McWhorter, Josh – Faces of Outdoor

Josh McWhorter owns McWhorter Capital Partners, a Cartersville, GA investment fund with holdings in real estate, accounting, restaurants and out of home advertising. In 2015 the firm launched Horton Outdoor which owns billboards in Georgia, Alabama and Florida. Insider asked McWhorter to talk about out of home.

Josh what’s your fund’s investing philosophy?

Like most firms we seek to deliver total return through appreciation & income. We differentiate ourselves through “why” & our flexibility. We started officially in 2013 with roughly 40 families who invested their hard earned dollars that have given me a lot of leeway and grace in terms of decision making. The whole purpose behind the mission was a calling I had to allow partners to give more through our returns. I’m a huge believer in giving personally but realized early on I could only do so much. However, if I could get likeminded people on board, together we could create a better community. We’ve been blessed thus far & pray the Lord continues to bless as He has in the past. From a flexibility standpoint, we’re still relatively small & a private company. If I personally see an opportunity that may produce less income now but offers potential appreciation down the road, it’s allowed. Likewise, if an asset produces substantial income now but doesn’t quite have appreciation potential of others, there’s a tremendous amount of support as well. Starting in Q1 2016, we put a board of directors in place for financial & operational oversight as well as direct the future of the company.

Why out of home?

We were heavy in multifamily early on. We had a great partner in Calvin Evans, Augsburg Investments, who really helped in creating great returns for shareholders. Multifamily grew exponentially more expensive very quickly. Looking for an alternative that would prove to provide income now plus potential appreciation down the road, my eyes were opened to OOH. I was led by some of the best in the business – Eric Horton, Bob Postiglione & Jeff Lewis. These three gentlemen were instrumental to whatever we have accomplished thus far. Obviously, we ended up naming the company after Eric for his invaluable contributions to the company. Since we made the decision to go all in, I can’t get enough of it. I love the business. Outside of any potential financial benefits, there’s just a lot of good people in this industry.

What are the strengths and risks of investing in out of home?

The strength is the consistent cash flow. We’ve been blessed with some great companies that see value in advertising with us. As great as the cash flow has or can be, I sincerely hope they see a tremendous return on their investment in us as advertisers. Running multiple businesses, I see advertising as much from their point of view as I do from the OOH side. There’s a finite marketing budget so each company that spends money takes a risk and everyone at Horton takes that with great responsibility. We continually look at ways we can add value to their investment with us.

From a risk perspective, the regulatory environment seems to be tightening across all spectrums of every market. That’s always a concern, but on the bright side less available locations only adds value to existing boards. Also, compared to other industries, prices are higher. The old motto of you make your money when you buy rather than sell applies ten times over here in my view. Whatever you pay, there must be a plan to increase value. You either get better or worse, no one stays the same.

Horton Outdoor Plant
What are your plans for Horton Outdoor?

As you can tell, I’m big on people. Specifically with Horton, we were able to bring in Marshall Henderson. First & foremost, he’s a quality individual who cares for our clients. We take great responsibility in hiring anyone therefore when we made the decision to go after Marshall the goal was to grow and build the infrastructure around him to make this as a success. Eric’s son, Hunter, joined us and handles all accounts we have in the NW GA territory. We absolutely couldn’t have hired someone with more potential that had such a personal attachment to this business than Hunter. Kayla Willett just joined us in Birmingham. She wants to make this a success. From an infrastructure standpoint, Kelly Hemphill assists Marshall and all sales. I haven’t met anyone that didn’t appreciate her. Deanna Berry is MCP’s COO and oversees everything Horton among other responsibilities.

Most importantly, I was able to hire my dad, Harvey McWhorter, very recently. I asked several people who I trust if I was looking for someone with financial & operational experience – a CFO/COO hybrid – who would you hire. Most responses were something to the effect of “have you ever met your father?”

With all that said, our goal is to grow but grow as intelligently as we can. We certainly don’t want to buy dots on a map, but we do like several geographical locations. Part of growing is being sure we can handle the growth and most importantly, benefit our advertisers. This is why we made a significant investment in human capital on our side this past quarter. We have to be able to service our clients. Anyone can sell ad space, but it takes a little more to develop a relationship, create a plan & generate ROI for clients.

Investor Josh McWhorter on the Out of Home Business

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We saw Deanna Berry’s linkedin post on the sale to Trailhead and asked to reprint it. Deanna credits the employees and vendors who helped McWhorter thrive and grow. A great read if you are new to the out of home business or are thinking of starting your own out of home company. It’s important to pick the right employees and vendors.

By Deanna Berry, COO, Horton Outdoor Advertising & McWhorter Capital Partners

This is the part where I’m supposed to say that this is a bittersweet moment, but, quite frankly, I’m still not to the point that I can see anything sweet about it. I’ve shed many a tear, and I’m sure there are many more to come.

I love my Horton team. Kelly Hemphill, Kristy East, Hunter Horton, Charlie Callari, Wayne Myers, Rachel Bailey, Chase Rierson, and of course, the guy who started it all, Josh McWhorter…they are my family. They make work fun. I also love the industry. It perfectly challenges and stimulates both sides of my brain…the creative marketing side and process driven operations side. I will miss it dearly.

Our journey in OOH began back in 2015 when Josh was convinced by one of our dearest and most vocal investors to purchase seven billboards in Cartersville, GA. The investor was Eric Horton.

We had no idea what to do with these boards. Only a couple were wrapped, and those were faded and falling off. To us, these were just real estate assets…and we treated them as such. In fact, our first advertising contracts were modified residential lease templates.

I called around town and found a few businesses that were interested in advertising, pulled out one of my RocketLawyer contract templates, and signed them up. Next, I figured we’d just order some banners like I’d always done for events and sponsorships…only 15-20 times as big. So, I called a few local printer friends for vinyl pricing and wow, oh wow…talk about sticker shock. Luckily, we were soon introduced to Paragon Printing…and they’ve been taking care of us ever since. We negotiated a landed price that, to this day, makes people’s jaw drop. And for more than six years, we never saw a price increase.

Next, we needed someone to hang the vinyls. Who even does this kind of stuff? Crazy people? Adrenaline junkies? Well, kind of both. We were given the phone number for a guy named Timmy. Turns out, Timmy was quite a character…but from the moment we made that phone call, Timmy Baldwin has been part of our Horton family (even though he has a full-time job somewhere else). He’s sent me pictures from atop a 150’ billboard during a tornado watch and even harnessed me up one time and let me climb with him (not the 150’ board). He’s the best. Literally.

A year later, we bought five more billboards. Then two more. Then 43 more. Wait…this is really a thing now, isn’t it? We decided these assets needed their own company and their own team (I’m talking about you, Marshall Henderson), so McWhorter Outdoor was born. Sadly, it was about this time that our good friend, Eric Horton, passed away. As quickly as those McWhorter Outdoor imprints had gone up, they came back down and were replaced with the only thing that seemed appropriate… PMS 289 blue background with PMS 158 burnt orange letters outlined in white that read “Horton” in Galliard Roman font. Hint: War Eagle. Our team was later blessed with the addition of his son, Hunter – and boy would his dad be proud to see what he has been able to accomplish.

Moving on. I love software programs. I knew we needed a system that could manage our contracts, schedule our ads, provide reports, etc. I was sure there was something already out there…but what’s the fun in that? Building something exactly the way we wanted it would be so much more fun! Enter a friend of a friend, coder extraordinaire, Eric Hazelwood. Eric had built something kind of billboard related for a business he was involved in that managed ads on tv screens in restaurants…so we started there. What we have today is a system perfectly suited for what we do, yet incredibly flexible. I’ll always be proud of what we built and grateful for Eric’s patience and willingness to tweak, create, and improve as we went.

Next up for the newly formed company was a plant of 13 billboard structures that introduced us to the world of digital OOH. It was also at this point that we were introduced to the fabulous Leslie Morris, Skydragon Design for graphic design and digital scheduling. This girl and her team are second to none. I’m not sure when she sleeps…or if she sleeps, but I’m blessed to call her friend. Down the road a bit, she introduced us to another graphic designer, Adam Owen. Now, I do graphic design myself so I can be a little critical, but not with these two…Leslie and Adam never disappoint. True artists and true professionals. If you ever have a chance to work with either one of them, do it.

So, now we’ve grown a pretty impressive plant. The digital acquisition put us in three states, and it was time to build a few billboards of our own. This is when I’m introduced to a few more “best in the business” guys. Matt Schulze and Marsha Cole with Selective Structures have built some amazing structures for us and taught me so much about the process along the way. They also hooked me up with the best install guys in Georgia and Alabama. No one can dig a hole and set a 30 ton steel structure in the ground quite like Marcus Hardin with J-Mar Craneworks and Larry and Brandon Dyar with MasterBuilt Billboards. They’re all just good people. Combine them with Jason Cheek and Southeast Electric, and you have the billboard installation dream team.

Rewind a little to that digital acquisition for a minute. This is also when I met this guy named Britt (who I referred to incorrectly as “Brett” for probably a year). I didn’t really like him when I first met him. I thought he overpromised and would surely under-deliver. I’m not often wrong about people…but this time I was. Britt McConnell has probably been my most valuable resource in learning the ropes of the industry, and he’s one of my favorite people in general. He and Jock Gibb welcomed me to the OOH community and treated Horton Outdoor like it was their #1 customer – knowing good and well we’re probably not even in the top 20. I’ve looked at several different digital manufacturers along the way, but none come close to offering the level of product and service that Formetco does.

Fast forward to today. Twenty four fun-filled acquisitions (with the best closing attorney known to man, John T. Mroczko, fourteen new builds, and four digital conversions later…we pass off our 146 structures, 324 faces and 661 ad spaces to Trailhead Media.

During the negotiations, there was some discussion about trade secrets. I thought that was a little odd considering it was an asset purchase and not an equity buyout…but here are my trade secrets:

Find good people who understand your vision and want to see you grow as much as you do.  Be loyal to them and they’ll be loyal to you.
Use your boards for good, and be an asset to the communities that you serve.  If you support them, they’ll support you.
Don’t let your own bias interfere with accomplishing your mission as an outdoor operator – which should be providing unfiltered messaging for businesses and organizations that seek growth.  It’s not about you.
That’s it.  That’s all I’ve got.

I’m not sure what lies ahead for me and what McWhorter Capital Partners will get into next. I’m sure whatever it is, I’ll learn to love it…but I’ll always be a fan and a cheerleader of this thing they call OOH.

As for those 146 billboards…Please take good care of them, Trailhead. They were built with a lot of love.