Michael Delaney | Executive Profile | ATLANTA TREND
Discovering Opportunity in Risk
By Robert Green
For many lawyers, risk is often something to be rejected out of hand. For Mike Delaney, risk is a factor to be carefully examined for its underlying opportunity.
Delaney grew up in Huntington, New York, a small town on Long Island. As a child, he spent a lot of time with his family boating and fishing the waters around Long Island, where his father taught him the importance of being prepared for the risks and challenges of the sea and life. Like many kids, Delaney also enjoyed competitive sports. “While in high school, I played a variety of sports, but wrestling was my favorite,” he says. He wrestled in college – at Franklin & Marshall – where he competed against teams from Army, Navy and the Ivy League. “My college was small liberal arts school, and we ordinarily would not have been competing against such larger schools, but the college was a founding member of the conference with a long wrestling tradition and was grandfathered into Division I,” he says.
Fresh out of college with an undergraduate degree in political science, Delaney began working at a place, which would appear to pose little risk. He started work as a paralegal at the old, established “white shoe” law firm of Winthrop Stimson Putnam & Roberts in New York City. Established in 1868, the firm had an illustrious history and the alumni to go with it, including Henry Stimson, a cabinet secretary under four presidents and concluding with his service as Secretary of War under Franklin D. Roosevelt during World War II. The firm naturally had large and important clients, like Centerior Energy, for whom Delaney worked on a large breach of contract case. “The main thing I learned at Winthrop Stimson was how to work like a lawyer,” Delaney says, “and while 80 to 90 hours per week on heavily detailed matters were not uncommon, I was exposed to brilliant people who were working on extremely complex and challenging projects.” Although he had already planned to attend law school, the experience at Winthrop Stimson reinforced his desire to pursue the degree. He applied to several well-recognized schools, but a lawyer at the firm also insisted that he try her alma mater, Ohio State. The lower tuition and well recognized name made Ohio State his choice.
Delaney did well at the law school in Columbus and made law review, for which he served as Articles Editor. He also won a scholarship to fund his third year of law school when he was awarded a Foreign Language & Area Studies Fellowship, which required him to take additional courses relating to international law as well as language studies. Delaney’s hard work began to pay off, and following graduation, he had the fortune of choosing among a few different employment options in a number of cities, but he ultimately chose Atlanta because “my brother was at Georgia Tech working on his Ph.D. and my fiancé had decided that she was fed up with the cold winters in New York.” Delaney headed south and started working for Powell Goldstein in 1996. After a year and a half in the Employee Benefits Law group, he switched to an area that he thought would better suit his desire to become more involved in the overall business of a company, the securities and mergers and acquisitions practice. Here, he concentrated on corporate law, mergers and acquisitions as well as corporate financing including public offerings and private placement of debt and equity securities. Major clients included Mariner Healthcare, Omega Healthcare Investors and American Megatrends for whom he worked on a variety of corporate securities and M&A deals. “I was also on the team that did the first SPAC (Special-Purpose Acquisition Company) in Atlanta for Echo Healthcare,” he says. “I was proud of that effort and our team of lawyers.”
As he continued to practice corporate law, Delaney found himself more and more interested in the business affairs and finance and accounting matters of his client. To satisfy this interest, he pursued an MBA at Georgia State while continuing to practice corporate law as an associate attorney at Powell Goldstein. “Juggling my MBA studies while shouldering the long hours of an associate in a law firm was quite challenging at times, but the business education greatly enhanced my understanding of my clients’ businesses and the challenges and risks they faced,” says Delaney. Following completion of his MBA studies, Delaney was made a Partner of the firm in 2004. “I spent 11 years at Powell Goldstein and had the fortune to work with a wonderful group lawyers and staff,” says Delaney, “and my time at the firm helped me build a strong legal and business foundation for my future endeavors.”
In 2007, Delaney moved to join some colleagues at the Atlanta based firm of Kilpatrick Stockton where he continued corporate work for Kemira Chemicals and the Atlanta Braves, among other clients. He also became a member of the firm’s client service team assisting Oldcastle, the largest building materials supplier in North America, with its acquisitions and expansion strategy.
In 2010, Delaney was recruited to become Executive Vice President, General Counsel and Secretary of Americold Realty Trust, the world's largest owner and operator of warehouses for the storage and handling of frozen food products. The multi-billion cold chain logistics company, structured as a REIT, was in the process of launching an initial public offering when he came on board and was focused on raising funds to acquire its largest competitor. Soon after joining the company, the plan changed, and Delaney and the Americold leadership team ended up doing a private equity and CMBS financed deal instead, which allowed Americold to acquire many of the worldwide assets of Canadian based Versacold Logistics, including all US locations, and a number of warehouses overseas. When completed, Americold owned approximately 12% of the temperature controlled warehouse capacity in the world. “After the deal was done, the real challenge became one of how to integrate two different business styles and cultures,” says Delaney. “Despite being competitors in the same industry, each company had a very distinct approach to its business and operations. Americold had a very centralized business model and Versacold was very decentralized. “As a consequence, blending and integrating the distinct approaches and styles of the two companies required a significant amount of effort,” according to Delaney, “ and the challenges of integration offered me, as an M&A attorney, a terrific opportunity to move beyond just completing the legal aspects of a deal to become an integral part of a leadership team charged with completing a complicated integration and cultural transformation.”
Meanwhile, the company was changing and modernizing into a world-class, tech driven logistics business. However, managing change is never easy, and as time passed Delaney was asked to assume additional responsibilities beyond just Legal. Soon he was responsible for Risk Management, Human Resources, and Safety and Compliance. This expansion of duties exposed Delaney to many different areas of administration and management, and he continued to develop his managerial skills and expertise. For example, some of Americold’s 12,000 employees were represented by a large union. The company wanted to maintain and foster a stable relationship with this union and as a consequence worked to avoid any union related labor dispute that could disrupt the business. Accordingly, Delaney was placed in charge of renegotiating a neutrality agreement, which would establish the ground rules and govern the union’s access to the company’s employees for purposes of trying to organize. “In the end, the agreement helped minimize labor risk for the company because we knew what to expect and when to expect it. I felt then, and still feel, that knowing what you have to deal with is better than a possible open-ended liability.”
Delaney also gained a lot of administrative experience at Americold, especially in human resources. The company’s healthcare program was self-insured, which meant that constant attention to claims and management of costs was a necessary part of his job. Dealing with operating and hazard risk was also part of his responsibility. Because the company made use of ammonia cooling systems in its warehouses, which many insurance carriers were reluctant to cover, the company had to seek coverage for the company through insurance syndicates. “That was quite an experience,” says Delaney. “When we sought to renew our policies, we met with the Lloyds syndicate representatives in London, and it was like a mini road show, meeting with member after member and explaining the progress we were making as a company in controlling and mitigating our risk. These insurance syndicates are not just one company, but a marketplace made up of member groups and individuals who made decisions on accepting risk for which they would underwrite.” This visit resulted in a successful renewal within the company’s expected annual budget for insurance costs.
In May of 2013, Delaney became General Counsel of Neovia Logistics Services, LLC. Neovia had been the third party logistics arm of Caterpillar and was carved out as a separate company in August of 2012. Platinum Equity had purchased most of the company with Caterpillar retaining a substantial interest in the company. Delaney was interested in moving to Neovia for several reasons. First, he had worked with many of the Neovia executives on the leadership team while at Americold and had enjoyed working with them. Second, his father had worked for years with the largest Caterpillar dealer in the New York area, so he knew the brand and admired the people who worked there. Third, since Neovia was doing business in 25 countries, it had a much larger international footprint and Delaney relished the global challenge. While blessed with a stable of brand name customers and a solid financial position, the new company was still in many ways a “start up, due to the carve out” requiring the establishment of infrastructure and systems so it could stand alone and become a competitive force in its industry. Delaney liked the challenge of starting fresh on what would be a business and cultural transformation. He saw the move to Neovia as a natural career progression for him because of the increase in global experience that it would bring to him as well as the increased “business side” experience brought on by the implementation of new systems for which he would be responsible. The company plans to double in size within five years, an ambitious plan that Delaney is excited to be part of. Needless to say, he feels that he has taken little risk in moving to the company and joining its leadership team.
“Risk can be good,” says Delaney, “and shouldn’t be viewed as something that should always be avoided. A good manager will quantify risk and see where the company can capitalize on it. The goal, or course, is to manage risk successfully—mitigating pure or downside risk and capitalizing on the upside risk. Having a process for accessing risk, to see how the company can profit from it, is the goal.” Delaney believes it is incumbent on management teams to communicate to shareholders and private equity owners the cost-benefit of necessary changes in terms of risk. “For example, shifting the more of the company’s healthcare costs to employees may be good for the company’s bottom line, but at some point you have a labor problem because of attrition and employee malaise and that is a risk to the success of the business and can seriously impact shareholder value in the long-run. You have to be aware and modulate management decisions accordingly,” he says.
Delaney and his family love living in Atlanta. He has been married for 17 years and has three children; a girl age 11 and two boys ages 9 and 3.
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