On this episode of Deal-by-Deal, host Greg Hawver is joined by investment banker Derek Zacarias from DAK. Together, they explore what the next 12 months may hold for M&A relating to founder-owned businesses, private equity-backed transactions and the broader middle market. This engaging discussion explores the macroeconomic trends as well as more intricate strategies and emerging themes anticipated to play a pivotal role in the coming year. Greg and Derek also reflect on 2023, a year that saw relatively subdued M&A activity in the middle market. Finally, Derek offers valuable insights on approaches that can lead independent sponsors and other private equity professionals to success in navigating auctions and seizing M&A opportunities throughout 2024.

In this episode of Deal-by-Deal, host Greg Hawver talks to fellow McGuireWoods partner Holden Brooks about antitrust considerations for private equity investors in the middle market (and, interestingly, the lower middle market).They begin by discussing the Hart-Scott-Rodino Act, which requires pre-close filings for deals valued above $111.4 million that also meet certain other criteria — and note that some add-on strategies and other deals below this threshold may be subject to investigation by the Federal Trade Commission or Department of Justice if there are antitrust concerns.Hawver and Brooks also discuss FTC v. U.S. Anesthesia Partners and Welsh Carson a lawsuit that highlights the importance of assessing one's own acquisition conduct, being precise and accurate in communications and documents, and involving antitrust counsel in the pipeline stage of deals.Meet Your Guest Name: Holden BrooksTitle: Partner, McGuireWoodsSpeciality:  Holden is a partner in the firm’s Antitrust, Trade and Commercial Litigation Department, where her practice focuses on mergers, complex litigation, civil and criminal enforcement, and counseling across several industries with significant experience in the area of healthcare.Connect: LinkedIn ContactConnect with us on Facebook, Twitter, Instagram, YouTube.This podcast was recorded and is being made available by McGuireWoods for informational purposes only. By accessing this podcast, you acknowledge that McGuireWoods makes no warranty, guarantee, or representation as to the accuracy or sufficiency of the information featured in the podcast. The views, information, or opinions expressed during this podcast series are solely those of the individuals involved and do not necessarily reflect those of McGuireWoods. This podcast should not be used as a substitute for competent legal advice from a licensed professional attorney in your state and should not be construed as an offer to make or consider any investment or course of action.

On this episode of Deal-by-Deal, host Greg Hawver and fellow McGuireWoods partner, fund formation lawyer Rick Starling, discuss considerations and alternatives to raising a committed fund, analyze what’s going on in today’s market, and share insights on the phases of raising a fund.The episode also explores fund structures such as the "proof of concept fund" for emerging managers, highlights key differences between traditional fund economics and deal-by-deal economics, and briefly discusses operational shifts such as building out the back office and investment adviser registration.Meet Your Guest Name: Rick StarlingTitle: Partner, McGuireWoodsSpeciality: Rick is a fund formation lawyer with over 20 years of experience representing investment managers in the establishment of private funds and related products and representing institutional investors with respect to alternative investments.Connect: LinkedInContactConnect with us on Facebook, Twitter, Instagram, YouTube.This podcast was recorded and is being made available by McGuireWoods for informational purposes only. By accessing this podcast, you acknowledge that McGuireWoods makes no warranty, guarantee, or representation as to the accuracy or sufficiency of the information featured in the podcast. The views, information, or opinions expressed during this podcast series are solely those of the individuals involved and do not necessarily reflect those of McGuireWoods. This podcast should not be used as a substitute for competent legal advice from a licensed professional attorney in your state and should not be construed as an offer to make or consider any investment or course of action.

On this episode of Deal-By-Deal, host Greg Hawver is joined by Cathleen Hughes, Kroll’s Director of Corporate Finance and Restructuring, for a deep dive into due diligence, including M&A transactions and post-closing.Risks associated with M&A deals have evolved. “And these risks include those that can be discovered pre-transaction as well as risks that may not exist at the outset, but can require some continual monitoring post-close in order to mitigate the emergence of such risks.”Greg and Cathleen discuss how the due diligence process guides the successful completion of a deal. It can be divided into various phases including initial structuring diligence and confirmatory diligence. They also emphasize the importance of addressing the post-closing aspects of due diligence, which can be overlooked as investors move on to new deals. Cathleen also provides insights on due diligence categories that are often overlooked but very impactful. These include background checks, corporate culture, cyber risk, and digital chatter. Meet Your GuestsName: Cathleen HughesTitle: Director, Corporate Finance and Restructuring at KrollSpeciality: Cathleen is a director in Kroll’s Corporate Finance group, based in Chicago. She brings more than 20 years of experience to her work in M&A with a focus on financial sponsor coverage.Connect: LinkedIn Acquired KnowledgeTop takeaways from this episode Make the most of financial and accounting due diligence in M&A deals. Conduct a quality of earnings assessment prior to the transaction with a thorough corporate structure analysis. There are new due diligence options to consider. Consider background checks and investigations in diligence, especially for deals involving new markets or new-to-you categories. Consider digital chatter an early warning indicator. Monitoring online discussions and activities across various web platforms can provide insights into emerging risks before they materialize. ContactConnect with us on Facebook, Twitter, Instagram, YouTube.This podcast was recorded and is being made available by McGuireWoods for informational purposes only. By accessing this podcast, you acknowledge that McGuireWoods makes no warranty, guarantee, or representation as to the accuracy or sufficiency of the information featured in the podcast. The views, information, or opinions expressed during this podcast series are solely those of the individuals involved and do not necessarily reflect those of McGuireWoods. This podcast should not be used as a substitute for competent legal advice from a licensed professional attorney in your state and should not be construed as an offer to make or consider any investment or course of action.

On this episode of Deal-By-Deal, host Greg Hawver is joined by investment banker Hector Torres, Managing Director of DC Advisory’s global healthcare team, for a discussion on the new normal in the M&A market, especially involving the healthcare industry. Hector explains that, while market activity is starting to level out from the torrent of transactions in the second half of 2021, the lower middle market and middle market are still thriving. Flexibility is now the hallmark of successful deals, with parties increasingly creating bespoke processes to better meet their goals.Hector also provides guidance to independent sponsors and other private equity buyers seeking to win actionable deals in the current environment.Meet Your GuestsName:  Hector TorresTitle:  Managing Director at DC AdvisorySpeciality: Based in the Chicago office, Hector is a Managing Director in DC Advisory’s global Healthcare team. Hector has over 16 years’ investment banking experience, specializing in M&A and strategic advisory transactions. Before joining DC Advisory, Hector was the Co-Head of Healthcare Investment Banking at FocalPoint Partners, where he led a national team of M&A and Capital Markets professionals focused on hospitals and health systems, physician practice management, post-acute care and other related healthcare sectors.Connect: LinkedInAcquired KnowledgeTop takeaways from this episode State of play in the healthcare industry. After the last year-and-a-half’s “perfect storm” of low-cost capital, high demand for healthcare services and assets, and record levels of private equity fundraising, the market is starting to cool off again. Back to basics. Buyers and their underwriters tend to have great confidence in the viability of the investment, but Hector is seeing that lenders are scrutinizing everything in unprecedented ways. Therefore, having a credible base case and performance attribution for the growth case is vital. Maintaining flexibility. Recently, we’ve seen assets wanting to retain flexibility to only make the deals that meet all their goals, so they are “tiptoeing” into the market and being patient. This requires heavy preparation on the sell side, including putting together market studies, a full financing package, and the quality of earnings and revenue. ContactConnect with us on Facebook, Twitter, Instagram, YouTube.This podcast was recorded and is being made available by McGuireWoods for informational purposes only. By accessing this podcast, you acknowledge that McGuireWoods makes no warranty, guarantee, or representation as to the accuracy or sufficiency of the information featured in the podcast. The views, information, or opinions expressed during this podcast series are solely those of the individuals involved and do not necessarily reflect those of McGuireWoods. This podcast should not be used as a substitute for competent legal advice from a licensed professional attorney in your state and should not be construed as an offer to...

It takes nerves of steel to start a deal during COVID and exit it during the Silicon Valley Bank collapse, and today’s guests pulled it off. On this episode of Deal-By-Deal, host Greg Hawver is joined by Evan Gallinson of Merit Capital Partners and Jonathan Schilowitz of MFG Partners to present a case study of a successful relationship between an independent sponsor and a capital provider.Evan and Jonathan, who recently partnered on a successful transaction, take listeners on a deep dive into the highs and lows of their transaction. Given that they started the deal during the uncertainty of the pandemic, they found that the relationship they built beforehand was key to maintaining trust and open discussions throughout the process.This deal will not be their last partnership. Evan and Jonathan share that they have a few more things in the works right now.  Meet Your GuestsName: Evan GallinsonTitle: Managing Director at Merit Capital PartnersSpeciality: Evan joined Merit in 2005. He previously worked in Investment Banking with BMO Capital, William Blair & Company, and PriceWaterhouseCoopers, where he focused on mergers and acquisitions advisor work for middle market companies in a variety of industries.Connect: LinkedIn Name: Jonathan SchilowitzTitle: Partner at MFG PartnersSpeciality: Prior to founding MFG Partners, Jonathan was a senior investment professional at Partners Group, where he was focused on investments in the industrial sector.Connect: LinkedInAcquired KnowledgeTop takeaways from this episode How “independent sponsor” came to be. In 2006, Merit Capital found they were doing a lot of great deals with sponsors who didn’t have capital of their own. To bring everyone together, they coordinated a Fundless Sponsor Conference, which was well received, with one important piece of feedback: “don’t call us fundless.” Existing relationships help overcome challenges with new deals. There are challenges with any deal. Having past experience and rapport in successfully navigating deals, particularly in the context of remote communication during the pandemic, can be extremely helpful. Your metrics can signal your exit. Even when you have a whole playbook to keep growing a business, the market might send you different signals. ContactConnect with us on Facebook, Twitter, Instagram, YouTube.This podcast was recorded and is being made available by McGuireWoods for informational purposes only. By accessing this podcast, you acknowledge that McGuireWoods makes no warranty, guarantee, or representation as to the accuracy or sufficiency of the information featured in the podcast. The views, information, or opinions expressed during this podcast series are solely those of the individuals involved and do not necessarily reflect those...

A proposed FTC rule will change how companies do business — and how law firms give advice for the foreseeable future. On this episode of the Deal-by-Deal podcast, host Greg Hawver invites guest Holden Brooks, a partner at McGuirewoods, to share insights on recent developments for noncompetes and restrictive covenants based on the recently proposed rules. The current review period will invite comments; challenges in federal courts are likely. If approved, companies will need to be in compliance within 180 days. Holden says that companies need to begin preparing for a new landscape. “Getting wise about alternatives to noncompetes, being smart about using noncompetes that are narrowly tailored, and thinking about the long-term,” she says. “What's your strategy in a world where noncompetes may not exist or may be more vulnerable? What kind of opportunities does that present?” Later on in the episode, the conversation pivots to private equity investment in the energy space with McGuirewoods partners Tom DeSplinter, Eddy Daniels, and Brian Kelly. They review the opportunities for independent sponsors in the energy space and within the Inflation Reduction Act.  Meet Your HostName: Gregory HawverTitle: Partner at McGuireWoodsSpecialty: Greg represents private equity and strategic clients in a wide variety of change-of-control transactions, minority equity investments, domestic and cross-border acquisitions, recapitalizations, joint ventures, and corporate reorganizations, as well as advising clients on day-to-day corporate matters. Connect: LinkedInAcquired KnowledgeTop takeaways from this episode The rules for noncompetes are changing. The government had been signaling in the past year that it is looking to make changes to noncompetes. The proposed rule by the FTC takes the position that noncompetes are harmful and should be banned. Holden expects that, in the next 60 days, both sides will weigh in with comments, and challenges to the rule that may arise that affect the final outcome. Businesses need to review how they are using noncompetes. No matter what the FTC outcome is, there is going to be more scrutiny and focus on noncompetes going forward. Businesses need to consider how they can keep their noncompetes narrow, if they can use other protections instead of a noncompete, and weigh their long-term value before implementing them. The Inflation Reduction Act provides opportunity through tax credits. The act extends the tax credit scheme further than was initially expected and opens up opportunities in new areas for energy, like batteries that were previously excluded. It also expands on how to monetize tax credits so they don’t always have to be marketed to a tax investor. ContactConnect with us on Facebook, Twitter, Instagram, YouTube.This podcast was recorded and is being made available by McGuireWoods for informational purposes only. By accessing this podcast, you acknowledge that McGuireWoods makes no warranty, guarantee, or representation as to the accuracy or sufficiency of the information featured in the podcast. The views, information, or opinions expressed...

Join hosts Greg Hawver and Jeff Brooker for the second episode of a two-part series discussing critical issues and best practices for term sheets. This episode focuses on the equity term sheet between the independent sponsor and the equity capital provider. Learn about common pitfalls, what to keep in mind when negotiating terms and how to ensure alignment of investor interests.Meet Your HostsName: Gregory HawverTitle: Partner at McGuireWoodsSpecialty: Greg represents private equity and strategic clients in a wide variety of change-of-control transactions, minority equity investments, domestic and cross-border acquisitions, recapitalizations, joint ventures, and corporate reorganizations, as well as advising clients on day-to-day corporate matters. Connect: LinkedInName: Jeff BrookerTitle: Partner at McGuireWoodsSpecialty: Jeff focuses his practice on advising private equity funds, venture capital funds, and other institutional investors and strategic acquirers in connection with mergers and acquisitions, early- and late-stage investments, leveraged buyouts, recapitalizations, management buyouts, and secondary transactions.Connect: LinkedIn ContactConnect with us on Facebook, Twitter, Instagram, YouTube.This podcast was recorded and is being made available by McGuireWoods for informational purposes only. By accessing this podcast, you acknowledge that McGuireWoods makes no warranty, guarantee, or representation as to the accuracy or sufficiency of the information featured in the podcast. The views, information, or opinions expressed during this podcast series are solely those of the individuals involved and do not necessarily reflect those of McGuireWoods. This podcast should not be used as a substitute for competent legal advice from a licensed professional attorney in your state and should not be construed as an offer to make or consider any investment or course of action. 

In this first episode of a two-part series, Deal-by-Deal podcast hosts Greg Hawver and Jeff Brooker discuss best practices for M&A deal letters of intent. Both hosts have seen deals tripped up by poorly crafted letters of intent. When buyers and sellers are unclear on what to include in an LOI, what is binding and what is not, and how to leverage exclusivity, deals can go sideways before they even get a chance.  “It's a critical document, especially for independent sponsors,” explains Greg. “This is what you're showing to your capital providers, and it best describes the terms of their investment.”Listen in for advice on crafting an LOI, including what terms to include in the letter, and missteps you should watch out for. It is just as important to understand what an LOI can be used for as it is to understand what LOIs can't be used for. Jeff shares that the time investment in a well written LOI is so beneficial that lawyers are typically happy to provide a review off the clock. Be sure to check out the second episode in this series, which will cover equity term sheets between independent sponsors and capital partners. Meet Your HostsName: Gregory HawverTitle: Partner at McGuireWoodsSpecialty: Greg represents private equity and strategic clients in a wide variety of change-of-control transactions, minority equity investments, domestic and cross-border acquisitions, recapitalizations, joint ventures, and corporate reorganizations, as well as advising clients on day-to-day corporate matters. Connect: LinkedInName: Jeff BrookerTitle: Partner at McGuireWoodsSpecialty: Jeff focuses his practice on advising private equity funds, venture capital funds, and other institutional investors and strategic acquirers in connection with mergers and acquisitions, early- and late-stage investments, leveraged buyouts, recapitalizations, management buyouts, and secondary transactions.Connect: LinkedIn Acquired KnowledgeTop takeaways from this episode Balancing a desire for exclusivity without losing leverage can be a challenge. Once exclusivity is given to a seller, so is some of the leverage within that deal. The majority of an LOI is not going to be binding. An LOI includes the terms related to the purchase price, deal structure, and the party’s understanding of the deal at that moment in time, with the understanding that the deal may change. There are key terms an LOI should cover to avoid miscommunication. Work with your lawyer to ensure any LOI you’re putting together includes key terms. These include exclusivity and the structure of the transaction. ContactConnect with us on Facebook, Twitter, Instagram, YouTube.This podcast was recorded and is being made available by McGuireWoods for informational...

There’s a secret on how to secure more — and better — deals as an independent sponsor: build relationships and trust with your lenders.&nbsp;This may seem fairly obvious, but the reality is as the market has become more concentrated with traditional private equity funds, we’re losing this important part of dealmaking. And as the market remains uncertain, those relationships are going to be crucial for survival as an independent sponsor.Approaching lenders as partners ensures a better outcome and establishes an “understanding that the lender is going to work as a partner to the extent that they can and [make] sure that the deal is done,” said Brian P. Coughlan of McGuire Woods’ Corporate and Private Equity Group.In this episode of Deal-by-Deal, the hosts are joined by Brian, as well as Joe Rodgers of Source Capital, LLC, to discuss how to approach debt lenders and how to get the most out of those deals. They also explore the state of the current lending market, and how independent sponsors should approach deals in a time of uncertainty.&nbsp;Featured GuestsName: Joe RodgersTitle: Managing Director at SourceCapital, LLCSpecialty: As managing director at SourceCapital, a lower-middle-market investing fund, Joe helps lead the credit strategy arm of the investment team.Connect: LinkedIn&nbsp;Name: Brian P. CoughlanTitle: Partner at McGuireWoodsSpecialty: As a partner in McGuireWoods’ Corporate and Private Equity Group since 2017, Brian represents investment funds and strategic acquirers in connection with mergers, acquisitions, investments, divestitures, and other strategic and financial investment activities, with a particular focus on debt financing structures.Connect: LinkedInAcquired KnowledgeTop takeaways from this episode&nbsp;Approach debt deals as a partnership. As debt equity becomes more commoditized by a growing concentration of traditional private equity funds, one of the most important parts of the process is getting lost: relationship building. As the market continues to spiral into uncertainty, strong relationships with a variety of lenders could be a deciding factor in securing a deal.&nbsp;Get early leads from your debt providers. Debt lenders love looking at deals at every stage of the process. But as an independent sponsor, communicating with your providers early on will give them more time to prepare and iron out any potential issues, giving you a better chance of winning the deal.The cost of deals may be going up. We still don’t know how the market will be permanently impacted by the economic tumult of recent years, but we do know that good deals are still going to happen. Independent sponsors should be prepared that costs of those deals will go up, but they might not necessarily remain high forever.&nbsp;ContactConnect with us on Facebook, Twitter, <a...

Facilitating introductions between independent sponsors and capital partners who can fund their deals is the first step in a successful M&amp;A scenario. Knowing how to efficiently leverage relationships and get in front of the right people is key to getting deals done.&nbsp;Christian Berger joins this episode of Deal-by-Deal to share how introductions play into business development and his approach to the process.&nbsp;“We [make introductions] to help our clients, prospective clients, and others in our network meet each other and find opportunities that they otherwise wouldn't have seen,” Christian explains. Ultimately the goal of making introductions is to complete successful private equity partnerships.&nbsp;Also on this episode, get insights into the best way to approach finding introductions. Christian shares how to calculate the number of introductions you might need by sharing his three assumptions for finding investors, and outlining what a capital firm considers a strong deal.&nbsp;Christian and Greg also share details on the upcoming McGuireWoods Independent Sponsor Conference in Dallas. The conference is an opportunity to see firsthand what makes McGuireWoods a collaborative firm that knows how to leverage relationships to make the right introductions.&nbsp;&nbsp;Featured GuestName: Christian BergerTitle: Partner at McGuireWoodsSpeciality: Joining McGuireWoods in 2015, Christian focuses on helping new and existing clients in the firm’s private equity practice. He has received a number of industry awards, including the Most Innovative Law Firm in the Business of Law from the Financial Times in 2018, and Executive of the Year by Legal Sales and Service Organization in 2018.Connect: LinkedIn&nbsp;Acquired KnowledgeTop takeaways from this episode&nbsp;★ The investor introduction process. Facilitating investor introductions is part of business development. It’s a way to connect with clients who are doing M&amp;A deals that need legal counsel. A firm like McGuireWoods helps guide independent sponsors to get a clear understanding of the opportunity and find the right investors for their unique position. &nbsp;★ Attributes that make an independent sponsor attractive to a fund. These funds are looking for someone who has an attractive opportunity requiring capital that matches the needs of their fund. It’s common to see single transactions in the 20 million dollar range, with many private equity firms looking to make 10 transactions out of a single fund. It’s important to have a clear identity that allows firms to match what you need with the box they’re looking to fill.&nbsp;★ Three assumptions when finding investors for a deal. First, what is the target check size for the investors? Secondly, what percentage of investors will accept an introductory call from an independent sponsor? Third, how many investors will be willing to invest in a deal? Asking these questions allows you to work backward and determine how wide you need to cast your net.&nbsp;ContactConnect with us on Facebook, Twitter, <a href="https://www.instagram.com/mcguirewoods_llp" rel="noopener...

Independent sponsors have evolved to become a separate asset class offering value to the ecosystem within the realm of private equity.On this episode of Deal-by-Deal, hear McGuireWoods’ Jon Finger share his insights on the evolution of independent sponsorship and recent noteworthy developments. There have been larger deals, more hybrid structures, and an increased interest in first-time funds from within the independent sponsor space.With his experience in the independent sponsor space, Jon offers advice for emerging fund managers looking to raise their first committed fund.“Having a broad set of references from different parts of the deal ecosystem is important to show LPs,” Jon says of the key steps independent sponsors need to prepare for when raising a first-time fund.Also on this episode of Deal-by-Deal, Jon and Jeff review what independent sponsors need to consider when it comes to their current deals. Including if they can roll them into a fund: “One of the key pieces is the deal pipeline, and providing LPs with that demonstrated ability to put money to work in a meaningful fashion relatively quickly,” Jon explains.&nbsp;&nbsp;Featured GuestName: Jon W. FingerTitle: Partner at McGuireWoodsSpeciality: Jon’s practice focuses on private equity and corporate transactional matters, including mergers and acquisitions, fund formation, securities offerings, and corporate governance initiatives.Connect: LinkedIn Acquired KnowledgeTop takeaways from this episode&nbsp;★ The independent sponsor space is maturing. Over the past decade, the independent sponsor space has moved from individuals making deals at country clubs to being a valuable part of the ecosystem. As independent sponsors have matured, the deals have grown in value and begun to encompass more hybrid structures.&nbsp;★ The criteria to become a successful independent sponsor fund manager. More and more independent sponsors are looking to raise committed funds. To be a successful emerging manager, an individual will need to have previous successful exits, the ability to articulate their ESG focus, and the support needed to scale the fund.&nbsp;★ Key steps to consider when raising a fund. Reference checks are extremely important to LPs and for any independent sponsor considering raising a fund, it’s important to have a diverse lineup of references ready. Also, consider what investors are right for your fund and which backgrounds or specialties will drive the most value for you.ContactConnect with us on Facebook, Twitter, Instagram, YouTube.This podcast was recorded and is being made available by McGuireWoods for informational purposes only. By accessing this podcast, you acknowledge that McGuireWoods makes no warranty, guarantee, or representation as to the accuracy or sufficiency of the information featured in the podcast. The views, information, or opinions expressed during this podcast series are solely those of the individuals involved and do not necessarily reflect those of McGuireWoods. This podcast should not be used as a substitute for competent legal advice from a licensed professional attorney in your...

There’s a lot that companies need to consider when deciding to pursue independent financial backing.&nbsp;The decisions companies make when striking deals almost always come back to control — a factor that has a significant impact on the future of the company. Depending on how much control the backer negotiates, different scenarios could lead to backers gaining significant veto rights, board control, or a total loss of management fees.The process is complex and involves many moving pieces. That’s why we brought Alexander Horn and Anne Croteau — seasoned independent sponsor deal negotiators — on today’s episode of the podcast.“A financial investor is going to want to have some control over any big corporate decision above a certain monetary threshold. [But] they don't want to get into the day-to-day and they don't want to get into the nitty-gritty … that's not their focus. It takes them away from their main focus, which is finding additional investment,” says Anne.&nbsp;On this week’s episode of Deal-by-Deal, Anne and Alex walk us through what considerations should be made when discussing independent sponsor deals and what’s at stake.Featured GuestsName: Alex HornTitle: Partner at McGuireWoodsSpecialty: Alex is focused on private equity and other finance transactions. In the past, he has represented business development companies (BDCs), small business investment companies (SBICs), and other private debt funds.Connect: LinkedIn&nbsp;Name: Anne CroteauTitle: Partner at McGuireWoodsSpecialty: Anne is focused on private equity and other financing transactions, mergers and acquisitions, and general corporate matters. She has represented lenders in first lien, unitranche, second lien and mezzanine credit facilities, equity co-investments, and kickers. She has experience advising on intercreditor relationships, capital structures, and complex restructurings.Connect: LinkedInAcquired KnowledgeTop takeaways from this episode&nbsp;★&nbsp;&nbsp;&nbsp;&nbsp;Negotiations are all about control. Different types of partners will have different outcomes and control issues: a family office might offer pure equity while a lender like a small business investment company will instead require significant equity backing. The type of partner will determine the level of control it has over your company: for example, large-scale and influential financial backers are likely to require significant control of your board as well as asking for veto rights and involvement in major financial decisions.★&nbsp;&nbsp;&nbsp;&nbsp;Corporate sponsors generally don’t want to be involved in management. While corporate sponsors might have a significant amount of control, they don't want to be involved in the daily details. An independent sponsor’s main job is to find good investments.★&nbsp;&nbsp;&nbsp;&nbsp;Consider the interests of every financial backer. Dealing with equity backers and debt financial backers could result in conflicts of interest if the interests of all parties are not taken into consideration when these deals are initially made. In some cases, management fees could be lost or a debt could go into default.Episode Insights[00:29] Meet our...

In this final episode of Deal by Deal for 2021, Matt Heinz, Partner &amp; Co-Practice Leader, Transaction Liability at Lockton Companies, joins the podcast to share the outlook on representations and warranties insurance.As the fourth quarter of the year comes to a close, Matt has insights into how the robust M&amp;A activity we’ve seen will impact the insurance market moving forward, as well as the challenges those in the industry are facing.“We've arrived at a scenario where we have more demand than supply from the insurance market,” Matt says on this episode — referencing how demand combined with the increasing claim environment is leading to an increase in prices.Also on this episode, a presentation excerpt from McGuireWoods Partners Greg Hawver and Jeff Brooker from the McGuireWoods Independent Sponsor Conference in October. The presentation titled, “What is Market with Respect to Independent Sponsor Deal Economics?” covers the independent sponsor survey. The excerpt in this episode covers the portion on closing and management fees.Meet Your HostsName: Gregory HawverTitle: Partner at McGuireWoodsSpecialty: Greg represents private equity and strategic clients in a wide variety of change-of-control transactions, minority equity investments, domestic and cross-border acquisitions, recapitalizations, joint ventures and corporate reorganizations, as well as advising clients on day-to-day corporate matters.Connect: LinkedIn&nbsp;Name: Rebecca Brophy&nbsp;Title: Partner at McGuireWoodsSpecialty: Rebecca focuses her practice on advising private equity funds, other institutional investors, and strategic acquirers in connection with mergers and acquisitions and other complex business transactions.&nbsp;Connect: LinkedIn&nbsp;Name: Jeff BrookerTitle: Partner at McGuireWoods&nbsp;Speciality: Jeff focuses his practice on advising private equity funds, venture capital funds and other institutional investors and strategic acquirers in connection with mergers and acquisitions, early- and late-stage investments, leveraged buyouts, recapitalizations, management buyouts and secondary transactions.Connect: LinkedInMeet Your GuestName: Matthew HeinzTitle: Partner &amp; Co-Practice Leader, Transaction Liability at Lockton CompaniesSpeciality: Matt’s name is synonymous with ​​transaction liability insurance for M&amp;A professionals across the country. He has served as both an underwriter and broker during his time in the industry. Before joining Lockton, Matt served as a Senior Managing Director and Co-Practice Leader of Aon’s North American transaction liability team.&nbsp;Connect: <a href="https://www.linkedin.com/in/matthew-heinz-0347973/" rel="noopener noreferrer"...

You could do very well in large-cap, private equity by consistently generating solid returns at scale and volume. It’s great for large institutions and PEs that have the time and resources to compete at slews of auctions and zoom through portfolio after portfolio to close deals, quarter after quarter.After years in this kind of environment, Harry Eichelberger of Archimedes Health Investors found independent sponsorship in physician provider services to be more exciting, more personalized, and more entrepreneurial. On this episode of the podcast, he discusses his approach to healthcare investment and how he came to focus on physician services.Also on this episode of Deal-by-Deal, hear from McGuireWoods Partner Holly Buckley on digital healthcare and healthcare IT.“We will continue to see an increase in traction on deals in healthcare IT, and there’s going to be a real race to consume the valuable assets in that sector,” Holly says.The demand has never been greater for fully invested, sustainable healthcare. COVID just brought it all to the forefront. Yet considering the events of the past year and a half, the healthcare niche is even more relevant than ever for the independent sponsor.Meet Your HostsName: Rebecca BrophyTitle: Partner at McGuireWoodsSpecialty: Rebecca focuses her practice on advising private equity funds, other institutional investors, and strategic acquirers in connection with mergers and acquisitions and other complex business transactions.Connect: LinkedIn&nbsp;&nbsp;Name: Holly BuckleyTitle: Partner at McGuireWoodsSpecialty: Holly focuses her practice on corporate healthcare transactional work and regulatory matters. She primarily counsels private equity funds and healthcare clients and is Chair of the firm’s Healthcare Department.&nbsp;Connect: LinkedInMeet Your GuestName: Harry Eichelberger&nbsp;Title: Founder and Managing Partner of Archimedes Health InvestorsSpecialty: Harry was a healthcare private equity, growth capital, and venture capital investor before founding Archimedes Health Investors, a private equity firm, focused on healthcare, in 2015.Connect: LinkedInAcquired KnowledgeTop takeaways from this episode★&nbsp;&nbsp;&nbsp;&nbsp;For a successful physician practice management venture, focus on alignment. The healthcare space went through two major rollups, one in the 1990s and one in the early 2000s. During those years, the relationship between management and physicians was strictly transactional, and during these downturns, their bonds quickly ruptured. When management treats physicians like true partners, they share incentives, are invested in each other’s progress and are positioned for long-term growth.★&nbsp;&nbsp;&nbsp;&nbsp;Bet on Healthcare IT. COVID brought the forward movement of healthcare IT and digital healthcare, but this sub-sector of healthcare has been gaining traction for some time due to demographic shifts. These include: aging Baby Boomers, a declining...

The end of the COVID-19 pandemic seemed to be on the horizon until the Delta variant showed up, bringing with it the potential to shake up the deals market once again.As the end of the year approaches, dealmakers have to navigate the ongoing unknowns of the pandemic along with the other factors that are tightening the pressure valve on M&amp;A this year.“I suspect this year is going to be just as tight [as last year], if not tighter,” Rebecca Brophy says on this episode of Deal by Deal, talking about the haste at which dealmakers will need to get things closed while operating under a breakneck volume of deals.Also on this episode, hear from DuneGlass’ Ryan Graham and Daniel Hosler about why they made the switch to independent sponsorship from private equity: “We tried to build something a little more founder-centric,” Ryan says.With their focus on healthcare services and medical practices, Ryan and Daniel share their thoughts on healthcare investment opportunities.&nbsp;Meet Your HostsName: Gregory Hawver&nbsp;Title: Partner at McGuireWoods&nbsp;Specialty: Greg represents private equity and strategic clients in a wide variety of change-of-control transactions, minority equity investments, domestic and cross-border acquisitions, recapitalizations, joint ventures and corporate reorganizations, as well as advising clients on day-to-day corporate matters.&nbsp;Connect: LinkedIn&nbsp;Name: Rebecca Brophy&nbsp;Title: Partner at McGuireWoods&nbsp;Specialty: Rebecca focuses her practice on advising private equity funds, other institutional investors and strategic acquirers in connection with mergers and acquisitions and other complex business transactions.&nbsp;Connect: LinkedIn&nbsp;Name: Jeff BrookerTitle: Partner at McGuireWoods&nbsp;Speciality: Jeff focuses his practice on advising private equity funds, venture capital funds and other institutional investors and strategic acquirers in connection with mergers and acquisitions, early- and late-stage investments, leveraged buyouts, recapitalizations, management buyouts and secondary transactions.&nbsp;Connect: LinkedIn&nbsp;Meet Your GuestsName: Thomas J. DeSplinterTitle: Partner at McGuireWoods&nbsp;Speciality: Tom is an accomplished dealmaker and partner in the firm’s M&amp;A and Corporate Transactions Department.&nbsp;Connect: LinkedIn&nbsp;&nbsp;Name: Ryan Graham&nbsp;Title: Managing Partner and Founder at <a href="https://duneglasscapital.com/"...

Scott Fisher has been in the independent sponsor field for quite some time, and has learned a lot along the way.&nbsp;As the Managing Director at Pleasant Bay Capital Partners, a private equity firm focused on investing in lower-middle market companies in the healthcare, technology, business services, and industrial products &amp; services sectors, he has helped bring value to both sellers and capital providers.“We think sellers value [our vertical focus]. We understand the sector they’re in, we understand their business, and I think we can convince them we can be helpful post-close,” Scott says of Pleasant Bay’s standout strategies to close deals.“And I think [capital providers] look to us because we do have deep sector expertise and a lot of these folks don't have that,” he says on this episode of Deal-by-Deal. “Healthcare is a tricky field, and if you haven't spent a lot of time in it, it can be a little bit of a nerve wracking place to invest. So I think that's important. And at the end of the day, we are bringing value and are able to provide value post-close and I think that's what a lot of capital providers are looking for.”Tune into this episode to hear Scott’s tips for people interested in starting as an independent sponsor field. He offers strategies for how to cultivate strong relationships with businesses and potential capital providers as well as get the most juice out of a deal.The episode also covers the pros and cons of doing deals with multiple capital providers and the importance of carving out a niche for yourself as an independent sponsor.The last 10 minutes of the episode preview findings from the Independent Sponsor Deal Survey, which will be fully released at the fourth annual Independent Sponsor Conference.&nbsp;&nbsp;Meet Your HostName: Jeff BrookerTitle: Partner at McGuireWoods&nbsp;Specialty: Jeff focuses his practice on advising private equity funds, venture capital funds and other institutional investors and strategic acquirers. He specializes in mergers and acquisitions, early- and late-stage investments, leveraged buyouts, recapitalizations, management buyouts and secondary transactions.Connect: LinkedIn&nbsp;Meet Your GuestName: Scott FisherTitle: Managing Director at Pleasant Bay Capital Partners&nbsp;Specialty: Scott has more than 17 years of experience in private equity, M&amp;A, and corporate strategy and has worked primarily in the healthcare and life sciences sectors.&nbsp;Connect: LinkedIn&nbsp;Acquired KnowledgeTop takeaways from this Deal-by-Deal episode&nbsp;★&nbsp;&nbsp;&nbsp;&nbsp;Find a niche and distinguish yourself instead of aiming for huge transactions right off the bat. As the interest in independent sponsorship increases, there is more of a supply of investors that a business might choose to work with — so you’ll need to stand out. You don’t need to get the biggest deals right away: it will look better to...

The independent sponsor model of investing is becoming more popular with investors and businesses looking for a more flexible partnership than what the private equity model allows.But for those interested in getting started as an independent sponsor, getting to the point where you have the capital to invest and businesses that are willing to partner with you can seem daunting.“The fact is, this is a tough world to go out and get your first few deals done, and it takes time,” says John Huhn, Managing Partner at Compass Group Equity Partners, St. Louis-based independent sponsor focused on middle- and lower-market transactions in niche manufacturing and consumer services.But with help from people like John, would-be independent sponsors can get a leg up in the field.On this episode of Deal-by-Deal, John talks to hosts Rebecca Brophy and Jon Finger about how he got involved in independent sponsorship and where he thinks the investing model is going.Tune in to hear about how to get started as an independent sponsor, what kind of financial and legal terms you should keep in mind when making deals, and how to find the partners and capital providers: the “right people, with the right appetite, the right check size, and the right time.”You’ll also hear about the different ways an independent sponsor can partner with a business, and how to harness the power of the independent sponsor community to learn and grow in your field.&nbsp;Meet Your HostsName: Rebecca BrophyTitle: Partner at McGuireWoods&nbsp;Specialty: Rebecca focuses her practice on corporate transactions, including mergers and acquisitions, equity and debt offerings, venture capital financings and strategic collaborations.&nbsp;Connect: LinkedIn&nbsp;Name: Jon Finger&nbsp;Title: Partner at McGuireWoods&nbsp;Specialty: Jon Finger's practice focuses on private equity and corporate transactional matters, including mergers and acquisitions, securities offerings and corporate governance initiatives.Connect: LinkedIn&nbsp;Featured GuestName: John Huhn&nbsp;Title: Managing Partner, Compass Group Equity Partners&nbsp;Specialty: John has 25 years of experience in private equity, entrepreneurism and strategic consulting that he brings to his work as an independent sponsor.Connect: LinkedIn&nbsp;Acquired KnowledgeTop takeaways from this Deal-by-Deal episode&nbsp;★&nbsp;&nbsp;&nbsp;&nbsp;Get clear on your preferred role in an investment partnership. Some independent sponsors are okay with a more hands-off approach once they’ve set their financial and legal terms with the business, while others are really intent on being a part of that business’ executive team, making sure strategic initiatives are implemented and providing oversight. There’s a...

NewsMcGuireWoods is pleased to announce that the pre-eminent gathering for independent sponsors and capital providers returns to Dallas this October.Don’t miss the opportunity to gain knowledge and insights during our panel discussions, including results from our largest proprietary deal points study to date, and our much-anticipated networking events. Connect one-on-one in our efficient speed-dating segment, which produced more than thousands of meetings during our 2019 conference. For information, please visit here.Episode SummaryAs an independent sponsor, there are a lot of variables that come into play. Which businesses are worth acquiring and working with? What’s the best strategy to go about that? And is it worth the risk?On this episode of Deal by Deal (yes, we’ve changed the name!), Greg Hawver and Richard Grant, Partners at McGuireWoods, tease out the lessons from investor success stories.As Columbia River Partners’ Poneet Goel puts it, “cost structure perspective, as well as an operational efficiency perspective” are key.&nbsp;Understanding what is needed for growth, be it new technology or carving out a specific division of the company, can be the difference between failure and rapid success. It can also be the difference between being a stalking horse or just not being able to raise the capital needed.Whether you go to traditional independent sponsor backers or your network of investors, there is always a new tactic to learn, and honesty about the good and the bad will strengthen your position in the end.“I think maybe there's an important lesson there,” Richard says, “which is the importance of going out to the investment community … in any deal and being candid and frank about risk versus opportunity, upside, downside, where all the skeletons are.” No one will succeed with skeletons in the closet and being frank about the risks versus the upsides is discussed in a candid manner, much like how it should be discussed with clients and investors themselves.The second half of the episode features Brad Harrop of Capstone Headwaters and McGuireWoods’ Brian Coughlin discussing debt finance. Be it negotiating M&amp;A and upstream equity documents or working on the credit agreement, understanding this part of the deal process is critical to overall investment knowledge. Also discussed is the effect COVID-19 has had on the market.“[T]he terms that we might've expected at maybe a slightly lower leverage or slightly higher EBITDA are now starting to show up where they're slightly higher leverage or they're slightly lower EBITDA,” Brian explains.Tune in to this episode of Deal by Deal to hear the intrepid and unique ways independent sponsors are taking the investing world by storm.&nbsp;Meet Your HostName: Greg HawverTitle: Partner at McGuireWoods&nbsp;Specialty: Greg is focused on independent sponsors, private equity-sponsored M&amp;A, and complex business transactions both domestic and cross-border.&nbsp;Connect: LinkedIn&nbsp;&nbsp;Featured GuestsName: Richard GrantTitle: Partner at McGuireWoodsSpecialty: Richard’s work involves private equity transactions, mergers and acquisitions, as well as corporate joint ventures and...

What happens when a letter of intent (LOI)&nbsp;doesn’t accurately capture the economics of a deal?How can you, as an independent sponsor,&nbsp;understand “what’s market” for the three fundamental building blocks of the independent sponsor economic package – management fees, closing fees and carried interest?&nbsp;These questions and others pertinent&nbsp;to independent sponsors and professionals who employ the independent sponsor model are the kind of topics to be explored on Carried Interest, a new podcast from the legal experts at McGuireWoods.&nbsp;The inaugural episode of the podcast opens with McGuireWoods Partners Greg Hawver, Rebecca Brophy, and Jeff Brooker sharing lessons learned working on middle-market private equity M&amp;A at the ground level. Later on, McGuireWoods Partner Bryan Bylica joins the podcast to share important updates about the expansion of the PPP program.As the episode kicks off and the partners trade “war stories,” Jeff highlights an incident when an LOI wasn’t consistent with the waterfall calculations (and how it was ultimately resolved).“We really did spin our wheels with a bunch of changes, trying to draft an LOI that didn't reflect the business deal,” he recalls “And then the LOI was not as advantageous to the independent sponsor as a traditional carry would have been,” he says on the podcast.The lesson? Don’t try this (drafting an LOI) at home. Legal assistance can help a deal move more smoothly and there’s a huge advantage to having efficient documentation from the start.&nbsp;&nbsp;Tune in to this episode to learn the three components of a conventional independent sponsor deal, to gain an understanding of recent trends in the PPP loan program, and hear&nbsp;other lessons learned “in the trenches” of middle-market M&amp;A.Meet Your HostsName: Rebecca BrophyTitle: Partner at McGuireWoodsSpecialty: Rebecca focuses her practice on corporate transactions, including mergers and acquisitions, equity and debt offerings, venture capital financings and strategic collaborations.Connect: LinkedIn&nbsp;Name: Greg HawverTitle: Partner at McGuireWoodsSpecialty: Greg focuses his practice on private equity-sponsored M&amp;A and other complex business transactions.Connect: LinkedIn&nbsp;Name: Jeff BrookerTitle: Partner at McGuireWoodsSpeciality: Jeff focuses his practice on private equity and venture capital funds and institutional and strategic investors in connection with mergers and acquisitions, early- and late-stage private equity and venture capital investments, leveraged recapitalizations, management buyouts and secondary transactions.Connect: LinkedIn&nbsp;Featured GuestName: Bryan BylicaTitle: Partner at McGuireWoodsSpeciality: Bryan focuses on...

Welcome to Deal-by-Deal, an Independent Sponsor Podcast by McGuireWoods. Deal-by-Deal invites you to the conversations with experienced independent sponsors and professionals who employ the independent sponsor model. Join Greg, Jeff, and Rebecca as they explore middle-market Private Equity M&amp;A to provide you with timely insights and relevant takeaways.Through a mix of educational episodes and interviews with seasoned independent sponsors, our hosts will provide substantive guidance on deal work for independent sponsors and professionals who employ the independent sponsor model.McGuireWoods is a full-service firm providing legal and public affairs solutions to corporate, individual, and nonprofit clients worldwide for more than 200 years collectively. Our commitment to excellence in everything we do gives our clients a competitive edge in everything they do. Our law firm, over its 186-year history, has earned the loyalty of our many long-standing clients with a deep understanding of their businesses, and broad skills in corporate transactions, high-stakes disputes, and complex regulatory and compliance matters.To learn more about McGuireWoods or to contact us, please visit our website at mcguirewoods.com.This podcast was recorded and is being made available by McGuireWoods for informational purposes only. By accessing this podcast, you acknowledge that McGuireWoods makes no warranty, guarantee, or representation as to the accuracy or sufficiency of the information featured in the podcast. The views, information, or opinions expressed during this podcast series are solely those of the individuals involved and do not necessarily reflect those of McGuireWoods. This podcast should not be used as a substitute for competent legal advice from a licensed professional attorney in your state and should not be construed as an offer to make or consider any investment or course of action.