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Corbel is the first operationally intensive non-control structured equity investment fund in the lower middle market, offering a compelling capital solution for business owners who are not ready to sell control, but who believe they could benefit greatly from receiving operationally supportive advice and assistance to improve and grow their businesses in preparation for future liquidity or exit events.
Corbel benefits greatly from its relationship with Corridor Capital, LLC (“Corridor”), an established, operationally-intensive control equity investor. To support Corbel’s operational and investing activities, Corbel can leverage the shared services platform for investment leads, portfolio operations support and access to Corridor’s fund administration and back office infrastructure.
Examples of operational support initiatives include, but are not limited to, operational analytics, sales force implementation, systems scoping and implementation, restructuring, real estate consolidation, financial controls design and implementation, M&A support and personnel recruitment.
Some of the employees of Corbel led by Jeff Schwartz, veteran of Ares Management and The Gores Group, are Craig Enenstein, CEO of Corridor Capital, and Michael Jones, an experienced M&A professional previously at Morgan Stanley.
Corbel targets lower middle market companies who desire a minority partner to help them scale or professionalize their businesses ahead of an ultimate exit event. Corbel strategy is focused on executing minority investments into profitable, well-positioned, lower middle market businesses. It offers flexible deal structures to allow for a tailored solution to fit needs such as recapitalizations, growth capital, acquisition financing and buyout of minority shareholders. Furthermore, it provides access to operational resources including Geoff Greulich, former North America head of operations for Oaktree Capital’s Global Principal group, and to a team of seven executive advisors.
Typical Investment Profile
The Investment criteria of Corbel can be summarized with the following points:
- Investments of $5-15 million in companies meeting these criteria:
- EBITDA of $2-8 million
- Entreprenuer or family-owned businesses and non-core divisions, desiring their highly active partnership
- Profitable, stable and growing businesses with strong industry positions
- Identifiable growth and value creation potential
Typical investment structures include, but are not limited to: debt plus warrants, convertible debt, and convertible preferred equity.
Corbel provides mezzanine financing to a wide variety of industries including:
- Consumer products and retail
- Specialty manufacturing
- Business services (especially those that are asset-intensive, have a defensible niche or have significant contractually recurring revenue)
- Consumer services
- Other sectors selectively
Usually the mezzanine capital offered by Corbel is used for specific transaction types. Corbel makes minority investments, on a preferred or priority return basis. Furthermore, these investments target profitable, well-positioned, lower middle-market businesses. On top of that Corbel provides operational support to help portfolio companies scale and further institutionalize their operations. Corbel has found multiple applications for its highly flexible and operationally supportive mezzanine capital. These can be summarized, as follows:
- Growth Capital – Provides primary capital to the balance sheet to drive revenue and earnings growth and increase value for an ultimate exit
- Partner Transition – Proceeds used to buy out a minority partner
- Acquisition Financing – Capital is used to support a portion or 100% of an acquisition
- Partial Liquidity – Allows owners to realize partial liquidity through a dividend at transaction close
- Creative Financing for “Independent Sponsor” Buyouts – Provides flexible capital in support of an acquisition by an “independent sponsor”
- Operations Support – Takes on the role of an operationally focused value-added partner to serve as a sounding board for management as it considers operational, financial, capital structure and M&A decisions.