Financing Window for Middle Market Private Companies

By Dennis McCarthy – (213) 222-8260 – dennis@mbsecurities.com –

Today, middle market private companies have an unusual opportunity to raise equity capital.  If your middle market company would benefit from more equity capital, now may be the time to approach the capital markets.

Historically, we’d found that there was a practical cutoff at $5 million of EBITDA.  Private companies with less than $5 million of EBITDA generated little interest from private equity investors.

Now, while this window is open, we’re finding that middle market private companies with less than $5 million of EBITDA are getting interest from private equity investors.

In addition, we’re finding that these private equity investors may be willing to consider minority stakes in private companies.

Historically, getting a private equity group to invest in a minority position was rare.

And, to be fair, the strongest interest among private equity groups continues to be in majority investments, but we’re seeing more interest in minority stakes.

This is an attractive financing window which doesn’t come along often.

If your middle market private company would benefit from equity capital, to grow faster, pay off some debt or cash out some current shareholders, please contact me to discuss raising capital.   

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