by Jamie Walden
Posted 5/4/2009 12:00 am
Updated 2 years ago
Arkansas’ two largest deals ever — the $27.5 billion go-private sale of Alltel in 2007 to TPG Capital and Goldman Sachs Capital Partners and the recent $28.1 billion flip to Verizon — left several members of Alltel’s upper management with mountainous fortunes.
The recent start-ups of several investment firms suggest they don’t plan to just sit on their wealth.
Former Alltel CEO Scott Ford and his father, former Alltel Chairman Joe Ford, have formed the investment firm Westrock Capital Partners LLC with Richard Massey, former chief strategy officer and general counsel at Alltel.
The go-private sale in 2007 left a paper trail of Securities & Exchange Commission breadcrumbs that revealed how much many of the key Alltel players made that year. Ford went home with about $150 million, and Massey cleared about $50 million. And that’s not mentioning the accumulated wealth of Joe Ford.
Westrock Capital invests in public and private securities and provides financial advisory services in media, communications and technology, in addition to a few other industries.
William “Goose” Changose, a former senior exec at Alltel, is the company’s chief administrative officer.
Other key players at Alltel have formed a similar investment company called the Circumference Group. Led by former Alltel Chief Operating Officer Jeff Fox, the Circumference Group will function as “a value-added co-investor,” Fox said.
“We’re going to do consulting and co-invest with larger investors. And we’re going to use our experience in operating to try to add value.”
After the sale of Alltel to the two private equity firms in 2007, Fox cleared more than $70 million.
Unlike Westrock Capital, the Circumference Group will stick to investments in technology and telecommunications only.
“I think that being able to help folks that are buying and investing in businesses is a pretty natural fit,” said Fox, who oversaw more than $80 billion in mergers and acquisitions at Alltel. “And my experience is that good operators are complementary to good investors.” He added that the company already has generated revenue.
“I believe that there are investors out there in the market that can get excited about operators co-investing with them.”
Fox’s other partners at Circumference are Frank O’Mara, former chief marketing officer at Alltel, and Chris Smith, Alltel’s former executive vice president of network services.
Other Circumference associates include Lisa Handly, former SVP of customer strategies for Alltel Wireless; Brian Taylor, Alltel’s VP of prepaid wireless strategy and operations; and Scott Moody, former VP of emerging growth strategy at Alltel.
Fox said that he and the cadre of ex-Alltel employees do not have non-compete clauses that would bar them from investing in the Alltel divestiture assets — the 105 cellular market areas and accompanying assets that Verizon must sell as part of the terms of the deal. Fox would not comment on any interest or lack thereof in the assets.
Another ex-Alltel exec has opened an investment firm with a slight twist.
C.J. Duvall, who was EVP of human resources, launched Mosley Investments LLC in April.
Duvall said he intends to model the firm after his three-year-old advisory firm, the Duvall Family Charitable Endowment, by choosing “symbiotic investments” that contribute to the community while still making a profit.
Duvall had income of almost $10 million in 2007 after the go-private buyout.
Joe Slayton, former president of Alltel’s wireless operations, started his own investment group called Slayton Enterprises LLC, which was incorporated in late 2008. Slayton Enterprises has already launched an operation of its own and purchased an existing business.
Slayton said his investment firm purchased the Green Leaf, a florist in Jonesboro, in March and started a cattle ranching operation north of Pocahontas.
Slayton said he is considering buying a couple of other companies, but played the rest of his hand close to the vest because, he said, Arkansas has become rife with investment activity, largely from investment groups formed by ex-Alltel execs.
They’ve Got Skills
Not all of the businesses rising from the ashes of Alltel are investment firms, however.
Kevin Halpin, former VP of process development, and Mike Stafford, VP of customer experience management, were among the first wave of Alltel execs to receive their walking papers on Jan. 9.
Rather than starting over from scratch, Halpin and Stafford decided to build onto their existing skill sets as “customer experience” experts.
The Customer Experience Group LLC is “formulated around something that we call ‘total customer respect.’ And that was an approach and a concept that drove market share and profit gains at Alltel that were beyond our wildest imagination,” Halpin said.
“And basically what it represents … is a way of pinpointing a company’s greatest strengths and weaknesses through the eyes of its customers.”
Halpin said the Customer Experience Group helps clients simultaneously build market share, profits and customer loyalty. “We do this by helping our clients harness the power of the Web, social media and direct customer feedback to find and eliminate costly product and service defects that often go undetected or unaddressed.
“Our past experience [at Alltel] shows that such an approach can often net significant short-term cost savings and exponential long-term revenue gains through a growing, loyal customer base.”
While Stafford and Halpin plan to use their telecom contacts, their services can be applied in almost any field, Halpin said.
“Any firm that has a continuous and ongoing relationship with its customer that they need to nurture and maintain will be great targets for our businesses.”
Although the two entrepreneurs don’t expect their reputation as ex-Alltel execs to buoy them forever, they do anticipate a boost from that bullet point on their résumés.
“There’s only so long that we can go out and knock on doors and say, ‘Hey, we’re amongst the guys who created those great results at Alltel and therefore you should trust us with your future. ... But we think we’re at this unique moment in time in our economy where American businesses need to retrench, get focused on providing a superior product and service to their customers and find a way to grow their businesses through that,” Halpin said.
“If companies can unlock a 10th of the potential of harnessing customer experience improvements that Alltel did, we’ll be doing them a great service.”
A handful of folks from the leadership development branch of Alltel have started Upper Right Leadership.
The new Arkansas company’s CEO, Steve Mosley, served as Alltel’s director of leadership development before the merger with Verizon. David Black, former staff manager in charge of training at Alltel, is now president of Upper Right Leadership and Steve Dwyer, Alltel’s SVP of leadership development, is an Upper Right partner. John Cryer, VP of sales, is also part of Upper Right, but is still working on the Alltel divestiture team until the markets are sold off.
Upper Right Leadership provides products and services focused on improving leadership skills and organizational efficiency, Mosley said. Such skills include assessments, business coaching, training and management consulting.
A new Little Rock law firm also has sprung from the Verizon deal.
When Gena Gregory, a VP in the legal department at Alltel, first got wind in June of the merger of Verizon and Alltel, her reflex was to prepare for what was next.
“I immediately just thought about making a plan. That was really my first thought. I’m really very practical and that was about as far as I thought [initially].”
She and Alltel colleague Elizabeth LaRue decided to leverage their experience in corporate litigation at Alltel to form their own firm, Gregory & LaRue PLLC.
“We are really focusing on business trial work and business law. And that’s our primary focus based on our experience [at Alltel], which I think gives us a different focus than other law firms.”
Greg Taylor, former director of the enterprise program management office at Alltel, is creating a consulting services company that focuses on project management.
At Alltel, Taylor shepherded “the high-dollar, high-complexity projects or those projects that crossed multiple functional boundaries,” he said.
“Like if it was an IT project that also had engineering aspects or a marketing project that needed IT and engineering and marketing stuff, we would pull all those people from across the company, build execution plans and then make sure it all happened.”
Though Taylor hasn’t decided on a name yet, he does know what the company will offer. Taylor will help companies design project management frameworks. He added that he would also teach companies how to manage a portfolio of multiple projects and teach them how to implement a concept called enterprise project management.
“When I left Alltel, I was in the enterprise project management group, and that is managing things from the top down, as opposed to the bottom up and then looking at it holistically across the entire enterprise.”
Taylor plans to use his knowledge of project management to build a business that will be able eventually to hire ex-Alltel employees who are out of work.
“I want to contribute to the central Arkansas economy personally and then through helping other people that have a lot of value to add by helping them find employment.”
After the go-private sale of Alltel in 2007, Kevin Beebe, then-group president of operations, left the company to form a consulting company called 2BPartners LLC, which provides strategic and operational advice to private equity clients.
Beebe raked in more than $60 million in 2007 after the buyout by the two private equity firms.
But that’s not the end of the list of new enterprises.
“I know of a few others in the market for small businesses and a few others that are in the formulative stage of start-ups but can’t talk yet,” Halpin, of the Customer Experience Group, said. “So I think there will be more to come.