Posted on: January 12, 2010
Business First of Louisville – by Terry Boyd, Staff Writer
January 15, 2010
Chicago-based private-equity firm has acquired a stake in Fellon-McCord Associates LLC.
Baird Venture Partners acquired “a significant minority interest” in Fellon-McCord, a Louisville-based energy-consulting and management firm, said Drew Fellon, co-founder, president and CEO.
The injection of capital will allow Fellon-McCord to enhance technological capabilities and research with the goal of expanding globally, Fellon said.
“We help clients find the most reliable energy source at the best price. Technology is playing a bigger and bigger part, and we want to stay on the cutting edge of research and technology,” he said.
“And, of course, that takes time and money.”
Choosing the right suitor
Fellon declined to disclose the value of the transaction or the size of the position Baird Venture has taken in Fellon-McCord.
Fellon and John McCord, co-founder and chairman, maintain controlling interest and will continue to manage day-to-day operations.
Although he didn’t rule out a future sale, Fellon said the Baird Venture deal is “not about putting a strategy in place to ramp this thing up to sell it.”
“Had we been interested in building it up and selling it out, there were a number of companies” interested in buying a majority position on the way to an acquisition by a larger company, he said.
Fellon declined to identify the companies. But “they were very nice and called regularly,” he said.
He characterized the deal with Baird Venture as long term, with Baird Venture interested in Fellon-McCord’s potential in ‘green’ technology.
“Our capability is absolutely something they wanted to add to their portfolio,” Fellon said. “Strategically, it’s an important (investment category) for them.”
Because the firm has a large number of large commercial and industrial clients, Fellon-McCord is involved in green energy and clean energy, Fellon said.
His company helps customers evaluate renewable energy sources, he said.
“We do carbon tracking, greenhouse gas emission tracking and help reduce carbon footprints while staying efficient.”
Portfolio addition
Baird Venture is the venture-capital fund of Baird Private Equity, a global investment firm with substantial positions in Asia, according to its Web site, www.bairdprivateequity.com.
Baird Venture invests in early-stage and expanding companies, according to the site. It has a portfolio of 26 companies, mostly in medical, life-sciences and business-services categories.
Fellon-McCord uses analytical models to help large companies predict and manage energy usage, manage risk, monitor regulatory changes and manage payments, among other services.
The firm also manages natural gas acquisitions for clients.
Clients include heavy manufacturers, automotive suppliers, building materials manufacturers, chemical companies and municipalities.
Expansion plans
Last month, Fellon-McCord announced a potential expansion during a meeting of the Kentucky Economic Development Finance Authority.
KEDFA granted the company preliminary approval for $1 million in tax incentives based on a $4 million-plus investment that would include adding 20 jobs that pay $23 per hour, for a total annual payroll increase of about $800,000.
Fellon-McCord leases about 9,400 square feet at 9960 Corporate Campus Drive in the Hurstbourne Green business park, but executives stated that the KEDFA incentives would allow the firm to double its space.
Fellon-McCord was founded in 1992. The firm was sold in 2003 to publicly traded, Baltimore-based Constellation Energy Group. But it was bought back by an investor group that included the founders.