A VIEW OF 2022: FLORIDA SPONSOR DEAL REPORT
A VIEW OF 2022: FLORIDA SPONSOR DEAL REPORT
THIS INFOGRAPHIC REPORT AND ALL ASSOCIATED CHARTS, PREPARED BY CASSEL SALPETER & CO. WITH DATA FROM PITCHBOOK AS OF DECEMBER 31, 2022, PROVIDES A TOP-LEVEL EXAMINATION OF SPONSOR ACTIVITY IN FLORIDA. IT OFFERS IN-DEPTH INSIGHT AND DATA-DRIVEN ANALYSIS OF THE STATE’S SPONSOR TRENDS, WITH A FOCUS ON DEAL FLOW ACTIVITY. THIS REPORT INCLUDES ALL SPONSOR INVESTMENTS (INCLUDING BUYOUT, ADD-ON, GROWTH, AND RECAPITALIZATION), EXCLUDING REAL ESTATE INVESTMENTS, MADE INTO TARGET COMPANIES WITH HEADQUARTERS IN FLORIDA.
Pitchbook has changed its methodology for recording deal activity that will apply to this and all future sponsor reports. All announced deals will be included in the reporting of total deal activity in addition to completed deals, and announced dates will be used to reflect deal timing in lieu of closing dates.
DATA AS OF DECEMBER 31, 2022
FOUNDED IN FLORIDA OVER 10 YEARS AGO
Florida Sponsor Deal Flow by Year
While Florida sponsor deal flow slowed a bit relative to the prior year in 2021, activity still remained robust compared to historical norms. The higher interest rates and lower multiples no doubt played a factor in the slight slowdown, but sponsors found a way to keep deal flow well above historical paces with smaller deals, which are currently easier to finance.
2011 2 0 1 2 2 0 1 3 2014 500 400 600 700 800 300 200 100 0 2015 2018 2019 2020 2021 2016 2017 2022 183 600 241 209 262 298 288 352 366 376 428 661
Florida Sponsor Deal Flow by Region
Not much has changed over the years as it relates to sponsor deal flow by region in Florida. The Southeast has consistently been, as expected, and remains, the region with the highest number of sponsor deals in any given year, accounting for 40% of total sponsor deals in 2022. The Central and Tampa Bay regions followed accounting for approximately 20% and 19%, respectively. The Southwest, Northeast, and Panhandle accounted for the least amount of sponsor deal activity, with approximately 10%, 7%, and 4%, respectively.
SOUTHWEST SOUTHEAST PANHANDLE NORTHEAST CENTRAL
TAMPA BAY
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 10% 0% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2021 2022
Florida Sponsor Deal Flow by Quarter
The first three quarters of 2022 were in line with the robust deal flow we saw in 2021. The record-breaking fourth quarter of 2021 is what set the two years apart as 4Q 2022 only saw 122 deals compared to the 196 of 2021. It will be interesting to see how the first half of 2023 turns out. With Add-Ons continuing to be an active part of the marketplace, and the lower middle market appears to be holding up better than the general middle market so far in 2023.
0 50 200 2021 2020 2019 201 8 2017 201 6 201 5 201 4 2013 2012 2011 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 3Q 4Q 1Q 2Q 155 54 61 45 82 55 37 85 73 60 70 71 62 57 53 81 57 71 85 61 90 88 78 115 82 98 104 88 95 89 112 71 80 165 96 81 66 58 50 50 27 161 155 142 168 196 100 150 2022 162 122
Florida Sponsor Deal Flow by Type
LEVERAGED RECAPITALIZATION
GROWTH/EXPANSION BUYOUT/LBO
2021
Sponsor Add-Ons drove Florida deal activity in 2022, consistent with years past. Sponsor Add-Ons accounted for approximately 59% of Florida sponsor deal activity in 2022, the same percentage as in 2021. Sponsor Buyout/LBO and Growth/Expansion accounted for approximately 20% and 19%, respectively. It is interesting to see the percentage of sponsor Buyout/LBOs fall year-over-year; solidifying the fact that deals are still getting done, just smaller in size.
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
ADD-ON PLATAFORM CREATION
10% 0% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2022
Florida Sponsor Deal Flow by Sector
B2B remained the dominant sector for sponsor deal activity in 2022, accounting for approximately 36%. Of significant note, B2C percentage rose significantly in 2022, accounting for approximately 21%, surpassing Healthcare, at approximately 16%, for the first time since pre-pandemic. IT and Financial Services both remained steady at approximately 14% and 10%, respectively, while Materials and Resources and Energy lagged behind the group at approximately 2% and 1%.
2011 2012 2013 2014 2015 2016 2017 10% 0% 20% 30% 40% 50% 60% 70% 80% 90% 100% MATERIALS & RESOURCES IT HEALTHCARE FINANCIAL SERVICES ENERGY B2C B2B 2018 2019 2020 2021 2022
Sponsor Add-Ons as a percentage of all Florida sponsor control investments hit an all-time high in 2022, accounting for 75.3%. As Add-Ons tend to be smaller deals for sponsors, this makes a lot of sense given what we have reported in this report thus far.
Flo rid a Buyout s v s. Add- O n s
0 50 100 150 200 250 300 350 400 450 0% 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % 356 184 207 101 207 89 241 107 80 59 137 64 119 78 101 51 152 81 135 97 88 2022 2011 2012 2013 2014 2015 2016 2017 B U Y O U T / L B O A D D - O N A D D - O N % 2 0 1 8 2 0 1 9 2 0 20 391 139 2 0 21 67.6% 67.2% 58.2% 68.2% 66.4% 60.4% 75.3% 69.3% 65.2% 69.9% 73.8% 57.6% 117 90 %
Sponsor Backed Florida Companies by Year
Florida sponsor-backed company inventory continued to grow, with an additional (net) 69 new Florida sponsor-backed companies. This growth is significant compared to what we reported in 2021 at 15 (net) new Florida sponsor-backed companies.
2015-2022 2009-2014 Total 2000-2008 YEAR OF INVESTMENT 0 200 400 600 800 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 98 114 133 145 290 301 332 353 392 406 589 637 690 199 253 432 458 494 543 561 Pre-2000 759 163
Florida Sponsor Exits by Type
Coming in at approximately 52% and continuing with the trend, secondary buyouts was the primary exit route (although slight) for Florida sponsors in 2022. While 2021 was the year of SPACs, they have come to a screeching halt in 2022, with only one exit.
90 100 Corporate Acquisitions Secondary Buyouts Public Listing 0 10 20 30 40 50 60 70 80 2022 2012 2011 2013 2014 2015 2016 2017 2018 2019 2020 2021 28 30 24 27 35 51 39 21 22 16 23 30 31 33 33 63 32 42 35 36 36 5 2 3 4 48 58 1 11 4 1 6 2 4 3 32
As we predicted in our 2021 report, the number of sponsors with headquarters in Florida continued to skyrocket, with an additional 18 Florida-based sponsors in 2022. While we continue to hear of sponsors having the intention of moving to Florida, it will be interesting to see if the rate at which they do so remains this significant.
Fl o ri d a Headquartered Sponsors
0 20 10 30 50 40 60 70 80 79 56 90 100 110 120 47 41 37 34 32 30 72 95 113 130 140 131
Of the 131 sponsors headquartered in Florida, approximately 70% reside in the Southeast region. This is such a significant amount over any other region, with the next being Tampa Bay accounting for approximately 13%. The Southwest region accounted for approximately 6%, while all other regions accounted for less than 5% each.
Fl o rid
Region
a Sponsor by
2022 2018 2019 2020 2021 100% 0% 75% 50% 25% TAMPA BAY SOUTHWEST SOUTHEAST PANHANDLE NORTHEAST CENTRAL
METHODOLOGY METHODOLOGY
SPONSOR DEALS
This report includes all sponsor investments (buyout, growth, recapitalization, and add-on), excluding real estate investments, made into target companies, with headquarters in Florida. Only investments made directly by sponsor firms or their portfolio companies are counted. Buyout deals are defined as transactions in which the sponsor investors receive controlling ownership stakes in the target companies. Growth deals are defined as minority investments in target companies. Add-on deals are defined as acquisitions by companies with sponsor backing.
FLORIDA-BASED SPONSOR FIRMS
This report includes sponsor firms with headquarters in Florida that were either actively investing or raising funds during the reported periods.
SPONSOR-BACKED FLORIDA-BASED COMPANIES
This report includes companies headquartered in Florida that are in part or in whole backed by sponsor firms.
Cassel Salpeter & Co. is a Florida-based boutique investment banking firm focused on providing independent and objective advice to middle market and emerging growth companies for over10 years.
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Pitchbook has changed its methodology for recording deal activity that will apply to this and all future sponsor reports. All announced deals will be included in the reporting of total deal activity in addition to completed deals, and announced dates will be used to reflect deal timing in lieu of closing dates.
