Mezzanine financing news from October were dominated by investment announcements and new fund closings in North America. Our research delivered only limited number of news items from Europe.
If you are aware of other relevant happenings, from Europe or otherwise, please let us know at info [at] getmezzaninefinancing.com and we will include them on the list.[shareaholic app=”share_buttons” id=”25491281″]
USA and Canada:
- Maranon Capital announced a new mezzanine investment to support the acquisition of Kronos Foods by Grey Mountain Partners. Maranon also co-invested in the equity alongside Grey Mountain and management. Kronos, based in Glendale Heights, Illinois, is a leader in the Mediterranean foodservice market selling gyro meat, pita, flatbread, filo products, hummus and sauces in the U.S. and Canada.
- Cincinnati, OH, based C2M Investments started the mezzanine financing fund, Great Oak Funding, to lend to small to mid-size businesses. Great Oak Funding’s commercial loans range from $75,000 to $500,000, with the average loan being between $250,000 and $300,000.
- Ashland Capital Partners has acquired Dedoes Industries. Financial terms weren’t announced. Walled Lake, Michigan-based Dedoes designs and makes equipment that supports the automotive refinish market. Graycliff Partners provided subordinated debt and equity financing to Dedoes.
- Aldine Capital Partners contributed mezzanine debt and equity and TCF Capital Funding provided $7 million in secured financing in connection with an investment by Corridor Capital to support the expansion of Connecting Point Marketing Group, Inc.’s (“Connecting Point” or the “Company”) very successful Events business.
- NewSpring Capital, a family of private equity funds providing growth and expansion capital, announced that NewSpring Health Capital, the Firm’s dedicated healthcare fund, has made a $7.5 million investment in Seniorlink. Proceeds will be used for the continued development of Seniorlink’s ground-breaking coaching and collaboration platform, Vela.
- Tecum Capital Partners provided mezzanine debt and an equity co-investment in a transaction where O2 Investment Partners and Oakland Standard Co. made an undisclosed investment in Clio Holdings LLC. Clio is a consolidator of countertop supply and fabrication businesses.
- Dallas, Texas based Independent Bankers Capital Funds (“IBCF”) previously led an institutional mezzanine debt investment in Smart Chemical Services. Now this relationship allowed Smart Chemical Services access new $14 million senior credit facility from MB Business Capital, a division of MB Financial Bank. Smart Chemical Services manufactures proprietary chemical products and provides services to the drilling, completion, water, oil field production, mid-stream processing, pipelines and fuel industries. Headquartered in Amarillo, Texas, the Company operates throughout the Midwest, Southern and Eastern United States with offices throughout Texas, New Mexico and Colorado. Proceeds of the facility were used to refinance existing debt and to fund working capital.
- Triangle Capital Corporation, a provider of capital to lower middle-market companies, announced that it closed a $27.6 million second lien debt investment in KidKraft, Inc., a designer and distributor of toys and playsets for children.
- ThreatMetrix®, The Digital Identity Company®, announced a $30 million mezzanine growth capital round from existing partner Silicon Valley Bank, the bank of the world’s most innovative companies and their investors, bringing the company’s aggregate financing to $84 million to date. The growth capital round will be used to expand the company’s global data center footprint, fuel sales and marketing for new markets, and bolster business operations into 2017.
- BarFly Ventures, owner and operator of bars and restaurants, including the HopCat chain of beer bars, Stella’s Lounge and Grand Rapids Brewing Co. secured $25 million in mezzanine debt financing from two Texas funds, Congruent Investment Partners and Main Street Capital Corporation, a raise which earned the company the 2016 ACG Growth Capital Award. “It was a pretty good deal. Interest rates (are) higher than a bank, but we didn’t get any dilution of our equity,” Sellers said. “Since then, the value of the company has gone up a lot.”
- Korea’s Public Officials Benefit Association (POBA), a local pension fund for government officials, has chosen Crescent Capital Group, Falcon Private Equity and GoldPoint Partners, to manage $120 million in US mezzanine funds. Large and small companies in the US, M&A financing to private equity firms are likely to get loans from the funds which will be invested in convertible bonds and bonds with warrant, reports said. Each of the three US investment firms will receive $40 million from the $120 million allocation.
- Neuberger Berman, a private, independent, employee-owned investment manager, announced that NB Private Debt Fund II LP (the “Fund”) closed on $750 million of limited partner commitments. The Fund seeks to invest in the junior debt of private equity-backed companies, including unitranche loans, second lien loans, and mezzanine debt securities.
- LBC Credit Partners, a provider of financing solutions to middle market companies, provided a secured mezzanine loan to PPHC Holdings, a portfolio company of Milestone Partners. The proceeds were used to support the acquisition of Fleetwood Metal Industries, Inc. Founded in 1955, PPHC is a market leader in engineered automotive tooling and hot & cold stamp solutions serving global OEMs and Tier 1 customers.
- A Belfast financial intermediary firm, Clearpath Finance, has secured a fresh pot of money – initially £25 million but which could grow to £100m within the next six months – which it claims will help small businesses in the north struggling to access finance from the mainstream lenders. Clearpath, which is regulated by the Financial Conduct Authority, will effectively offer term-loan funding, secured or unsecured, at rates of between four and 12 per cent.
- Mezzanine Capital Partners (MCP) has invested €15m for a significant minority stake in Danish wheelchair components manufacturer MBL. The deal is structured as a combination of mezzanine debt and equity, with capital drawn from MCP-advised Accession Mezzanine Capital III, a 2009-vintage vehicle with a €350m target.
Real estate mezzanine:
USA and Canada:
- Apollo Commercial Real Estate Finance closed a $130.0 million junior mezzanine loan secured by the equity interests in a portfolio of 155 healthcare properties representing 18,662 licensed beds across 20 states. The mezzanine loan is part of a $1.05 billion whole loan which consists of a $710.0 million first mortgage loan, a $165.0 million senior mezzanine loan provided by investment funds managed by subsidiaries of Apollo Global Management, LLC (together with its subsidiaries, “Apollo”) and a $175 million junior mezzanine loan, which includes ARI’s $130.0 million loan and $45.0 million of pari passu junior mezzanine loans provided by investment funds managed by Apollo. The whole loan is being used to refinance existing debt on the portfolio, which includes a $39.0 million mezzanine loan provided by ARI in 2014, which was repaid. The floating rate junior mezzanine loan has a two-year initial term with three two-year extension options and an appraised loan-to-value of approximately 62%. The junior mezzanine loan has been underwritten to generate an internal rate of return (“IRR”)(1) of approximately 12%.
- Chevy Case, Maryland-based Federal Capital Partners, a real estate investment firm, has raised $512.1 million for its third fund. FCP Realty Fund III LP will focus on multifamily and commercial properties in the Eastern U.S. FCP buys assets directly as well as through joint ventures with local operating partners through equity, preferred equity or mezzanine debt investments.
- Torchlight Investors provided $21 million of mezzanine financing to Fort Worth’s Sheraton hotel. Macquarie Group was the senior lender on the loan and the total financing reached $56M.
- J.P. Morgan Asset Management – Global Real Assets announced it is serving as investment manager for Samsung SRA Asset Management’s first U.S. office mezzanine debt fund. Samsung SRA, the real estate asset management subsidiary of Samsung Life Insurance, launched the fund to provide Korean institutional investors access to mezzanine debt on stable core office assets in six U.S. central business districts – New York, Boston, Chicago, San Francisco, Washington, DC and Los Angeles. The debut U.S. office mezzanine debt fund closed at $270 million, beating its $200 million target.
- Jared Kushner’s Kushner Companies landed $285 million senior note from Deutche Bank and a $85 million mezzanine loan from SL Green to refinance its 250,000-square foot retail condominium on West 43rd Street, New York.
- NorthMarq Capital has arranged $49.8 million in non-recourse financing for two student housing communities in North Carolina and Tennessee. The financing includes $5.5 million mezzanine loan.
- Pearlmark Real Estate provided mezzanine debt to a joint venture led by local development firm Sterling Bay to recapitalize 121 West Wacker Drive, a 41-story office building in downtown Chicago’s Central Loop. The first mortgage loan originated out of Mesa West’s open-ended Mesa West Core Lending Fund.
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