BRADENTON, Fla. — The PFM Group has acquired Huntsville, Ala.-based Public FA Inc. as part of the firm’s ongoing effort to expand in the Southeast and add new sectors to its coverage areas.
Phil Dotts, president of Public FA, has joined PFM as a managing director.
Closing of the sale was Friday.
Terms of the acquisition were not disclosed.
Dotts said the decision to sell his independent financial advisory firm to PFM came after nearly a year of discussion and collaboration on projects.
He called the merger “a good fit.”
When closing the sale got closer, Dotts said he began notifying his clients about the pending change in ownership.
He hopes to remain financial advisor to Huntsville, the state of Alabama, and other issuers, he said.
“As far as all existing relationships we have, I anticipate those staying intact,” Dotts said. “I think if anything this is a win-win for all our clients since the same folks will still be there.”
“In addition, we will have a lot of back-up in specialty areas we didn’t have before,” he said.
Staff members from Public FA that will transfer to PFM, and remain in Huntsville, include financial advisor Marcie Porter, Kari Fox, an asset manager who works on post-closing requirements for housing deals, and administrative support specialist Elizabeth Fleming.
Huntsville is PFM’s first office in Alabama. The firm will bring new day-to-day expertise in areas that Public FA does not routinely cover, such as toll roads and health care, according to Dotts.
“We do a lot of housing-related work, and PFM does not,” he said, adding that Huntsville will “become the housing central for PFM nationally.”
Public FA opened in 2001 providing financial advisory services to public, nonprofit and corporate debt issuers.
In addition to assisting clients with bond sales and direct bank placements, Dotts said his firm helped a number of clients develop 10-year capital plans and debt management policies.
Public FA has clients in more than 30 states, including state and local governments, counties, utility boards, universities, airport authorities and housing authorities.
Public FA was the top financial advisor in Alabama the last three years, and was the No. 1 advisor in the state in five of the last 10 years, according to Thomson Reuters.
PFM did not appear in Alabama’s financial advisory rankings over the past five years.
“We are absolutely delighted to have a trusted professional with Phil Dotts’ background, solid reputation and knowledge base join PFM,” said a statement from John H. Bonow, PFM's chief executive officer.
“The acquisition of [Public FA] allows PFM to expand our services in new sectors, such as public and affordable housing, as well as into different geographic regions,” Bonow said.
Expanding into Alabama has been a focus of the firm’s strategic plan for some time, according to Memphis-based PFM managing director Lisa Daniel.
The acquisition comes at a time when news headlines remain focused on Jefferson County, Ala., which filed the largest municipal bankruptcy in U.S. history in November.
Alabama’s largest county has suffered years of financial distress, which have resulted in some financial advisers outside of PFM cautioning potential investors against buying Alabama securities.
“We are confident that our expanded presence in Alabama, and the experience we have with distressed communities throughout the U.S. can support the efforts to resolve issues that may have potential investors concerned,” Daniel said.
Dotts said that 99.9% of issuers in Alabama are not suffering from the same kind of problems as Jefferson County, and some recent financings by various state agencies have sold well.
“Alabama is a conservatively managed state with legal constraints on deficit funding,” he said.
Daniel said that PFM is continuing to look for additional opportunities to acquire firms like Public FA, “and to take other actions that will move us towards our strategic goals.”
Prior to opening Public FA, Dotts spent 25 years in corporate and public finance work with major bank holding companies in North Carolina and Alabama, and as a partner in a regional investment banking firm.
Dotts currently serves on the Alabama Commission on Higher Education, and is a member of the governing board of A+ College Ready, a program centered on boosting advanced-placement education across the state. He also serves on the boards of First Commercial Bank and the ExChange Bank of Alabama, and formerly was on the Federal Home Loan Bank of Atlanta advisory board and the Fannie Mae advisory board for Alabama.
Dotts graduated from Davidson College and the School of Banking of the South at Louisiana State University.
Dotts and Porter are certified as independent public financial advisors by the National Association of Independent Public Finance Advisors.