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CIBC’s Commercial Banking podcast series, Conversations in Commercial Banking, understands that your business is a living, breathing entity in need of nurturing to continue to grow. Whether you’re looking to navigate a tough economy, tap into current industry trends or identify key tools to take you to the next level, our team of experts are here to equip you with the information you need to make your vision a reality.
Introduction:
Welcome to Conversations in Commercial Banking, a podcast series dedicated to the pressing financial topics facing middle market business leaders. Today we bring in experts from all facets of our North American institution to provide actionable insights that help you navigate today's environment. Our discussions include industry trends, strategies to identify and manage risk and unlocking opportunities for growth, all with the purpose of helping you realize your ambitions. And now for this week's episode,
Kate Marchi:
Hello and welcome to Conversations in Commercial Banking. My name is Kate Marchi and I lead Real Estate syndications for CIBC US. I'm pleased to be your host today. For this episode, we are discussing how CIBC's, commercial banking and syndication capabilities have facilitated strategic growth for a long-term client. Joining me today to discuss further is Robert Walker, managing director and group head of commercial banking in CIBC's, US Central region, Eric Newmark, head of US CNI Loan syndications. Further, we are grateful to welcome Dan Coles, owner and CEO of Cole’s Central Incorporated, doing business as Mickey Mart to share his insights and experience working with the collective team at CIBC. Everyone, welcome and thank you for joining us today. Eric, I'd like to start with you and ask you to offer the audience a primer on syndicated structures. When do we use the structure and why?
Eric Newmark:
Sure. Thanks, Kate. Pleasure to be here having this conversation with everyone and appreciate everyone's time. So we use the syndications primer. Just to give a little background, our syndications group is tasked with taking any of our commercial banking clients regardless of real estate, CNI or any of our other verticals for opportunities that are outside of our traditional credit risk hold size. So that would be a transaction outside of what a normal bank or a sole bank opportunity would be, is brought to the syndications group as an opportunity to help our clients either with growth objectives, M and A opportunities or traditional refinances. What we're tasked with then is bringing in a collaborative group of co lenders to help support the client and ultimately execute on a large corporate or commercial transaction for the client.
Kate Marchi:
That's great. And could you spend a minute too, Eric, how is CIBC differentiated in the space relative to other agent banks?
Eric Newmark:
So where we try to differentiate ourselves is really with our investor base and building more of a relationship with our clients. We sit in a role within the organization that is, sits kind of in between relationship management and capital markets. So our goal and our main objective is to complete the transaction for the client and further help them grow their business and also assist our relationship managers, whether in one of the regional offices or within one of our industry verticals to support their continued growth of their client.
Kate Marchi:
That's great. Thanks for that Eric. I'd like to turn now to Dan. Dan, we're proud to be your bank and know your presence in the communities you serve is absolutely vital. Would you share a bit more about your company, your relationship with CIBC and the growth over the years?
Dan Coles:
Absolutely. Again, honored to be here and it's been a great relationship. I've thought a lot about the relationship actually. I think about it quite often and how it's really helped in our success. And it really dates back almost 10 years ago. I cannot believe it's been 10 years, but it really started with what I guess you could call a generational transition that was very much treated like a third party sale process. So it was really neat. I interviewed four or five different banks and actually had, that was my first introduction to Mr. Robert Walker and the bank at the time, and it's really blossomed into more than I had ever thought from the relationship to the growth and development of the company. It's a major success story in my book and I'm happy to share it with you today.
Kate Marchi:
That's wonderful. Dan, will you touch a little more about the focus area of your company, the various verticals and the success you've had in expansion?
Dan Coles:
Sure, sure. Well, the relationship is, I grew up in the business and the business was managed much differently than it is today. And a lot of that, the way I manage the business is based on our availability of capital and we've really worked hard at growing our convenience and gas business. Our Taco Bell business, I'm a Taco Bell franchisee and I'm also a Dunkin’ Donuts franchisee. So the relationships enabled us to go after markets or maybe be more proactive than I was used to in the past. We were very reactive in the past, we were a small family business. You only spend your hard earned capital when you have it, and a lot of times you find yourself doing stuff from a reactionary standpoint versus being proactive. A lot of our growth I can attribute to the relationship with the bank and the capital that's been provided and we've really focused on our retail growth right now. Basically we operate in the state of Ohio. We're pushing south into Kentucky and West Virginia regions right now, for both convenience and gas, Taco Bell and Dunkin’ Donuts. We also have a wholesale side of our business where we operate our own fleet of trucks. We provide fuel to local businesses like ours, local municipalities. We're propane distributor, wholesale, bulk oil. We do a lot of different things and speak a lot of different languages and basically we're open seven days a week. It's a lot of fun.
Kate Marchi:
That's wonderful. I'd love to draw Robert in here now. Clearly the been critical, but also your thought partnership, your advisory touch on how you think about the relationship and how you help Dan and his team be proactive to take advantage of some of these opportunities in the marketplace that he is a leader in.
Robert Walker:
Sure, sure. Thanks Kate. As Dan said, relationship's been growing for the last 10 years and one of the things that when I first met Dan, I could tell that he's an entrepreneur at heart. He likes to build things, grow things. So one of the things we tried to do, working with our syndications team was develop a credit facility that would work for Dan in the future and have a capital expenditure component to it that would support his growth. And it started really small, but we could see that's what Dan wanted to do. And over the last 10 years, that use of capital and that capital expenditure facility to Dan's point, has really helped him transition and grow exponentially from where he was 10 years ago. So we tried to look at the client, understand what Dan this case wanted to do and what his vision was, and tailor the solution to that vision to help him achieve his goals and objectives. And it's grown fivefold from a credit facility size over that 10 year period all driven by what Dan's vision was and what he wanted to pursue as the new transitional generational owner of Mickey Mart.
Kate Marchi:
I guess on that comment, Robert, it sounds like pretty early on you had an understanding that the credit facility that started out between you and the company was going to grow beyond. At what point did you engage with syndications and how did, if Eric, you can chime in, how do we prep the company, the client, to get ready for that larger marketing effort on the debt side?
Robert Walker:
Yeah. Well, one of the challenges I think when we first got introduced to Dan, we were a smaller bank. It was the private bank certainly had a smaller balance sheet than what we do now as part of CIBC and that the functionality capabilities that CIBC provides. We were pretty clear with Dan early on that this is what we can do as The Private Bank. We do have a strong syndications team despite our size at that time, and Eric and his team can be involved and they will be involved early on. So we try to lay the groundwork with Dan that this is where your growth wants to go. We will have to get a other banks involved in a syndicate to help support your growth. And that grew from single bank very early to quickly a second bank within less than a year. And now I think, Dan, we have seven banks I think in your bank group expanded, like you said, fivefold from a size over that time period. So I think it's important, as Eric and his team always say, early involvement, early communication is the key to success. And I think in this case, getting involved with Dan and laying the groundwork early about what we could do and where he wanted to go was key to that happening.
Kate Marchi:
That's great. And Eric, could you touch on some of the efficiencies to the client that the CIBC syndications team can offer both in terms of prep for go to market and then also through the life of a credit facility?
Eric Newmark:
Absolutely. So I think Robert brought up a great point, which was when we were The Private Bank, we had to have these conversations with our clients a lot earlier on, smaller hold size. So getting comfortable with putting a bank group together, but also with the confidence that we were going to be able to continue to lead and support our clients in their growth. So when we're doing a lot of the work on the front end, it's really with Robert and his team and ourselves and any client and sharing with them what the strategy is, the go to market, and obviously on the front end we talk about the transaction specifically, right? At the end of the day, we want to get the transaction closed, but what goes into that closing and then the ongoing relationship is equally as important. We want to make sure that we have the right banks in a bank group who are not only there to help us close and bring in the dollars that we need to raise, but also understand the client's vision, their growth prospects, and are going to be a long-term supporter along with us of that client.
And I think that comes with just time and experience of working with these banks and making sure that we have an appropriate list of banks that we can bring in for a specific transformative transaction. Once we close, we still stay on obviously monitoring the transaction, working through agency services and any of the ongoing amendments or services needing to provide to our borrower. But as well, Robert and his team still remain the quarterback on that relationship, and we work hand in hand with him and his team to support our clients, including Dan with whatever needs they may have in the future. And so we're able to constantly be working on new solutions and be ahead of it if and when there is a new capital need required.
Kate Marchi:
That's great. Dan, any last thoughts in terms of where we go next? And hopefully we can assist you in future days? We appreciate the partnership thus far.
Dan Coles:
For sure. I'll go back to commenting on what Robert had said earlier when we first met in that room, and I had actually had an investment banker that I had hired to help me interview banks because I mean, this was a different level for me than what I was used to. And I remember that investment banker and I told him what bank felt the best. And his response was, are you sure you have some bigger banks in the room? Don't you think that it makes more sense to go with the bigger guys? And I said, something just feels good about Robert and the bank at the time. And to Robert's credit, I mean that relationship, even with now the bank being CIBC, it's the same. It actually feels better than it did 10 years ago. And you guys have proven that the capital can be available when you do bring in other banks in that bank group. So it's been a great relationship and it's been built on honesty and hard work, and I hope to continue that for another 10 years.
Kate Marchi:
Well, that's terrific. Dan, Robert, Eric, we thank you for your time and your insights today. It's truly energizing to talk about such as successful partnership and a high quality growth story. And to our audience, thank you for joining us on our podcast today with a focus on the Loan Syndications products. If you have additional questions, please do reach out to your local relationship manager and coverage team. In the meantime, check us out at cibc.com/us or across several social media platforms by searching @CIBC_US. Thank you for listening.
Disclosure:
CIBC is a member, FDIC and equal housing lender. Loans are subject to credit approval. Guests of Conversations in Commercial Banking are not paid for their participation. To the extent that information contained herein is derived from third party sources, although we believe the sources to be reliable, we cannot guarantee their accuracy. The CIBC logo is a registered trademark of CIBC, used under license. Investment products offered are not FDIC insured, may lose value and are not bank guaranteed.