I.S. Interview: Columbia River Partners; Insights into Credit Markets with Capstone Headwaters

McGuireWoods 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.

As 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. 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&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.

Name: Greg Hawver

Title: Partner at McGuireWoods 

Specialty: Greg is focused on independent sponsors, private equity-sponsored M&A, and complex business transactions both domestic and cross-border. 

Connect: LinkedIn

Name: Richard Grant

Title: Partner at McGuireWoods

Specialty: Richard’s work involves private equity transactions, mergers and acquisitions, as well as corporate joint ventures and...