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Mid market financing
Established and growing
companies generally have large capital requirements for
increases in working capital, new plant and equipment and
purchase of competitors and for operations. In addition, mature
private companies often face the need to “ cash out” some of the
shareholders. Lastly, management teams sometimes get the
opportunity to purchase the business which they operate from a
large corporate parent.
The banks will
usually support part of the purchase of plant and equipment and
will extend credit on ½ to ¾ of a company’s incremental
working capital requirements but this usually leaves a gap.
Generally, the Banks do not support the buy out of significant
minority shareholders. To further the corporate strategy , these
companies need to raise subordinated capital or equity but
the original shareholders are usually leery of taking on new
partners. The “mezzanine” market is the ideal solution for these
needs. Funded by institutions, mezzanine financing is generally
less dilutive than common equity and the institution stipulates
that they will be out of the investment in a fixed period of
time which avoids the issues around a permanent partner.
The partners of
Stirling Mercantile have long experience in arranging growth
capital, management buy out and shareholder restructuring
financings and understand the processes, deal structures and
information requirements of the institutional mezzanine funding
market. SMC is generally able to improve on the terms of the
deal and increase the likelihood of closing a transaction for
these financings, as well as freeing the management from the
heavy workload required to take a mezzanine financing from
beginning to successful closing.
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Early-stage equity financings
