first career move was to become an astronaut. He wasn’t able to make the grade, thanks in part to an Air Force requirement for 20/20 vision. So he decided to pursue aeronautical engineering at the University of Illinois. Deciding not to limit his options, Corley set his sights on another universe–high finance.
After graduating from Harvard Business School in 1971, the enterprising Corley went to work for Fidelity Investments, the gargantuan investment company, as a securities analyst making stock recommendations to fund managers. The experience taught him the art and science of fundamental analysis. He researched industrial trends and evaluated financial documents to assess the intrinsic value of a company. His picks usually met three criteria: strong underlying earnings and cash flows; solid management; and a well-performing or improving industry. It also didn’t hurt that he was trained by Peter Lynch, the legendary investment guru who made Fidelity Magellan the best-performing fund of the 1980s.
Upon leaving Fidelity in 1977, Corley emerged from his behind-the-scenes position to center stage. He was first a mergers-and-acquisitions strategist for Norton Simon, the New York City-based conglomerate with holdings that included Hunt-Wesson and Canada Dry, and then a principal for the then-fledgling firm of Kelso & Co. At Kelso during the go-go ’80s, Corley helped structure 11 acquisitions and leveraged buyouts, including the $640 million takeover of Blue Bell, the parent company of Wrangler Jeans. Total value of the transactions: $1.5 billion.
Eventually, Corley was ready to strike out on his own. In 1988, he formed LM Capital Corp., an investment bank in which he is the sole shareholder, to acquire positions in companies that measure up to his discriminating investment standards. Among the firm’s holdings: Roberts Brothers Inc., a 100-year-old company that produces canned tomato products, and Perfect Fit, a bedding and mattress concern. But LM Capital’s most substantial holding to date is its controlling interest in CCA.
Actually, CCA came about when Corley was searching for another target. “We were initially looking to acquire a chain of Burger King franchises because we found there was a real value in branded fast food outlets,” says Corley. “But as chat deal fell through, we discovered another opportunity.”
In December 1995, LM Capital acquired Contemporary Industries Corp. (CIC), which operated 146 7-Eleven convenience stores throughout the Midwest for $40 million. LM Capital financed the deal with debt and equity capital from Bank One Indianapolis, Allied Capital, MESBIC Ventures, Connecticut Greene Ventures and Opportunity Capital Partners. Operating under the CCA banner, the concern bought six additional outlets last August.
The key to the operation’s success, Corley believes, is brand recognition. When the stores were managed by CIC, the outfit purchased unbranded gasoline, sold it at the lowest retail price in the market and, as a result, produced thin profit margins. Last year, CCA struck licensing agreements with such mayor companies as Citgo and Texaco. And seeing the potential to increase market share and profits, the company has opened licensing relationships to develop Taco Bell Express outlets within two of its convenience