A VIEW OF 1H 2023: FLORIDA SPONSOR REPORT
A VIEW OF 1H 2023: FLORIDA SPONSOR REPORT
THIS INFOGRAPHIC REPORT AND ALL ASSOCIATED CHARTS, PREPARED BY CASSEL SALPETER & CO. WITH DATA FROM PITCHBOOK AS OF JUNE 30TH, 2023, 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 JUNE 30TH, 2023
FOUNDED IN FLORIDA OVER 10 YEARS AGO
Florida Sponsor Deal Flow by Year
The first half of 2023 Florida sponsor deal flow was in line with our report for the first half of 2022, with 262 and 257 total deals reported, respectively. Sponsors are still battling higher interest rates, making the cost of borrowing and underwriting more difficult.
2012 2 0 1 3 2 0 1 4 2015 500 400 600 700 800 300 200 100 0 2016 2019 2020 2021 2022 2017 2018 1H 2023 246 262 219 273 309 305 360 368 398 445 683 678
Florida Sponsor Deal Flow by Region
TAMPA BAY SOUTHWEST SOUTHEAST PANHANDLE NORTHEAST CENTRAL
The Southeast region has consistently been the region with the highest number of sponsor deals in any given year since we began reporting in 2008, this year accounting for approximately 41% of total Florida sponsor deals in the first half of 2023. The Central region also remains consistent with approximately 18% of total Florida sponsor deals in the first half of 2023. Interestingly, after a short-lived increase in percentage in 2020, the Tampa Bay region has normalized back to pre-pandemic percentages, accounting for approximately 17% of total Florida sponsor deals in the first half of 2023. The Northeast region saw a slight increase in the first half of 2023, accounting for approximately 11% of total Florida sponsor deals, while the Southwest and the Panhandle were the lowest percentages, accounting for approximately 9% and 4%, respectively.
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 10% 0% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2018 2019 2020 2021 2022 1H 2023
Florida Sponsor Deal Flow by Quarter
The first two quarters of 2023 were consistent with the fourth quarter of 2022, with 132 and 130 total Florida sponsor deals in the first and second quarter, respectively, and 147 in the fourth quarter of 2022. While deal count is still solidly ahead of pre-pandemic levels, we suspect that the dollar value of those deals is relatively similar to the lower, pre-pandemic deal count, because smaller deals appear to currently be a more active space.
0 50 200 2022 2021 2020 201 9 2018 201 7 2016 201 5 2014 2013 2012 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 1Q 2Q 163 91 76 60 78 51 67 62 39 85 60 67 119 84 98 111 91 96 100 119 73 83 170 89 89 83 99 75 89 66 79 67 61 56 82 58 50 187 154 151 180 100 150 1H 2023 181 147 132 130 198
Florida Sponsor Deal Flow by Type
2022 1H 2023
Sponsor Add-Ons continued to drive Florida deal activity in the first half of 2023, accounting for approximately 61% of Florida sponsor deal activity. Interestingly, Growth/Expansion continues to grow, accounting for approximately 23% in the first half of 2023, up approximately 3% from 2022. While Buyout/LBO has continued to decrease year-over-year, this was the most significant decrease we have seen thus far, accounting for approximately 12%, a decline from approximately 20% in 2022.
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CREATION
BUYOUT/LBO 10% 0% 20% 30% 40% 50% 60% 70% 80% 90% 100%
LEVERAGED RECAPITALIZATION ADD-ON PLATAFORM
GROWTH/EXPANSION
Florida Sponsor Deal Flow by Sector
B2B again remained the dominant sector for Florida sponsor activity in the first half of 2023, accounting for approximately 36% of total deal activity. After B2C surpassed Healthcare in 2022, the sectors have balanced, accounting for approximately 20% (Healthcare) and 19% (B2C). While IT remained steady at approximately 14%, Financial Services declined, accounting for approximately 6%, down from 11% in 2022. On the flip side, Energy increased in percentage, accounting for approximately 3% in the first half of 2023, up from approximately 0.5% in 2022.
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 1H 2023
Florida Sponsor Buyouts vs. Add-Ons
Sponsor Add-Ons as a percentage of all Florida sponsor control investments once again hit an all-time high since we began tracking Florida sponsor data, accounting for 82.9%. This solidifies our assumptions earlier in this report regarding sponsors closing smaller deals.
0 200 400 600 0% 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % 395 187 206 98 219 92 253 108 82 58 138 65 120 78 101 53 155 83 142 103 93 2022 1H 2023 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 20 408 134 2 0 21 66.8% 67.8% 58.0% 68.0% 65.6% 60.6% 74.4% 70.1% 65.1% 70.4% 75.3% 58.6% 136 160 82.9% 33 90 %
Sponsor-Backed Florida Companies
Florida sponsor-backed company inventory continued to grow, albeit at a slower pace, with an additional 12 (net) new Florida sponsor-backed companies. This growth is minimal compared to what we reported in 2022 at 70 (net) new Florida sponsor-backed companies.
Total 2021 - 1H 2023 2015 - 2020 2009 - 2014 2000 - 2008 YEAR OF INVESTMENT 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 0.0K 0.2K 0.4K 0.6K 0.8K 2022 1H 2023 120 104 90 76 2001 2000 132 151 243 273 282 312 332 368 379 654 724 598 402 424 460 508 526 555 736 191
Florida Sponsor Exits by Type
While 2020 and 2021 seemed to be odd years for Florida sponsor exits, at approximately 59% and continuing the reversal of the Secondary Buyout trend, Corporate Acquisitions was once again the primary exit route for Florida sponsors in the first half of 2023.
125 Corporate Acquisitions Secondary Buyouts Public Listing 0 25 50 75 100 1H 2023 2013 2012 2014 2015 2016 2017 2018 2019 2020 2021 2022 17 25 26 41 43 44 40 22 17 23 33 33 32 57 34 42 37 40 40 43 57 2 11 42 39 4 3 5 4 12 2 2 3 6 2
Florida-Based Sponsors
The number of sponsors with headquarters in Florida continued to rise at a rapid pace in the first half of 2023 with an additional 14 Florida-based sponsors. Comparing this to year-end 2022, which saw a total of 18 new Florida-based sponsors for the entire year, 2023 is on track to be the most sizable increase we have seen since we began reporting in 2010. It will be interesting to see the 2023 year-end report and if the rate remains as significant.
0 50 79 56 100 47 41 37 34 32 72 95 113 150 131 145 1H 2023
Florida-Based Sponsors by Region
Of the 145 sponsors headquartered in Florida, approximately 72% are located in the Southeast region of Florida. This percentage has gradually increased from approximately 60% in 2018. Tampa Bay accounts for approximately 12%, followed by the Southwest and Northeast at approximately 6% and 5% respectively. Both the Central and Panhandle regions accounted for approximately 3% or less each.
2022 2018 2019 2020 2021 100% 0% 75% 50% 25% TAMPA BAY SOUTHWEST SOUTHEAST PANHANDLE NORTHEAST CENTRAL 1H 2023
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 independent 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.
