In the late 1980s, the Odom Corporation was a conglomerate of distribution businesses serving Alaska, supplying Alaskans with a wide variety of necessary products: beverages, foodstuffs, meat, perishables, and many others. Odom was founded and led by Milt Odom, and was built over decades through sheer force of will and entrepreneurial risk-taking. In comparison with building the business, estate planning seemed bureaucratic and boring, so careful transition planning was always sidelined in favor of more pressing matters.
Upon Milt’s death in 1986, there was no clear roadmap to guide an orderly resolution to a group of beneficiaries and, as a result, each proclaimed their preference and rushed forward to claim their interests. To say there was a difference of opinion among the parties is wildly understating the tenor of the moment.
Three of Milt’s sons emerged from the group as having a primary goal of maintaining the business as a family-owned independent beverage distribution business. Those sons reached out to us to assist them in resolving all competing interests for the estate, in order to leave them in control of the business and able to continue its progress. We helped the brothers negotiate a contentious buyout of all other parties.
Over the ensuing years, our relationship with the company and the family deepened. We collaborated with the company on multiple financings, strategy sessions, and acquisitions, and we took a position on the board of directors. In 2009, an opportunity presented itself to consolidate Alaskan beverage distribution through the acquisition of Alaska Distributors (a multi-state beverage distributor). The acquisition itself was complex, in that the Odom Corporation would buy the Alaska franchise of Alaska Distributors, while Columbia Distributors would buy the Washington franchise. Further complicating execution was financing the acquisition in the depths of the recession when lenders were reluctant to lend any new money. To fill the gap, a financing that included new bank debt and mezzanine was used, in combination with the divestiture of the collective wine and spirits businesses of both Odom and Alaska Distributors into a joint venture with Southern Wine & Spirits, the largest wine and spirits distributor in the country.
By simultaneously negotiating the acquisition, new bank financing, a mezzanine loan, and a new joint venture with all the consequent “sale” aspects of a deal as well as on-going governance of the joint venture, a major transformation occurred for the company. Several years later, the sale of the remaining joint venture interest to Southern Wine & Spirits gave Odom liquidity that allowed it to restructure its balance sheet and the fuel to expand beverage distribution into Hawaii.
Today, the same three brothers we went to bat for in 1986 continue their father’s legacy and now own a dominant beverage distribution business throughout the Pacific Northwest, Alaska, and Hawaii. We have deeply valued the personal and professional connections we’ve made with the Odom Corporation and their families over parts of the last four decades.
“"Zachary Scott has been a trusted advisor to the Odom Corporation for 20 years. During that time period, they have assisted us with strategy, senior debt and mezzanine financing, acquisitions, divestitures, joint ventures, shareholder buy-outs, management compensation and evaluating/sourcing senior management.
They have played a critical role in our success, and we view them as a partner. I highly recommend Zachary Scott."”
Building a Middle Market Leveraged Capital Structure
Private sources allow middle market companies to build a capital structure that fits their situation.