reaking Down the Market Notable Mezzanine Transactions...Industries. The second transaction was the...
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Suon Place Strategies, LLC 757 Third Avenue, 20th Floor, New York, NY 10017 Phone: 212-376-6129 Notable Mezzanine Transacons • Tecum Capital Partners provided mezzanine debt and equity investments for two transacons in August of 2017. The first transacon was the acquision of Challenger Component Services, a distributer of commercial, automove, and construcon supplies, by Nebraska Heavy Industries. The second transacon was the acquision of Freelance Enterprises by Ninth Street Capital. Freelance Enterprises is a manufacturer of architectural woodworking for commercial enes and is headquartered in Denver, CO. Corporate Finance Associates acted as the sell-side advisor on both of these transacons. • In July of 2017, Marco Group Internaonal Inc. (“Marco”) was acquired by CapStreet Group. Debt financing and equity to support this transacon was provided from Fidus Investment. Marco is headquartered in both Davenport, IA and Deer Park, TX, and is a manufacturer and distributor to the surface preparaon and protecve coangs industries by issuing equipment, parts, and supplies. Marco mainly operates in the energy, infrastructure, and industrial marketplaces. Breaking Down the Market As we enter the final stretch of the year, mezzanine acvity was down 6% for the 12-month period ending June 2017 from 547 to 514. Furthermore, comparing Q2 2017 with Q2 2016, transacons were down 19% from 134 to 108. While market acvity for the first and second quarter of 2017 is consistent, volume has decreased from its 2016 and 2015 levels. In the second quarter of 2017, 108 mezzanine transacons were completed and 66 (61%) involved a sponsor. Overall, 11.5% of new plaorm private equity investments for this period had a mezzanine component, compared to 15% of new plaorm PE investments in Q2 2016. Finally, as an interesng aside, the Healthcare sector was the most acve for the quarter ending June 2017, followed by Services, Industrials, and IT. *Closed mezzanine investments of $3 MM and greater with the target located in the U.S. and Canada. Includes select unitranche and senior secured financings with pricing or other features similar to mezzanine.
Transcript of reaking Down the Market Notable Mezzanine Transactions...Industries. The second transaction was the...
Sutton Place Strategies, LLC 757 Third Avenue, 20th Floor, New York, NY 10017 Phone: 212-376-6129
Notable Mezzanine Transactions
• Tecum Capital Partners provided mezzanine debt and equity investments for two transactions in August of 2017. The first transaction was the acquisition of Challenger Component Services, a distributer of commercial, automotive, and construction supplies, by Nebraska Heavy Industries. The second transaction was the acquisition of Freelance Enterprises by Ninth Street Capital. Freelance Enterprises is a manufacturer of architectural woodworking for commercial entities and is headquartered in Denver, CO. Corporate Finance Associates acted as the sell-side advisor on both of these transactions.
• In July of 2017, Marco Group International Inc. (“Marco”) was acquired by CapStreet Group. Debt financing and equity to support this transaction was provided from Fidus Investment. Marco is headquartered in both Davenport, IA and Deer Park, TX, and is a manufacturer and distributor to the surface preparation and protective coatings industries by issuing equipment, parts, and supplies. Marco mainly operates in the energy, infrastructure, and industrial marketplaces.
Breaking Down the Market
As we enter the final stretch of the year, mezzanine activity was down 6% for the 12-month period ending June 2017 from 547 to
514. Furthermore, comparing Q2 2017 with Q2 2016, transactions were down 19% from 134 to 108. While market activity for the
first and second quarter of 2017 is consistent, volume has decreased from its 2016 and 2015 levels. In the second quarter of
2017, 108 mezzanine transactions were completed and 66 (61%) involved a sponsor. Overall, 11.5% of new platform private
equity investments for this period had a mezzanine component, compared to 15% of new platform PE investments in Q2 2016.
Finally, as an interesting aside, the Healthcare sector was the most active for the quarter ending June 2017, followed by Services,
Industrials, and IT.
*Closed mezzanine investments of $3 MM and greater with the target located in the U.S. and Canada. Includes select unitranche
and senior secured financings with pricing or other features similar to mezzanine.
Notable Mezzanine Transactions (cont.)
• Through Anvil Capital’s portfolio company, Bolts & Nuts Corporation, Atlas Devices was acquired in September of 2017. It was supported by subordinated debt and preferred stock from Pine Street Capital Partners. Atlas Devices is a manufacturer of safety products for security, defense, and rescue applications based in Boston, MA. Senior Debt was also provided by Blue Hills Bank. Philpott Ball & Werner advised on this transaction.
• In September of 2017, it was announced that Marquette Capital Partners provided mezzanine debt and equity for the recapitalization of Market Fresh Produce. Market Fresh Produce is based in Nixa, Missouri, and is a leading fresh produce company with a “Farm to Fork” strategy. C3 Capital Partners also provided equity and debt for this transaction.
• Falcon Investment Advisors provided subordinated debt as part of FastMed Urgent Care’s refinancing. FastMed Urgent Care provides emergency care services with locations in Arizona, North Carolina, and Texas. The transaction was completed in August of 2017. Advisory services for this deal were provided by Houlihan Lokey.
• National Counseling Group’s ncgCARE acquired Starlight Behavioral Health Services, Inc. in August of 2017. This transaction was assisted with debt financing that was provided by NewSpring Mezzanine Capital. Starlight Behavioral Health Services, Inc., based in Huntington, West Virginia, provides individuals with behavioral and developmental needs from childhood through adulthood with disability services.
• LKCM Headwater (“Headwater”) acquired consumer sports and outdoor equipment manufacturer Alliance Sports Group in August of 2017. The transaction was supported with mezzanine and equity financing from Capital Southwest. Alliance Sports Group is based in Grand Prairie, TX and has a family of seven different sporting related brands. BB&T Capital Markets advised on this transaction.
• New England Car Wash Equipment LLC (“NECWE”) was acquired by Generation Growth Capital through its Harrell’s Car Wash Systems Inc. portfolio company. The transaction was assisted by senior debt provided by Bell Capital Finance. Both ExMarq Partners and Medallion Financial Corp. supported this transaction with mezzanine debt financing. NECWE is a full-service distributor of car wash systems and supplies and is based in Littleton, MA.
For additional information or general inquiries, contact:
CATHERINE DALY 212-376-6126
Sutton Place Strategies, LLC 757 Third Avenue, 20th Floor, New York, NY 10017 Phone: 212-376-6129
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