Thinking about partnering with a PE firm that has a committed fund for our next deal. We would write ~$7.5m - $10m of equity and drop in as management.
Looking for names to work with that are ok with consumer turnarounds + independent sponsors. Targeting companies with ~$20m - $100m in revenue.
If anyone has seen these done before, how do terms typically play out?
Double fee layer is tough...how do you plan on making the economics work between you and the LMM shop?
Trivest has done some IS deals but not sure about turnaround situations
Oh good call, I'll find out.
The McGuireWoods Independent Sponsor Conference is end of this month, definitely recommend checking it out. It’s the place to meet someone to back you.
I went there before! Good conference. Actually someone from WSO had recommended it, we met up and everything! Unfortunately will be out of country this time.
iGlobal is the other one, seemingly gaining more traction there as well
Not as many LMM funds that like turnaround stories. There is a family office called Gardner Standard out of NYC and Minneapolis that does mostly 363s and other distressed buyouts.
There is Michigan based firm/fund, Seneca Partners, that partners with other independent sponsors and LMM funds to acquire LMM business. PM if you would like a direct intro.
Everside Capital Partners, or seek an SBIC
I’ll check them out. I don’t think SBIC can do turnaround
Tough for SBIC depending how you define turnaround. If basically EBITDA negative, going to be really tough unless you over equitize balance sheet and effectively use equity to fund interest payment as your runway. I've seen it a couple times, but definitely not the norm.
Why not raise equity on an individual by individual basis (HNW, endowment, etc.)? No legit LMM PE firm is going to deploy and then let someone else have the keys like that.
There are a few firms that do partner with independent sponsors. I’ve met them at the McGuire Woods conference. They all do vanilla LBO though.
And prefer working with people I can learn from instead of family offices. Might go that route idk. Haven’t been overly impressed so far.
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