An exit strategy wasn't an afterthought at a thriving media and marketing company. A big part: Transparency trumped everything.
David Burgess showed up at marketing and publishing firm Miles Media in search of a job in 1999, armed with a degree in English and anthropology from Auburn University.
Burgess met with Miles founder Roger Miles. He got a job — starting at the bottom, as an editorial assistant. His salary: $9.50 an hour.
Burgess has since worked his way up to president of the company, now Miles Partnership. The Lakewood Ranch-based business, with a niche in digital marketing for travel and tourism entities, did $60 million in sales in 2016, has 200 employees and a second office in Denver. “In no way did I stick a flag in the ground and say 'I want to run this place one day,'” Burgess says. “I've pretty much done every job along the way.”
Adds Burgess: “Roger rewarded curiosity.”
A shared appreciation of intellectual curiosity at every level is a major Miles Partnership theme. It's helped the business handle the wider industry shift from print to digital. It's also helped the company run a nimble business, with autonomy for employees and little hierarchy.
Significantly, a curious search for a better way led to an unusual exit strategy for Roger Miles, one in which he hopes the company he nurtured is now primed for a robust future.
Roger Miles, 70, recently sold his majority stake in Miles Partnership to a group of 20 senior leaders at the company. The new ownership group includes Burgess and Ben Miles, Roger Miles' son and a vice president of human resources and operations. A few senior managers from the Denver office are also part of the new ownership team. Company officials decline to disclose financial terms of the deal.
Roger Miles is now out of the daily operations of the company. He has enough money from the sale placed into other diversified investments, he says, “that will take care of me and my family for life.”
The elder Miles has less than 50% of the total shares — but remains the largest single shareholder in the company. Ben Miles isn't a one-off from the group, and he and his father don't combine to own a majority of shares.
The deal took at least five years and a team of attorneys at Sarasota-based Williams Parker to put together. Williams Parker attorney David Bustard says the exit strategy and sale is both atypical in its many moving parts and a typical Roger Miles-led deal in that it's a classic “win-win” for all parties.
“Sometimes a business owner is only good at running a business. But Roger has a unique ability to be creative on the legal side,” says Bustard. “Roger wanted to wind down while still providing continuity for employees, managers and customers.
“But it didn't happen overnight,” adds Bustard. “This was a long-term, pretty well-thought out process.”
Craft a plan
Exit strategy thoughts go back to at least 2011. That's when Miles realized, looking around at a group of senior leaders during a meeting one day, that “all of my assets are between the ears of the people in this room.”
The company had grown to more than $30 million in sales by 2011 taking a do-more approach for each client. That included a big shift to digital and online marketing, from email campaigns to website development, not just publishing travel guides placed in hotel rooms.
The company has a pod model for clients: Teams of employees handle individual accounts, target different revenue streams and experiment with new ideas. Says Burgess: “We have a lot of smart business generalists who are empowered to make decisions.”
The company got so good it won the work for several big clients, including an ongoing campaign for Brand USA, which markets America worldwide. Other clients include the official travel offices for Colorado, Delaware, New Jersey and, closer to home, Visit Florida.
Those same top employees that helped fuel the company surge, says Miles “saw me getting older and not doing anything about it. A few of them were starting to get offers to leave.”
Miles, in working with his attorneys, wanted to craft a plan where he could do two things. One, he wanted to pace his exit, not sell the business and drift away. Two, he sought to reward top employees, the people who made Miles a digital-first company with a roster nearly 100 clients deep.
That reward comes in the form of ownership shares. While a few of the new owners are in their 50s, most like Burgess, 40, and Ben Miles, 41, are between 35-45. “I've always believed that to build a successful company, key contributors have to have an asset play,” Miles says. “Turns out that asset play enabled us to implement a so-far very successful succession plan.”
Roger Miles has a history of making some counterintuitive moves that have looked risky at first, but paid off long-term.
That goes back to 1990, when Miles bought a company in Sarasota that published SEE magazine, a travel guide for tourists found in hotel rooms and lobbies. An engineer, Miles had some publishing experience. He previously led a turnaround at a struggling family-run newspaper company in his native New England, using a logical and systems-based approach to operations.
The Florida publisher had been struggling, too, but Miles saw big potential in the industry. By 1997, the company had surpassed $10 million in sales. Then came Sept. 11, and the aftermath of the terrorist attacks that wrecked the travel industry.
Miles, in a 2008 interview with the Business Observer, says his instinct in early 2002 was to build for the return of the travel sector, not retreat. With $1.5 million from private equity investors, the company added new people, created new products, bought better software and transformed its business model.
Those moves led to several more big growth years. It also enabled the company to have enough diversification among clients to survive the late-2000s downturn.
Some of the key internal players along the way to building a $60 million business include Burgess and Ben Miles. While Burgess got in early and grew up in the company in a jack-of-all-trades way, Ben Miles came on board in 2007. He had previously run training programs for Outback Steakhouse and, in another job, helped open locations for First Watch. “It was never my intention to work here,” says Miles.
But the younger Miles grew to love the entrepreneurial spirit at Miles Media — to a point. Now vice president of operations and human resources, Miles brings structure to the autonomy. “At times we are almost entrepreneurial to a fault,” Ben Miles says. “We are tolerant of risks and new things, but we also need stability.”
Ben Miles, who never wanted to take over the company outright — and his father says it was never an option — is the perfect balance to Burgess. And Burgess, says Roger Miles, is the perfect succeeding company president because he has similar value systems and believes in the same kind of company culture. “If your successor candidate is too focused on himself and not developing the entire management team,” says Miles, “be careful.”
Roger Miles and Burgess agreed early on that to sell the company internally, each side would have to be both transparent and have goals that were aligned, albeit with different outcomes. One change as the process progressed: Burgess added people to the management and ownership team. And Miles didn't object.
The sale strategy meetings were open negotiations about how much money and equity was going to be dispersed, and who was going to get it. Burgess and others with Miles Partnership decline to elaborate on the split of ownership shares, only to say it was relatively dull. “We've been intentionally boring about this process,” Burgess says. “There hasn't been a lot of drama. There's not a secret society meeting mentality here.”
The Miles Partnership sale, day-to-day so far, has had little impact on operations. Burgess says the company seeks to do more of the same, with a greater focus on generating new business the rest of 2017. “Our brand is as high-level as it's ever been in travel,” he says, “and I don't think we've fully exploited that yet.”
And Roger Miles remains part of the management team on big, long-term decisions and issues. “Roger isn't on a boat somewhere drinking piÃ±a coladas,” Burgess says. “He has a unique skill set and can see opportunities where others can't. He's still very involved in the company.”
Year founded: 1990
Headquarters: Lakewood Ranch
Founder: Roger Miles
President: David Burgess
Revenue: $60 million, up 20% from $50 million in 2015.
Products/Services: Works with tourism departments and offices on marketing and branding campaigns.
Languages: 12 spoken by Miles employees.
Markets: Has clients in 37 states and five countries.
Miles: 1.8 million miles traveled to clients and industry events.
Source: Miles Partnership