What's đ„” What's đ„¶ in Lower Mid Market M&A
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What's đ„” What's đ„¶ in Lower Mid Market M&A
Welcome to the latest edition of The Lower Middle Market! Weâll be straight to the point and get you through this one quicker than a Miami Dolphinsâ touchdown drive.
Hereâs what we have for you today:
Success in the lower end of the M&A market
A crackdown on roll-up strategies
Industry to watch: vegetation management
Whatâs Hot
Growth Equity - According to Pitchbook, growth equity deal flow defies a slowdown in PE dealmaking. Link
Smaller/Niche Private Equity Funds - Private equity strategies that have less than $350 million in assets, and that focus on investing in esoteric industries or businesses, continue to meaningfully outperform their larger peers, according to data collected by Mantra Investment Partners. Link
M&A Activity on Founder-Owned Companies - The increase of deals in the lower middle market is due in part to a slowdown since the onset of the pandemic. Everyone is now playing catch-up. Founder-owned companies are clustered in industries, such as those that are consumer-facing, according to PitchBook. These sectors were severely impacted by the pandemic. Link
Unmanaged Vegetation Surrounding Energy Utility - Utilities investors are charging up for vegetation management. The sector is fragmented, innovative, and facing surging demand. Dealmakers have an opportunity to invest in keeping the lights on and preventing wildfires. Link
Whatâs Not
Private Equity Fund Regulation - Private equity got almost everything it wanted when securities regulators watered down their new fund oversight rules. Now it wants the rest. Link
Small Business Lending - As an aftershock of the SVB collapse, regional banks are reviewing their small business lending. According to Jeffrey Stevenson, managing partner at VSS Capital Partners, âRegional banks have pulled back and, in some cases, have put a hold on new customers or, at the very least, have lowered their leverage levels and tightened their covenants,â he says. âItâs a big dynamic in the marketplace right now because small companies have [traditionally] been financed through the regional banking system.â Link
Roll-up Strategies - The FTC recently filed a lawsuit against PE-backed Anesthesia Partners in which it is alleged that private equity firm. Welsh, Carson, Anderson & Stowe attempted to monopolize the market in Texas and drive up prices for anesthesia through its roll-up strategy. Link
Fundraising
Gainline Capital Partners Raises $400 Million Fund II for LMM Businesses Link
CenterGate Capital Announces CenterGate Capital Fund II Closing Link
Eagle Merchant Partners Closes Fund I with Focus on Franchise, Consumer and Industrial Companies Link
Comvest Partners Announces Final Close of Sixth Flagship Credit Fund at $2 Billion Link
Valesco Industries Announces Over Subscription of Fund III at $434 Million to Invest in Industrial, Distribution, and Bussiness Services Companies Link
Sheridan Capital Partners Closes Fund III at $575 Million of Capital Link
St. Cloud Capital Closes $236 Million LMM Debt and Growth Capital Fund Link
Angeles Equity Partners Closes Fund II at $540 Million Link
Access Holdings Raises $805 Million for Build and Buy Mid-Market Investments in Essential Service Industries Link
FVLCRUM Partners Closes Fund at Over $302 Million to Address Racial Wealth Gap Link
Interlock Equity Closes Inaugural Fund at $390 Milion Link
Other stuff
Firmexâs Q3 Deal Flow Bulletin Link
Midmarket Businesses Rethink Their Approach to Growth Link
Climate Change Alters the Real Estate Renovation M&A Landscape Link
Thanks for reading and have a great week!