WorldWide Drilling Resource

22 SEPTEMBER 2013 WorldWide Drilling Resource ® A History of Deal Making Adapted from Information by Allegiance Capital Corporation David Mahmood, founder and chair- man of Allegiance Capital, created, man- aged, and sold seven businesses in 40 years before founding Allegiance Capital his eighth company. “After starting and selling seven businesses, one thing I learned was - relationships are the key to deal making,” Mahmood stated. “Before I founded Allegiance Capital, I met and worked with a lot of investment bankers. Most had never owned a com- pany, never had to make a payroll on Friday, or pay the bank note on Monday. They were all very smart, but they could not relate to me as a business owner. Very few investment bankers really appre- ciate what it takes to interview, select, hire, and train people and build a prof- itable organization. That is why I founded Allegiance, and all of our bankers are experienced entrepreneurs who have owned and sold businesses. They know how important that relationship is.” Mahmood is more than just an in- vestment banker. “To sell companies, as we do at Allegiance Capital, you have to be able to build a relationship with business owners. You have to be able to understand what they have done to build their business, what motivates them and what their goals are,” explained Mahmood. “That is what sets Allegiance Capital apart from other investment banks. We relate well to the owners of privately-held and closely-held companies since most of the invest- ment bankers at Allegiance Capital have run their own companies.” Mahmood’s colorful business career began when he trademarked Hoyle play- ing cards and boosted card sales by almost 30% the first year. Mahmood hired Omar Sharif, the Oscar-winning actor who also happened to be a bridge champion, to promote the Hoyle brand. He also hired the Italian Blue Team who had been the World Bridge Champions for 13 years and partnered them with Omar Sharif to play some of the best bridge players in the United States. It be- came known as the Omar Sharif Bridge Circus. He went on to sell playing cards to 32 of the 38 casinos in Las Vegas at the time. His success in playing cards allowed him to trans- form a losing corporate division that was going to be shut down, into an exceeding- ly profitable operation. Mahmood then became a licensee for the National Football League and cre- ated team posters for both the NFC and AFC. Next, he signed Peter Max to create a line of psychedelic posters, and quickly built a very successful poster business. Mahmood built and created a variety of companies. He saw a bright future in the hobby and craft industry before there were major craft stores around, so he cre- ated an industry supplier called Hobby Time. He also created one of the first companies to sell advertising on the back of cash register receipt tapes, became an early retailer of leather furniture, and marketed an exclusive line of gift wrap, ribbons, and bows. As a result of build- ing a variety of companies, he was not only a serial entrepreneur but someone who quickly appreciated the competency and capability it took to become a mas- ter at the art of the deal. Through his years of creating, build- ing, and selling successful businesses, he identified the opportunity that became Allegiance Capital. “When a business owner is ready to sell, or needs to sell their business due to health reasons, they want to work with someone who they can relate to. Someone who understands what they have sacrificed to build the busi- ness. I created Allegiance Capital to meet that need,” emphasizes Mahmood. Allegiance Capital, now 15 years old, specializes in selling middle market com- panies. Allegiance works with companies in the drilling and energy sector as well as other industries. Mahmood, now 75, is actively involved in the dai ly operations of the company, and thrives on helping business owners. “I en- joy helping people realize their dreams. Business owners come to us when they are ready for a transition in their lives. We have the privilege of help- ing them transform years of hard work and dedication into the dreams they have for the future. Sometimes that is a total sale of the company, but often it is a tran- sition that enables them to take some chips off the table, protect themselves financially, and still stay involved in the operations of the company. Everyone has a different vision of what they want. We help them through the transition and max- imize the value of their company.” After owning and selling seven com- panies, and helping hundreds of other owners sell their companies, Mahmood has some advice for business owners. “Have a transition plan in place. Plan ahead - don’t wait until you are forced to sell due to poor health or other fac- tors. You want to maximize the value of your company and that takes prepara- tion and time.” From dealing cards to dealing companies, David Mahmood knows the art of the deal, but he never forgets good deals are built by establishing good relationships. Allegiance Capital founder believes relation- ships are key to deal making. “I enjoy helping people realize their dreams.” Allegiance Capital headquarters in Dallas, Texas.