even more credibility to the mix. Added to this arsenal of expertise were Adams’ considerable deal-making skills, all of which he used to leverage a new client’s (Pepsi-Cola) stated need for work into a promissory note for $1.1 million to purchase a six-color press that would handle their first big job.
The complexity of this start-up required the four men to huddle for countless hours over strategy, roles and expectations and the best way to set up. In less than three weeks, Adams-McClure was in business. Adams’ investment of $25,000 placed him at the helm with 51% of the ownership, with the other three partners investing the remaining $25,000 and splitting 49% of the shares.
The promotional printing company, run by Adams, earned $2.2 million its first year on the strength of its Coors and Pepsi contracts. In 1996, additional clients such as Miller Brewing Co. and Coca-Cola pushed revenues to $7.5 million. In another strategic alliance, Adams has subcontracted with Denver-based Optical Securities Group to do all of the promotional company’s three dimensional/lenticular (motion) printing. Adams’ portfolio now features jobs like the Batman and Robin movie poster and Bugs Bunny posing for his new postage stamp, in vivid color and appealing motion.
To continue building a reputation for full service, Adams-McClure recently bought out Knappe’s partners and folded the $8 million finishing company into their operation as a subsidiary. In yet another strategic move, Adams-McClure partnered with a former production manager from American Color, Tom Fernandez, to form a pre-press company called Magic Color Graphics 2000. Fernandez, who bought 20% of the stock as his capital contribution, also brought 20 years of pre-press experience to the bargain, plus a $500,000 start-up client.
In September, Adams’ company purchased 51% of an advertising agency in Southfield, Michigan, which is co-owned with his new partners, Calvin O’Neal and Steve Mason. This newest acquisition added another $4 million to Adams’ bottom line, bringing total revenues to $20 million, and meeting his objective to have a full-service operation under one umbrella.
PROTECT WITH A PRENUP
Of the diversity of his partners, Adams says, “Race and gender don’t matter if the parties involved can bring money or experience to the enterprise and are hardworking and honest.” He and his partners think alike, says Adams, share the same conservative values, and get along well. “The chemistry is there,” he asserts.
The right chemistry notwithstanding, Adams and his partners still prepared for the eventuality that one or more of them might want out someday. They built in an “escape” clause that allows the other partners-shareholders–to buy out a departing shareholder at market value and in proportion to his equity stake.
In attorney Taylor’s experience, most disputes are caused by unexpected circumstances such as a partner’s illness or divorce. “Unless someone comes into the partnership with an ulterior motive and wishes to be adversarial, partners will have a sincere desire to work out the problems,” he says.
All the same, nearly 90% of the breakups Taylor sees do reach the “draconian stage” and drag out in