Billionaire takes focus on Birmingham small businesses to merge and scale into industry giants

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April 11, 2024

A Chicago-based billionaire is buying small business properties throughout the country with plans to combine many of them into larger chains.

In a recent profile by Forbes, Justin Ishbia, a founding partner of Shore Capital Partners, said that some of those properties are in Birmingham, Alabama — and will remain in Birmingham

“We’re buying businesses in Akron, Ohio, and Pittsburgh, and Birmingham, Alabama,” Ishbia said. “There’s more low-hanging fruit for me. It’s Joe Schmo on Main Street.”

“We’re just buying and buying and buying.”

Since being founded in 2009, Ishbia’s private equity firm has acquired over 1,000 ‘mom-and-pop shops’ across the country at an average cost of $15 million. The company has so far formed 61 larger chains from those aquired businesses. The chains include autism treatment clinics, bakeries, and exterminator companies.

Several Alabama business leaders and companies have taken note of Ishbia’s success and those who have worked with Shore Capital Partners have offered high praise.

https://twitter.com/ClayTravis/status/1777843496663003515

Per Forbes, in 2014, Ishbia’s business venture in Alabama coincided with an industry trend that is still paying dividends:

That was around the time veterinarian Jay Price first heard of Justin Ishbia. Price was running three Alabama clinics when a college friend called with a proposition: Talk to my law school friend, who owns a private equity firm and is looking to buy. “I didn’t really know what private equity was,” Price says. “I was like, ‘You guys can come down, but I’m not really interested.’ ” At the time, the veterinary industry—traditionally fragmented and dominated by small-scale operations—was starting to consolidate. Not long after the meeting, Price read about how National Veterinary Associates was selling to private equity giant Ares Management, and he agreed to sell a majority stake in his outfit, Southern Veterinary Partners, to Shore in a $6 million (enterprise value) deal.

From 2020-2023, Shore Capital Partners signed 801 deals. Their assets jumped to $7 billion during the same time period. The company represents big name investors including the University of Notre Dame and Sequoia Capital.

Shore’s average internal rate of return on its 14 exits, all in health care, is 53%, net of fees. That’s nearly triple the average net IRR of U.S. buyout funds raised since 2009, according to data from Cambridge Associates.

Austen Shipley is a staff writer for Yellowhammer News.