Investment Strategy

NewSpring Mezzanine aims strategically to provide later-stage financing to companies that are growing rapidly, executing a merger or acquisition, or engaging in an ownership transition.

Companies seeking mezzanine financings with NewSpring must have proven track records, strong management teams, and a sustainable competitive advantage. NewSpring Mezzanine will partner with the company’s management team or with an equity group that is either sponsoring or intending to sponsor a company. NewSpring Mezzanine will work with a company regardless of whether it has prior institutional sponsorship. However, start-up companies that have not yet attained revenue, or do not meet our overall criteria, are not appropriate for this form of financing, which emphasizes financial metrics based on current cash-flow and balance sheet stability.

Operating experience is an important criteria for NewSpring Mezzanine’s investment professionals, who themselves have been officers, operators, and investors of significant companies in these industries. When evaluating management teams, they look for a strong track record of operating experience and expertise in the company’s targeted domain.

NewSpring Mezzanine finances companies primarily in the Mid-Atlantic region, comprising the states of Massachusetts to North Carolina. In this region, the core focus for financing is in Pennsylvania, New York, New Jersey, and Delaware, where the NewSpring Principals have substantial experience and business contacts.

Investment Structure:

A financing by NewSpring Mezzanine generally has the following characteristics:

• Subordinated debt with detachable warrants.
• Current pay coupon, in some cases with PIK interest.
• Applicable covenants.
• Board observation rights.
• Term of approximately five years.
• An origination fee, which is paid up-front.

NewSpring Mezzanine aims to generate stable, long-term returns for its investors over the life of the fund. Investors achieve their returns through a steady stream of cash coupons, repayment of principal, and sales or liquidity events of portfolio companies that lead to the monetizing of the warrants.