Connell in Deal with Japan’s Misumi Group

Connell Limited Partnership has sold Dayton Progress Corporation, PCS Company, and the components group of Anchor Danly to MISUMI Group Inc. of Japan. The acquisition, for a total of $200 million, was previously announced in October 2012. Global mid-market investment bank Lincoln International acted as exclusive financial advisor to Connell.

Lincoln International Hires Business Services MD

Lincoln International has hired Peter Stack as a managing director in its business services group, where he will lead the firm’s marketing services practice. Based in Chicago, Stack joins the firm from BMO Capital Markets where he was a managing director in the business services & media investment banking coverage group, specifically focused on advertising […]

Mezzanine Gets Another Chance To Shine

For the last 18 months, we’ve been extolling the virtues of unitranche debt. This structure has gained substantial popularity over the last few years as an ideal replacement for the cash flow senior debt that banks and CLOs no longer supplied as eagerly to the middle market following the 2008 credit crisis. With the ability […]

Ron Kahn: Does the Stock Market Really Affect Debt Valuations?

The stock market has seen incredible volatility during the last several months, and, unfortunately, the overall trend has been downward. But does a decrease in equity values affect the valuations of illiquid debt securities? The answer is yes. And why do we even care? Because many middle market lending institutions like BDCs, hedge funds, credit […]

Please Don’t Freeze in August

It’s only August. We should all be out enjoying the hot summer weather. Yet winter may be coming early this year as we see signs of a freeze upon us. Of course, I’m not talking about the weather, but financings for middle market companies—particularly those thousands of companies that make up the back bone of […]

Ron Kahn: Options Abound!

Here we go again – the lenders are out in full force, aggressively marketing to borrowers and eager to deploy capital. It wasn’t that long ago when we dreamed that these days would return and now they are upon us. Interestingly, with the advent of unitranche debt and the increasing number of hedge funds and […]

Audax Strikes Elgin Deal

Boston-based private equity firm Audax Group completed its buy of the Elgin Equipment Group, an Illinois-based maker of material processing parts for coal, oil and gas applications. Specifics on the deal were not publicized. Lincoln International advised Elgin. Kirkland & Ellis LLP served as counsel to Audax Group. GE Antares Capital, Madison Capital Funding, and BMO Capital Markets led the senior debt financing and PNC Mezzanine led the subordinated debt financing to support the transaction.

Ronald Kahn: Is Unitranche Still a Unitranche?

We’ve always been a big proponent of unitranche debt. With senior cash flow debt still difficult to come by, unitranche facilities have proven to be a very attractive alternative financing technique. We’ve been pleased by the larger hold sizes of unitranche providers compared to senior debt providers. Fewer parties in the capital structure often results […]

Lincoln International Opens Moscow Office, Appoints Andrei Joosten to Lead Region

The mid-market investment bank Lincoln International has opened a Moscow office, and appointed Andrei Joosten as the managing director who will lead the region (or, more specifically, Russia, Ukraine, Belorussia, Armenia, Azerbaijan, Kazakhstan, Uzbekistan, Kyrgyzstan, Moldova, Turkmenistan, and Tajikistan). Lincoln has 11 other offices around the world, including in Madrid, New York, and Paris. Joosten, who […]

Are Non-Sponsored Deals the Answer?

Two weeks ago, many of us gathered in New York to attend the Symposium on Middle Market and Mezzanine Finance, an annual event where many of the leading providers of junior capital convene to discuss the state of the market.

Interestingly, the attendees were rather upbeat. Yes, participants were realistic and conceded that leverage levels had risen dramatically, particularly in the last two months and, for larger middle market transactions, are approaching 5.0x total debt to EBITDA. They also acknowledged that pricing had declined during this same period with mezzanine pricing, even on smaller deals, hovering around 14%, and unitranche pricing declining 100-150 bps.

Is Mezzanine a Dinosaur (Again)?

We’ve seen it before. In fact, every time the financing pendulum swings in one direction or another, the talk starts – “Is mezzanine a dinosaur?”

It happened when CLOs emerged and cash flow senior debt providers dipped lower in the capital structure, minimizing the need for mezzanine debt. It happened again when second lien debt entered the middle market and became a competing product. It happened (and continues to happen) when BDCs became a new source of financing and it’s happening once again as unitranche loans gain in popularity and crowd out mezzanine debt.

In fact, mezzanine’s demise has been predicted so many times, I hate to bring it up. Yet this time seems a little different because more and more mezzanine funds realize they need to morph into one of two models.


Ronald Kahn: Mezzanine at a Crossroads – Yet Again!!

We’ve seen it before. In fact, every time the financing pendulum swings in one direction or another, the talk starts – “Is mezzanine a dinosaur?” It happened when CLOs emerged and cash flow senior debt providers dipped lower in the capital structure, minimizing the need for mezzanine debt. It happened again when second lien debt […]

Deal Flow In Loans Is Usually Slow in Q1

This supposed loan slump is looking more and more like a seasonal phenomenon to me, rather than a sign of the apocalypse.

We have seen a fair amount of handwringing in 2011 about the slowdown in lending deal flow since the first of the year, both by Ron Kahn of Lincoln International here at peHUB and also by Randy Schwimmer of Churchill Financial. My colleague Bernard Vaughan has also written about the same issue at sister site (Subscribers can see that report here.)

The concern is that, apart from refinancings and recapitalizations, which have been booming, the volume of fresh deal flow in the leveraged lending market has been disappointing …

Bridging the Gap

From Wisconsin to Washington D.C., budgetary issues are coming to a head. If lawmakers don’t shutter some legislative sessions, protestors threaten to do it for them. It isn’t just Amtrak that needs to be fully funded; as cash-strapped state and local governments look to offset rising pension liabilities and constrained budgets, they will have to […]

Where Have All the Financings Gone?!?!

As the 2011 began, lenders were convinced the need for middle market financings (defined as companies with EBITDA of less than $50.0 million), which started to increase during 2010, would accelerate and they would all be overwhelmed with increased demand for debt capital. But as we talk to numerous financing providers, including senior lenders, finance […]

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