Lower Middle Market
Overview
- One-stop financing solutions from permanent capital funds
- Senior and secured loans and equity investments to U.S. middle-market companies, with a focus on companies with EBITDA from less than $5 million to over $50 million
- $9.8 billion of flexible capital to create tailored solutions for a borrower and its owner(s)
- $15 million to $200 million investment size (at initial closing plus incremental fundings) with sole or lead lender focus
- Invest broadly across industries, with deep expertise in many sectors
- Relationship approach and goal for repeat investments
- Early feedback and responsive throughout investment process developed over 37-year history and quickly approaching 500 middle-market investments successfully closed
- Diligence is done up-front to avoid surprises later in the process – experience and responsive team of over 150 professionals
- Same team closes and monitors investments to provide a consistent relationship with long-term view and support
- Proven track record of fairly working through amendments
Target Borrowers
- U.S. companies
- EBITDA from less than $5 million to over $50 million
- Asset-light and asset-heavy businesses
- Diverse customers and suppliers
- Experienced management
- Broad industry focus (see below)
Primary Investment Types
- First lien term loan
- Unitranche first lien term loan
- First lien last-out term loan
- Convertible term loan
- Second lien term loan
- Preferred equity
- Minority common equity
- Majority common equity
- Combinations of the above into a one-stop financing solution
Ownership
- Smaller private equity sponsors (< $500 million)
- Independent sponsors
- Operating executives
- Management teams
- Family offices
- Founders
- Larger private equity sponsors (> $500 million)
- Public company shareholders
Use of Proceeds
- Leveraged buyouts
- Acquisitions (platform and add-on)
- Refinancings
- Capital expenditures
- Late-stage growth initiatives
- Dividend recapitalizations
We make senior and secured loans and equity-linked investments in U.S. middle-market companies with EBITDA from less than $5 million to over $50 million.
Our loans are primarily senior and secured first lien term loans (including unitranche and first lien last out). In limited circumstances, we also make short-term first lien revolving credit facilities, first lien delayed-draw term loans, and second lien term loans.
Furthermore, we make equity-linked investment alongside our loans in order to provide one-stop financing solutions to a borrower and its owner(s). As part of these solutions, we make convertible term loan, preferred equity, and common equity investments. Common equity investments can range from minority equity with no Board seats to majority equity.
Our borrowers are typically owned by smaller private equity sponsors (with less than $500 million of capital), independent sponsors, operating executives, management teams, family offices, and founders. We also invest in borrowers owned by larger private equity sponsors (with more than $500 million of capital) and public company shareholders.
Borrowers use the proceeds from our financings for leveraged buyouts, acquisitions (platform and add-on / tuck-in), refinancings, capital expenditures, later-stage growth initiatives, dividend recapitalizations and other purposes.