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At APG Partners, we look to tailor the best capital solution for each company. We provide a single source of financing for recapitalizations and growth. Our investments range from $5-$30 million and will be structured as some combination of subordinated debt and equity, yielding a current rate of interest plus either a minority or majority equity participation. APG Partners is an investment partner to Capital Resource Partners, a Boston-based private equity fund with $1.1 billion of capital under management.
For over 20 years, APG Partners has successfully completed majority recapitalizations for wide range middle market companies. Our investments have generated a 117% annualized return on equity for our investors.
We look at investment opportunities as an equity investor, not a lender. Relative to other private equity investors, we believe our equity orientation provides a unique insight into investments, greater flexibility on deal structures, as well as benefits for our management partners.
APG Benefits
Our flexibility provides a number of benefits. For instance:
- Sale or Majority Recapitalizations
APG Partners will provide 100% of the financing to complete a sale or majority recapitalization valued between $10-$25 million. We do not intend to refinance our investment shortly after the closing. Rather, we look at each deal assuming that our capital structure is permanent. We believe one-stop financing provides benefits to all the stakeholders in a deal, including:
Seller Benefits
- More efficient closing process
- Greater certainty of closing
- Less uncertainty over financing
- Good steward of business
- Support for continuing business growth
Management Partners Benefits
- Certainty of financing
- Equity-oriented financing source
- Experienced investment partner
- Meaningful equity participation
Advisors Benefits
- Greater certainty of closing
- Lower financing risk
- Greater closing efficiency
Deal Sponsors Benefits
- Efficient financing process
- Meaningful equity participation
- Later-Stage Growth Financing
Our capital works best in situations where a company has accomplished its early stage business goals and long-term capital is needed for further growth. An equity investment may cause existing investors substantial dilution, but senior debt financing may not be available. Our capital will be 3-5 times less dilutive than other equity alternatives, while involving an investor whose incentives will be focused on the long-term growth of the business, its profitability and increasing equity value.
- Minority or Debt Recapitalizations
Our private equity investment structure and equity orientation fits well for family-owned or founder-led businesses that need to restructure their ownership or capital structure. It suits the needs of owners who are concerned about diluting their equity ownership, but leery of traditional lenders. Our equity orientation and incentives are structured to match the goals of the majority owners. Our capital fulfills some very specific objectives and creates a mutual benefit to increase equity value. Once a company has achieved its specific growth and profitability goals, our capital can be repaid or refinanced.
- Acquisition Financing
Many middle-market, non-asset rich companies cannot find senior debt lenders willing to finance cash-flow acquisition loans. Even if senior debt is available, it may not always make sense to use free cash flow for amortization. In cases where the rate of return on internal investment opportunities is high, companies may want to fund an acquisition with private equity capital and reinvest to achieve a higher rate of growth. Our flexible investment structures and equity incentives are well suited for these types of “growth” acquisitions.
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