of them.
“What’s really interesting is finding undeveloped or underdeveloped businesses that have the potential to grow,” Sutton said.
The creation of Teall and the turnover of personnel at his former company, IMG College, also provided Sutton with the opportunity to bring many of his former co-workers on board at Teall. Six of the seven hires Sutton has made at Teall worked with him at both ISP Sports and IMG College. Three of them — Wes Day, Lou Doherty and Joe Weatherly — make up the senior team that evaluates investment opportunities. Sutton said they’ve examined 60 to 70 companies.
Day, the boyish-looking former BB&T banker, is the dealmaker. Sutton calls Day, a Wake Forest undergrad and Duke MBA, the smartest executive he’s ever worked with.
Doherty, former general counsel at ISP and IMG College, is now Teall’s general counsel.
Weatherly, Teall’s chief financial officer, followed the ISP-to-IMG-to-Teall trek as well.
|Tailgate Guys' clients include 16 universities.
Courtesy of: TAILGATE GUYS
Mark McKeen, who worked with Sutton at ISP Sports, oversees information technology.
Rex Hough, another former IMGer, is expected to join Teall soon; Sutton said another dozen hires could be made in the next three months.
“These are people who have built and operated businesses,” said Sutton, who called it “getting the band back together.”
Sutton first established his entrepreneurial roots in 1992 when he formed ISP, the collegiate media and marketing business. With the multimedia rights to some 50 colleges in 2010, he sold ISP to IMG for $100 million, and subsequently was named president of IMG’s college division by former owner Ted Forstmann.
After four years in that role and a change of ownership when WME acquired IMG, Sutton began to ease out of the business by becoming chairman emeritus. Eventually, Sutton and WME-IMG fully parted ways last year. He was not restricted by noncompete agreements, but Sutton opted not to go back into the collegiate multimedia rights business he’d been in for 25 years.
While some of the acquisitions by Teall are college-based businesses, they do not fall in the category of multimedia rights.
“To be honest, the college piece, it’s like I’ve already done it,” said Sutton, who says he’s always been inspired by author Jim Collins and his books “Good to Great” and “Built to Last.”
“I’d done multimedia, ticketing, seating for 20-some years. I’m not diminishing it, but I want to do something different.”