The small firm where deals get made

Investing

March 23, 1998|By Bill Atkinson

IN A ROWHOUSE on West Madison Street in Baltimore, a speck of a firm called Bengur Bryan & Co. is pumping out deals.

It is raising $25 million for a technology company, $10 million for entertainment software business, $6 million for an Internet news media company and $1.5 million for a rapidly growing Papa John's Pizza franchise in which it holds an ownership stake.

It is also selling a company that installs entertainment systems.

"We are seeing our business accelerate," said O. R. "Oz" Bengur, a founder of Bengur Bryan. "We have very strong deal flow."

Bengur Bryan is a boutique investment banking firm with 10 employees that specializes in mergers, acquisitions, raising capital and giving financial advice to executives.

Led by two former Alex. Brown Inc. investment bankers, Bengur and Charles A. Bryan, the firm targets small and midsize businesses that would typically be brushed aside by the industry's largest investment banking houses.

While the transactions are small, the firm provides a critical service: It helps keep the economy humming by brokering deals that match sellers with buyers, and investors with investment opportunities.

Since it opened in a basement apartment in Mount Washington seven years ago, Bengur Bryan has put together an impressive list of deals.

Last September, it sold Raven Software Corp. to Activision Inc., the Santa Monica, Calif., video game software maker, for more than $10 million. Raven, a small software company in Madison, Wis., was known for Hexen and Heretic, two highly acclaimed computer games.

A month later, Bengur Bryan dealt MasterPower Inc., a Westminster-based maker of hand-held industrial tools, to Houston-based Cooper Industries Inc. in a private transaction.

"They are very smart, they are very sophisticated, and they are very discreet," said Vincent A. Wolfington, chairman and chief executive of Carey International Inc., the Washington-based limousine and private car transportation company with operations in 65 countries.

He turned to Bengur Bryan in 1992 to raise $4 million in a private placement because the small investment banking firm would take the time to understand his business, he said.

"They actually did not only do their homework and understood the business, they were successful in identifying qualified investors," Wolfington said.

Al Wordsworth, former president and chief executive of MasterPower, put the company on the block when its main backers, Timonium-based Grotech Capital Group and Allied Capital Corp. of Washington, decided it was time to sell.

Grotech and Allied backed Wordsworth in a 1986 leveraged buyout of MasterPower, which at the time was a division of Black & Decker Corp.

Wordsworth interviewed a handful of investment banking firms, but picked Bengur Bryan to find a buyer and negotiate the sale because it had a "good feel for the marketplace."

"They were small enough that even a small deal like ours would have significance," Wordsworth said. "They did a good job for us. We ended up with an excellent package."

Leads for some of the deals have been funneled to Bengur Bryan from its former colleagues at BT Alex. Brown Inc.

Bengur headed Brown's energy group, and worked with oil service companies and gas and oil exploration concerns. Bryan ran Brown's transportation group, working with trucking, shipping and aviation companies.

But the energy group was scrapped, and transportation was restructured, so Bengur and Bryan left to start their own company.

"We had confidence in ourselves," Bryan said. "It was just a matter of whether we were going to be as successful independently as we would have been as part of another organization."

Besides mergers and acquisitions, and raising capital, Bengur and Bryan are trying their hand at merchant banking. They raised $1.1 million in 1995 to start and develop a Papa John's Pizza franchise in southern New Jersey with about 25 investors.

Bengur Bryan is part owner of a company called PJNJ Foods LLC, which owns 13 stores. It plans to add 20 stores over the next three years.

Bengur Bryan is also part owner of two Papa John's stores in Colorado, and it signed an agreement to open another four in popular ski areas. It also won a franchise for a dozen Papa John's stores in Pennsylvania.

"We think it is a good business," Bryan said. "We think it has a competitive advantage over the other pizza chains."

Since Bengur Bryan opened, it has added seven investment bankers to its staff. Bengur and Bryan see the firm growing to 20 or 30 employees, but not much larger.

"We don't see ourselves creating a bureaucracy," Bryan said. "We are in a hurry to be more successful, but not in a hurry to be a big company."

Pub Date: 3/23/98

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