So far 2011 is turning out to be a great year if you are an equity firm. Assuming that you are one of the dozens of equity firms sitting on accumulated cash (on a combined basis it is estimated that U.S. equity firms have nearly $500 billion to invest), you are making a much more aggressive play for deals than you did in 2009 and 2010. And most interestingly, if you are like most of the equity firms that are active in the market, you are looking for smaller deals. As we have discussed before, equity firms find the middle market really attractive. According to , during the first quarter of 2011, more than 40% of the deals closed by equity firms were valued below $50 million and nearly 80% were below $250 million. [Read more…]
Earlier this month, Clearview Capital announced that its platform company, Senior Care Centers of America, Inc. had made an add-on acquisition. By acquiring the adult daycare division of Beelong Adult Day Services, Clearview Capital made its eighth add-on acquisition to this platform in six years. An add-on is an acquisition funded by an investment firm that is “added on to” or “bolted on to” an existing platform company. In this case, Senior Care Centers is the platform that Clearview Capital is clearly building into a larger entity. Keep in mind that strategic buyers also acquire companies using a variation of an add-on strategy to grow as well. [Read more…]
Last week Riverside Company, a Cleveland-based private equity firm, announced that it had acquired Alliance1, a freight hauling company based in Nashville, Tennessee, to add to an existing platform company called Express Courier, also based in central Tennessee. Both companies manage time-sensitive deliveries throughout the southeastern U.S. Although, as we have seen before, the details of this transaction were not released, the strategic thinking behind the deal is fairly clear based on the press release and company websites.
Because we have to ask ourselves, if the [Read more…]is growing so slowly, why would an equity firm continue to expand its holdings in the transportation industry? Maybe, just maybe, Riverside has a much better view of the longer-term growth of this country than the media does.
Quite a few middle-market business owners are still under the mistaken belief that private equity firms (PE firms) only invest in mega-deals in the billion-dollar range. Because these larger deals tend to get all the press, it is understandable why middle-market business owners have this common misconception. [Read more…]