Entrepreneur Endures Year of Talks to Hammer Out Sale


	Photo by Nicholas Griner, BBJ Staff Eric Rozencwaig worked for ABIS in Owings Mills for 12 years before buying it late last year.

Recession aided deal for Owings Mills firm

Friday, January 16, 2009
Baltimore Business Journal - by Scott Dance Staff

Eric Rozencwaig decided 2008 was the year he would take control of his destiny. He had been CEO of ABIS, an Owings Mills direct marketing firm, for a dozen years and decided it was time to buy the business.

While the route there wasn't what he expected, the result was.

He spent the entire year negotiating with the family ownership at ABIS, all the while depending on Wachovia to finance the deal.

That was not a safe bet considering the turmoil the bank faced in 2008. Stock in North Carolina-based Wachovia
lost 63 percent of its value over the year, and the bank
was acquired by Wells Fargo.

Rozencwaig's deal defies the fallout of the recession that has kept most sales on hold as potential buyers wait for lending to improve. And it may have even been helped by the economic crisis, which lowered the company's value, helping to make the deal possible. But it was still plenty nerve-wracking, Rozencwaig said.

"Close to the end of it all is when everything came out about Wachovia," he said. "I'd come in on a Monday and wonder if the underwriter I was working with still had a job."

Wells Fargo made a $15 billion bid in October for Wachovia, which spurned a previous offer on the table from Citigroup.

Rozencwaig would not reveal the terms of the deal but said it took some rough negotiations. He had previously been a minority-owner and bought out the family ownership, which he would not name.

The business takes in about $10 million in revenue each year and has about 100 employees and an 80,000 square-foot manufacturing facility, he said. The company prints 200 million pieces of mail each year for clients including Habitat For Humanity, MetLife Insurance and HSBC and Provident banks.

"A lot of people told me, 'I don't think the bank is going to go through with it,'" Rozencwaig said. "I don't know if I was crazy, but I went through with it."

In fact, Rozencwaig was one of the few to do so. Mergers and acquisitions actively fell 30 percent in 2008, according to Thomson Reuters. Mid-market deals worth up to $500 million fell 22 percent.

Doug Schmidt, and investment banker with Chessiecap Securities in Bethesda who was not involved with the deal, said it was impressive considering the circumstances.

"The number must be really solid," he said. "It's really hard to get a deal through credit committees these days."

But Rozencwaig said it may have been the tough economic times that helped push the deal to the altar. The effects of the nationwide economic slump dipped the company's valuation, making it more affordable that it otherwise would have been, he said.

"It all worked out where our valuation was accepted by the sellers, and the bank was happy with it," Rozencwaig said. "Had the market not crashed, the value of the business would have been much different, and I would have paid a lot more for it."

> more news