News
NEWSPRING MEZZANINE SPEAKS AT CAPITAL ROUNDTABLE EVENTS
Topics Include Mezzanine Financing on the Rebound and “Fundless” Equity Sponsors
King of Prussia, PA – November 15, 2006– Two members of the NewSpring Mezzanine Capital team recently spoke at separate Master Classes sponsored by the Capital Roundtable. Steven Hobman, General Partner of NewSpring Mezzanine Capital, spoke about the resurgence of mezzanine financing. Mr. Hobman’s Master Class discussed in detail the trend within the junior capital markets towards more traditional sources of mezzanine capital. There were three main themes discussed as reasons behind this trend.
First, rising interest rates are having a huge impact on junior capital markets. The pricing advantages previously enjoyed by floating-rate second-lien loans have just about disappeared. The result is that many deal sponsors are viewing fixed-rate mezzanine as less risky and more stable. The second trend is that increasingly, senior lenders are dictating the type of junior capital that deal sponsors should use, and cash-flow lenders for the most part are insisting on mezzanine. Finally, the trend in the senior loan market towards light covenants and other competitive techniques is also affecting mezzanine structures.
In a separate Master Class, Joseph Killackey, Principal of NewSpring Mezzanine Capital, discussed how to buy companies without having your own private equity fund. Some of the strategies mentioned included forming investor clubs to take deals to, finding investors to pay expenses to go find deals and looking at alternative ways to finance a deal. The overall message was that despite a lack of pooled capital, it is possible to buy and grow a portfolio of companies.
About Steven D. Hobman
Steve Hobman is a General Partner of NewSpring Mezzanine with more than 20 years of experience in the financing of middle-market and growth-stage companies. He has provided more than $400 million in such financing to these companies. He has been a commercial banker for 20 years at Meridian Bank, Progress Bank, and Comerica Bank. He founded TechBanc, the venture lending division of Progress Bank, which was purchased by Comerica Bank in 2002. He also co-founded Ben Franklin/Progress Capital Fund, L.P. in 1998 and NewSpring Ventures, L.P. in 1999. In addition to the MCIDC Board, Steve is also a member of the board of directors of Eastern Technology Council, Early Stage East, Neighborhood Health Agencies, Inc., American Compliance Systems, Inc., Fastech Integrated Solutions, LLC, The Matworks Company, LLC, and Rankin Corporation. He holds an A.B. from Franklin and Marshall College and an MBA from West Chester University.
About Joseph Killackey
Mr. Killackey is a Principal of NewSpring Mezzanine Capital. Before joining NewSpring, he spent 10 years as Founder and Managing Director of TRF Private Equity. Previously, Mr. Killackey spent eight years in commercial lending with TRF and CoreStates Financial Corporation. He holds a BA and a MBA from The Wharton School of The University of Pennsylvania.
About NewSpring Capital
NewSpring Mezzanine Capital is part of King of Prussia based NewSpring Capital. NewSpring Capital manages a family of private equity funds which provide growth equity and mezzanine debt financing to growth and expansion stage companies with a focus on business services, healthcare, life sciences, specialty manufacturing and technology. NewSpring Capital focuses primarily on businesses in the mid-Atlantic region and invests between $3-$7.5 million per transaction in round sizes up to $30 million. For more information about NewSpring Capital and its family of funds, visit www.newspringcapital.com.
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