Middle Market DealMaker - 2024 Business Development Report // Special Edition

ANASTASIA DONDE Senior Editor, Middle Market Growth

adonde@acg.org

A Balancing Act

Between the launch of ChatGPT in late 2022 and many companies, including Google, Meta, Oracle and Amazon, announcing artificial intelligence tools in recent months, AI has been the talk of the town. Business development professionals in the M&A space have also noted the growing role of AI and other technologies in deal sourcing.

While the benefits of these new tools can’t be overstated, many experts in the profession are also quick to point out that relationshipbuilding still matters as much—if not more—in deal origination. “AI tools can now enhance lead generation and prospecting, by allowing for the analysis of vast datasets to uncover patterns and trends not immediately obvious to human analysts,” writes Sean McKinnon, head of business development at Novacap, in his guest column on p. 12.

Technology can be used to help firms find targets, sift for the right opportunities and become more selective about the areas they pursue. At the same time, long-standing relationships, face-to-face meetings and maintaining a dialogue with prospects over time are paramount to dealmaking. “Despite this technological evolution, the fundamental importance of relationship-building remains unchanged. In fact, it can be argued that relationships are more important than ever,” adds McKinnon, who was one of Middle Market Growth’s Private Equity BD Pros to Watch in 2022. While AI can help firms access a wider array of targets, relationships are important when it comes to being invited to narrow processes, determining which companies to pursue and recognizing businesses’ value proposition, McKinnon adds.

Jenna Schlageter, head of business development for Bow River Capital and one of this year’s Private Equity BD Pros to Watch, noted that one of her proudest accomplishments in 2023 was implementing a new tech-enabled tool to drive proprietary opportunities. At the same time, she says that “face-to-face interactions remain important in my role” and cites ACG’s DealMAX as “the ultimate dealmaking event to increase connectivity.”

Jay Jester, partner at Plexus Capital and this year’s ACG Legend Award winner, also credits ACG events and the membership network with helping him get started in several new cities when moving for different jobs. He recalls moving to Tampa, Florida, in 1992 and helping to build the chapter there. “This was pre-internet. You needed a way to find a network and deal flow, and ACG had to be part of that equation,” says Jester.

Whether you’re picking up this issue at DealMAX or reading it online, we look forward to connecting with you at ACG events and learning about the new technology that is propelling the dealmaking game forward. //

Contents

FEATURES

42 ACG LEGEND: THE EAST COAST CONNECTOR

Plexus Capital’s Jay Jester highlights the lasting benefits of the ACG network, which helped him across his career path at different firms and cities, including Boston, Charlotte and Tampa. The ACG Legend Award is sponsored by Grata.

52 M&A BUSINESS DEVELOPMENT PROFESSIONALS TO WATCH

Learn about the private equity, investment banking and corporate development professionals you need to know, including their proudest accomplishments in 2023, their goals for the coming year and the best career advice they’ve received.

CEO

Brent Baxter bbaxter@acg.org

SENIOR VICE PRESIDENT, ACG MEDIA

Jackie D’Antonio jdantonio@acg.org

CONTENT DIRECTOR

Kathryn Maloney kmaloney@acg.org

SENIOR EDITOR

Anastasia Donde adonde@acg.org

DIGITAL EDITOR

Carolyn Vallejo cvallejo@acg.org

ASSOCIATE EDITOR

Hilary Collins hcollins@acg.org

SENIOR ART DIRECTOR

Michelle Bruno mbruno@acg.org

VICE PRESIDENT, SALES

Kaitlyn Gregorio kgregorio@acg.org

Association for Corporate Growth membership@acg.org www.acg.org

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Trend Watch

ON TREND

Lawyers, accountants and other M&A partners show how they support successful dealmaking.

IN PERSPECTIVE: PRIVATE EQUITY

Novacap’s Sean McKinnon highlights the role of technology and relationships in business development.

IN PERSPECTIVE: INVESTMENT BANKING

ButcherJoseph’s Tristan Tahmaseb describes the growing role of ESOPs in a slower M&A market.

FOCUS ON FUNDRAISING

Small and large fund managers talk about strategies that win over LPs on a tough fundraising trail.

ON THE MOVE

Recent hires and promotions among middle-market investors and advisors.

INSIDE THE DEAL

How Plante Moran helped Soundcore Capital Partners successfully integrate two competing paving companies.

Behind The Scenes

On TREND

While business development professionals and investment bankers are at the forefront of dealmaking, M&A partners are working behind the curtain to narrow down targets, prepare companies for sale and effectively complete due diligence

BY ANNEMARIE MANNION

Private equity business development teams and investment bankers are on the front lines of deal sourcing, with a variety of tools at their disposal to find opportunities. Many of the M&A Business Development Professionals to Watch in this issue show how the origination function in M&A has grown and matured over the years. Behind the scenes, however, there are a host of M&A partners supporting these activities. Experts say these providers, including accountants, attorneys and wealth advisors, usually play a secondary but crucial role in the transaction process. They’re involved in preparing companies for sale, helping clients narrow their funnel, facilitating buy-side due diligence, lining up acquisition terms and closing transactions. In a slow or volatile market, like the one we saw in recent years,

some of this work becomes even more important.

“The advantage of an M&A third-party professional is that they see so much deal flow year to year,” says Peter Kahn, senior partner, M&A, for business and technology consulting firm West Monroe. “Our firm looks at over 600 deals a year, so we are part of the majority of transactions in private equity. If a company is being bought or sold, there’s a good chance we’ve looked at it before. That’s a lot of inherent market knowledge. We might be part of the buyside diligence and indicate that this target is stronger compared to another target.”

While investment banks are most likely to bring forward acquisition targets, M&A partners play a critical role in culling the wheat from the chaff, narrowing the focus, minimizing risk and doing up-front work

There is a big funnel [of potential deals]. Third parties come in to help the private equity investor narrow that.

PETER KAHN Senior Partner, M&A, West Monroe

to ensure deals close faster or with better terms.

“There is a big funnel [of potential deals],” Kahn says. “Third parties come in to help the private equity investor narrow that.”

Easing the Search Process

While M&A partners don’t typically help with sourcing deals, some provide their clients with tools designed to make the search and filter process more efficient.

Paul Aversano, managing director with business management consulting company Alvarez & Marsal and global practice leader for its Global Transaction Advisory Group, says his firm is often brought in by investment banks working to sell private equity portfolio companies.

Over the years, Aversano noticed that many clients were asking for help finding transaction opportunities and that methods of tracking and targeting deals were often informal: using industry connections, Excel spreadsheets and operating partners familiar with specific sectors.

To help address clients’ deal sourcing needs, Alvarez & Marsal created the Data Intelligence Gateway (DIG), which uses proprietary technology to search publicly available information and gain insights on private companies. DIG generates a customized visual dashboard that enables M&A professionals to filter and sort through data gathered from public sources about company size, growth trajectory, company ownership and other items.

“We do a lot of custom or bespoke searches for add-on acquisitions,” Aversano says. A client might be looking for add-on potentials in a specific industry that fit certain size or geographic parameters, for example. “We are able to start with a population of say hundreds of thousands and put it through a funnel and say, ‘Here are 160

If there are any true underlying issues someone is trying to cover up or distract from, our involvement will uncover those items and speed up the process.

MITCHEL NAKKEN Head of Transactions and Transformations, Palm Tree

companies that generally meet your criteria,’” Aversano explains.

Aversano says DIG searches are usually done for companies that are already clients that use the reports as they wish. Rather than deal sourcing, Aversano describes DIG as an idea generator.

Stages of Diligence

Identifying potential deals is one business development challenge; closing them is another. Completing deals in a timely manner is no small feat, and it’s another way M&A partners can aid clients.

“There’s an old adage that time kills all deals,” says Stephen Rossi, managing director and head of investment banking for Palm Tree, a hybrid consulting and investment banking firm, which combines multiple functions like accounting and advisory work under one roof.

He says his company helps in business development by working on the front end to anticipate and answer questions that might come from an investor during the diligence process.

“If they [an acquiring company] come in for diligence and it takes the seller three months to get back to them, the buyer starts thinking there’s a problem,” Rossi says. “If a buyer gives you their request list, and the seller has answers next week, then the

process moves smoothly, and the buyer feels the target is being credible.”

Palm Tree provides accounting services for companies planning a sale and prepares narratives that position the company as an attractive investment.

“We do the [accounting] work up front, so when a buyer comes in, we know the numbers are accurate,” Rossi says. “While that work is performed, my team is preparing marketing materials to correctly position the company, so that … everything is buttoned up.”

Korean beauty brand The Crème Shop was one deal that struggled in a sale process before Palm Tree took it on. It was ultimately sold to LG H&H, an affiliate of Korean conglomerate LG Group, in 2022.

The $250 million deal came about after an attorney for The Crème Shop called Palm Tree because the beauty company had lingered in an auction for about a year.

Mitchel Nakken, managing director and head of Transactions and Transformations for Palm Tree, took a deep dive into The Crème Shop’s financials—a process he compares to fixing the structure of a house versus simply staging it for sale.

“If there are any true underlying issues someone is trying to cover up or distract from, our involvement will

uncover those items and speed up the process,” he says.

Identifying and presenting a company’s upsides is another way that M&A partners can move a deal forward or achieve better terms.

“If you can present company performance in a way to make the underlying asset more understandable, or are able to delineate better profitability metrics or other value drivers, buyers will pay a premium,” Rossi says.

Sell-side and Buy-side Legal Help

When it comes to closing deals, legal advisors can help buyers go over a company’s documents and financials to avoid any risks or pitfalls. “On the buy-side, our due diligence process is geared to make sure that our clients have a full understanding of what they are purchasing and are able to assess the magnitude of the risks involved,”

says Alec Watson, partner at law firm Troutman Pepper. “Things are going to move rapidly, so we work efficiently and as quickly as possible, but not at the expense of being thorough.”

Troutman Pepper works with clients on both the sell- and buy-sides. Some of this work of getting companies’ “houses in order” is often prepared on the sell-side—before a process starts—to account for any questions a buyer might have, Watson explains.

“Once a company actually goes to market, things move really quickly,” Watson says. “The last thing a client wants is to see a deal get bogged down because of some issue that could have been addressed earlier, had they known about it. Timing is critical in these situations, so our goal is to minimize the number of obstacles that could create friction and delay the process.”

Kristian Herrmann, partner in the Private Equity and Mergers & Acquisitions Group at law firm Proskauer, says the role of a transaction lawyer is to be “a deal facilitator as opposed to a deal obstructionist.”

Like Watson, Herrmann says his law firm works with clients to dig into their business months before a sale process is initiated.

“That allows us to identify problems, risks or exposures the business could have that might cause a buyer to have a bit of heartburn,” Herrmann says. “With enough lead time, many problems can be mitigated, if not entirely resolved, before a sale process kicks off. And this upfront work often results in a smoother process.” //

ANNEMARIE MANNION

is a former reporter for the Chicago Tribune and a freelance writer who covers business.

Raymond James is thrilled to celebrate Rob for his achievements. His contributions and dedication to the investment banking industry are an inspiration.

Navigating the

Shifting Landscape of Private Equity Business Development

In Perspective

PRIVATE EQUITY

BY SEAN M C KINNON, HEAD OF BUSINESS DEVELOPMENT, NOVACAP

The past year has been a testament to the resilience and adaptability required in the face of economic headwinds in the ever-evolving world of private equity. As we reflect on the landscape of business development and market trends in 2023, it’s clear that the industry has faced its share of challenges and transformations.

The State of the Private Equity Market in 2023

It should come as no surprise that 2023 was a challenging year for the private equity industry. From a high of $2.2 trillion in 2021, deal activity dropped 35% to $1.4 trillion in 2022, and then plummeted another 40% to $850 billion in 2023— marking the lowest level since 2013.1 This

decline can be attributed to a combination of factors including rising interest rates, recession fears and the performance of individual companies, leading to fewer businesses coming to market.

Based on market feedback, initial buyer interest in the few companies that did go to market was notable, reflecting the scarcity of deals. However, as processes progressed, three key factors were highlighted by many of the most active mid-market investment banks as leading to reduced interest: doubts about the sustainability of revenue and EBITDA growth, concerns over future performance amid economic headwinds, and the tightening of debt financing due to higher interest rates. This divergence in valuation expectations caused many buyers

to withdraw, while those remaining adjusted their valuations downward, reflecting these risks. Data from Sutton Place Strategies showed that only 30%-40% of deals launched in the first half of 2023 had closed by year-end.2

Despite this, the deals that closed often did so at valuations that defied the broader trend of decline, a testament to the complexity of current market dynamics.

Winning Strategies in Business Development

Against the backdrop of 2023, what does it take to win in ’24? The role of technology in reshaping the private equity BD landscape cannot be overstated. Data analytics and industry tools such as data providers and CRMs have become indispensable in identifying potential investment

The depth and strength of relationships continue to be the decisive factor in securing investment opportunities and ultimately achieving successful financial outcomes.

opportunities and tracking industry trends. Artificial intelligence and machine learning have further revolutionized business development efforts. AI tools can now enhance lead generation and prospecting by allowing for the analysis of vast datasets to uncover patterns and trends not immediately obvious to human analysts. These tools are helping business development teams scale their research efforts efficiently and be more effective.

Yet, despite this technological evolution, the fundamental importance of relationship-building remains unchanged. In fact, it can be argued that relationships are more important than ever. With all the technology employed to identify the highest quality targets, being able to differentiate a firm’s value proposition is even more critical. The depth and strength of relationships continue to be the decisive factor in securing investment opportunities and ultimately achieving successful financial outcomes for private equity firms. Whether it’s securing an invitation to a narrowly targeted process (the “red-carpet” treatment) or getting access to the last call on a competitive deal, the quality of relationships with investment bankers and deal intermediaries holds the key to unlocking value and winning in hostile environments.

When dealing directly with entrepreneurs or management teams, a strong relationship can sometimes trump a higher valuation, since choosing the right partner for a transaction is vitally important. When everything else is

equal in a potential deal, it’s the depth of relationship that ends up carrying the day. Relationship-building remains a cornerstone of the private equity industry and will continue to be the game changer in differentiating from the competition. Technology can be an immense help, but it’s the human element that still wins in the end.

In conclusion, the private equity sector in 2023 has been marked by significant challenges but also by the emergence of innovative strategies and the reaffirmation of time-tested principles. As we move forward, the ability to adapt, leverage technology and maintain strong relationships will continue to define the winners in the private equity space.

At Novacap, we firmly believe in the transformative power of technology and data analytics, coupled with the irreplaceable value of human relationships. These elements are essential in navigating the complexities of today’s market. As we look toward the future, our commitment is to continue leveraging these tools and insights, ensuring we remain agile and effective in a landscape characterized by constant change. //

SEAN M C KINNON is head of business development for Canadian private equity firm Novacap. McKinnon is very active in the Canadian private equity and M&A community and currently serves as vice chair of the board for ACG’s Toronto chapter. He was featured in Middle Market Growth’s Private Equity Business Development Pros to Watch in 2022.

Winning M&A Strategies During Tough Market Conditions

INVESTMENT BANKING In Perspective

Despite continuously high interest rates, investors and advisors are betting on creative ways to get deals done and looking toward a brighter 2024

WBY TRISTAN TAHMASEB, VICE PRESIDENT, BUTCHERJOSEPH & CO.

e are all aware of the change in the financing environment over the last 24 months. Base interest rates have moved from near zero to over 5%, which has a number of knock-on effects in the macro and financing environments. Since the start of the rate hike cycle, pundits have called for the shoe to drop in the economy; however, underlying macro data remains arguably strong. What was a pessimistic tone broadly in markets entering 2023 transitioned to one of optimism heading into 2024, with higher probabilities cast for a “soft landing.” The general economy, particularly consumers, will eventually

face the reality of higher rates as the burden of the increased cost of capital sets in and COVID-era savings are depleted, but for now operating conditions remain robust.

In the financing ecosystem, the consensus seems to be that base rates are going to be higher for longer as macro conditions continue to demonstrate evidence of strength. Further, rates are expected to remain higher than in the last decade even if we enter a stretch of rate cuts. This is important for a few critical reasons. Debt capacity has fundamentally changed for operating companies, higher hurdle rates on investments are likely here to stay, and near-zero

rates (ZIRP policies) will no longer be the general engine propelling all market participants.

Coping with Continuously High Rates

At ButcherJoseph, we spend a significant portion of our year focused on debt capital advisory efforts on behalf of our clients. When base rates increase by 5% or more, there is a direct impact to fixed charge coverage levels and ultimate leverage detachment points. However, operating companies across most end markets continue to demonstrate revenue and profitability growth. Issuers with strong fundamentals continue to raise their debt capital needs at competitive terms, albeit at lower leverage levels than before the rate hike cycle. We have seen strong competition from debt capital providers (banks and non-banks) for quality issuers. Over the past year, capital providers have focused on sustainability of earnings and the impact to company fundamentals in various

economic conditions. As always, companies with recurring and nondiscretionary aspects to their business are viewed favorably.

Financial engineering is critical to private equity returns. As leverage levels have recessed, general partners are faced with prospects of lower returns at status quo valuations. Our sell-side practice has experienced downward valuation pressure in buyers’ reaction to the financing environment, but quality assets continue to command premium valuations, a similar story to the credit markets. Quality assets typically have the earnings growth profile to justify the valuation and satisfy GP return requirements. In comparing our processes in recent months to prior years, we have found there are fewer buyers who recognize an investment thesis or are willing to execute on it.

In the era of near-zero rates, most buyers could justify an investment. Cheap capital was abundant and hurdle rates were low, which revealed itself through record deal activity and valuations. There were multiple buyers (at competitive valuations) for nearly every business. Today, I would argue bankers are value-add again, as dealmaking requires thorough research on buyers and a delicate hand in marketing and execution of sale transactions.

Getting Deals Done Despite the Noise

A large part of our sell-side practice is focused on sale transactions for founder-owned business. Despite the headline news and uncertainty, our founder-owned deal pipeline is robust. Nearly all founder-owned businesses transact for reasons other than market timing. Founders look to realize value and prepare for an ownership transition of their businesses due to life events, typically

As leverage levels have recessed, general partners are faced with prospects of lower returns at status quo valuations.

because they want to enjoy some form of retirement.

We are at the front end of the baby boomer retirement curve, which will only add to the demand for business buyers in the coming years. Many large sponsors have recognized the opportunity in the lower-to-middle market and have developed strategies to take advantage of it. We expect the trend to continue in the coming years and believe the underlying demographic trends to be a secular tailwind for general deal activity in the middle market.

Another trend we have picked up on is the use of employee ownership as an exit vehicle for sponsor-owned companies. In an environment where there are fewer natural buyers willing to pay premium valuations, sponsors have leveraged employee ownership structures (ESOPs) to realize and lock in a return on their investment. Our sponsor clients have used ESOPs in situations where the sponsor has invested in a quality business that does not have a readily identifiable pool of buyers and for portfolio companies that have management teams who are not particularly excited to interact with another sponsor. ESOPs also provide tax

advantages and can alleviate general stakeholder concerns related to a sale event. Certain characteristics of the sponsors’ capital source are required for an employee ownership structure to be an effective exit vehicle.

Though deal activity is down relative to the record years of 2021 and 2022, we are optimistic on the dealmaking environment going forward. Today, debt capital markets for middle-market issuers remain competitive given the strength of underlying fundamentals. And even though there is uncertainty in the longer-term macroeconomic outlook, sponsors will have the opportunity to invest in founder-owned companies as underlying demographics continue to take hold in the coming years. //

TRISTAN TAHMASEB is a vice president at ButcherJoseph & Co., where he serves as an advisor to privately held businesses on sale transactions, employee ownership (ESOP) transactions, capital advisory engagements and strategic consulting. He was featured in Middle Market Growth’s Investment Bankers to Watch list in 2023.

Investing in Infinity: Advancing the Circular Economy

repurposing or recycling in a manner that maximizes resource efficiency.

Economy

Circular in the U.S.

By Anthony Casciano and Nikitha Radhakrishnan

The concept of a circular economy gained substantial traction in recent decades as companies adapt to reach sustainability goals. Yet our global economy is still only 7.2% circular, with over 90% of materials either wasted, lost or unavailable for reuse based on research by the Circle Economy Foundation for 2023.

Traditionally, the global economy has followed a linear model of “take, make, and waste.” The circular economy concept challenges this model, focusing on restoration, refurbishment, reuse, and recycling of materials across all areas of the supply chain. This approach aims to create a closed loop system that reduces environmental impact, promotes sustainability, and supports economic resilience by decoupling economic growth from finite consumption.

Through the lens of its DEGREE (decarbonization, ethics, governance, resource efficiency, equity, and employability) model, Siemens is committed to using resources responsibly and recognizes that the circular economy benefits business, the environment, and society. Together with its suppliers, the company relies on a competitive and transparent supply chain in order to act with foresight and responsibility, and helps enable its customers to do the same.

Siemens’ VP & Head of Supply Chain Management in the Americas region Patric Stadtfeld expressed that the shift from linear to circular business models is critical as Earth Overshoot Day—the date when our natural resource use surpasses what Earth can regenerate annually— comes earlier and earlier each year. “Circularity is key to ensuring long-term supply chain viability and profitability.”

Central to the circular economy is the principle of fostering sustainability through a holistic approach that spans the entire lifecycle of products and services. This approach begins with the innovative design phase—such as with Siemens’ Digital Twin Software—where a primary focus is on eliminating waste and pollution right from the outset. A key aspect is the emphasis on amplifying product utility through sharing models, allowing for more efficient use of resources, and reducing the overall demand for new products. It also extends to ensuring that products are built to last longer, thus prolonging their usage and reducing the need to constantly replace them. At the end of a product’s lifecycle, the focus shifts to

Siemens USA’s Head of Sustainability Matt Helgeson explained that the circular economy advocates for the integration of renewable energy sources and sustainable materials into production processes, reinforcing its commitment to minimizing environmental impact. “This paradigm shift toward circular practices also includes initiatives aimed at rejuvenating natural ecosystems, thereby creating a symbiotic relationship between economic development and ecological conservation.”

Financing solutions are pivotal in catalyzing the transition to a circular economy by providing the necessary capital and financial incentives for businesses and consumers to adopt circular practices. These solutions can range from green bonds and sustainability-linked loans— which finance projects with clear environmental benefits— to innovative leasing models that support product-as-aservice offerings, encouraging the design of durable and repairable products.

For example, Covanta is a world leader in providing sustainable waste and energy solutions and is the largest operator of Waste-to-Energy plants in the U.S. Siemens Financial Services (SFS) helped provide Covanta with a sustainability-linked loan with KPIs to incentivize the growth of waste sustainably processed by 2.5%, and to increase waste recycled and reused by 25%, between 2020 and 2025. The fulfillment of these specific KPIs will divert more waste from landfills, significantly reducing emissions and supporting the development of the circular economy.

By facilitating investments in recycling infrastructure, renewable energy, and circular supply chains, smart financing can reduce the upfront costs associated with sustainable business models, making them more accessible and attractive. Additionally, by aligning financial returns with environmental performance, sustainable financing solutions can incentivize companies to innovate and adopt practices that minimize waste and maximize resource efficiency, thereby accelerating the shift to a more sustainable and circular economy.

The circular economy is not just an alternative model; it's a necessary evolution for a sustainable future. At SFS, we’re excited to continue working with customers, not only in the U.S. but globally, on their journeys from a linear to a circular business model and together, forge a path toward an economy that works in harmony with the environment.

Strategist at Siemens Financial Services, Inc.

usa.siemens.com/finance

Anthony Casciano is president and CEO of Siemens Financial Services, Inc. Nikitha Radhakrishnan is the Sustainability

PE Fundraising Expected to Recover,

Buoyed by Increased M&A

Placement agents and managers of recently raised funds talk about winning over LPs in a slower economic environment

BY ANASTASIA DONDE

Private equity fundraising numbers were one of many metrics to suffer last year as high interest rates and geopolitical headwinds weighed on dealmaking. This year, however, placement agents and other advisors say they are looking forward to a better year for fundraising as M&A recovers—to an extent. Delivering exits and returns to LPs is one of the best ways to go about launching a new fund, experts say, and as M&A improves, so should fundraising.

At the time of writing, first quarter numbers weren’t yet available, but multiple mid-market firms had announced fund closes at the beginning of the year. Firms operating at different ends of the middle-market spectrum say they are seeing traction with investors for different reasons. Lower middle-market firms are still seeing deals and exits because founders of smaller companies are motivated to sell despite market calamity (or perhaps because of it). Other private equity managers operating multibillion-dollar funds are winning mandates with international investors and say LPs like the safety of brand names and well-diversified strategies.

“It feels like 2024 is off to a better start than last year. There is more deal

activity, which sends distributions back to LPs, public market performance is improving, and there are a number of groups raising new capital,” says Jerome Wallace, managing director and co-head of Private Capital Advisory at William Blair. The Chicago investment bank launched its PCA business in 2022 after hiring Wallace and several other executives from Credit Suisse’s fund placement business.

Chris Webber, managing director at placement agent Monument Group, agrees: “There are more opportunities hitting the market to provide liquidity.” Realizations for LPs should speed things along for managers raising new funds, he says.

According to Preqin data compiled by S&P, there were 1,936 private equity and venture capital funds that raised capital globally last year, compared to 3,618 in 2022. That’s contrasted against the 5,080 fundraises in 2021 and 3,791 in 2020. According to Preqin analysis, private equity fundraising is expected to come back to 2021 levels by 2028 in terms of dollar value. PE funds in North America collected $364 billion in 2021.

Investors in different size funds have varying priorities, says Wallace, whose firm typically works with funds ranging from $500 million

to $5 billion. Investors in smaller funds are often “looking for new, up-and-coming managers or specialized strategies. And they expect the lower middle market to generate outsize returns,” Wallace says. Larger allocators, like public pension funds and sovereign wealth funds, are typically writing sizeable tickets that only big brand-name fund managers can accommodate, he adds.

The Advantage of the Lower Middle Market

Several middle-market firms closed sub-$1 billion funds in the beginning of the year, including Trinity Hunt Partners, Ocean Avenue Capital Partners and Forward Consumer Partners. These firms typically play in the lower middle market, where they argue deals are still happening and fund returns are higher.

Trinity Hunt Partners closed its Fund VII in February at a $700

million hard-cap and took less than five months to raise the capital.

Blake Apel, managing partner at the firm, says Trinity Hunt’s strong track record helped win over LPs. “Investors are looking for specialized GPs that can repeatably drive alpha, and we were able to prove that we had a specialized value creation strategy,” he says. A majority of capital in the fund was from returning LPs, including insurance companies, pension funds, endowments and consultants. “A significant amount of LPs realize buyout capital skews to large-cap and mega-cap funds because of the brand halo, but returns have actually been better in funds focused on small-cap transactions,” Apel says. Trinity Hunt invests in founder-owned companies in services sectors. The businesses the firm looks at typically have $2 million-$10 million in EBITDA. “A large part of our strategy is unlocking substantial growth by getting the

right talent into the smaller companies that we acquire,” he adds.

Despite the tough fundraising environment, some new funds and new firms with specialized strategies have completed capital raises. Greenwich, Connecticut-based Forward Consumer Partners closed its debut fund at $425 million in December after a six-month-long fundraising process, according to a January press release. The firm focuses on branded consumer businesses, and its founders hail from private equity firm L Catterton and consulting company McKinsey & Co.

When it comes to new funds, the pedigree of the fund managers is one consideration, says Wallace. “The repeatability of what they’ve done previously is also important,” he adds, explaining that if a portfolio manager goes from doing mega-cap deals to small-cap, the strategy might not be very transferable.

Private Equity/Venture Capital Fundraising, 2019-2023

Data compiled Jan. 12, 2024.

Analysis includes private equity and venture capital funds with final close between Jan. 1, 2019, and Dec. 31, 2023. Funds in the analysis are limited to venture capital, balanced, buyout, co-investment, co-investment multi-manager, direct secondaries, fund of funds, growth, hybrid, hybrid fund of funds. PIPE, secondaries, or turnaround fund types.

Source: Prequin Pro; © 2024 S&P Global

The Highlights: 2024 Private Equity Fundraising Announcements

Source: Press releases

Northleaf Capital Partners is one example of a firm that took its experience in other strategies to launch a new fund. The Toronto-based firm, which has $24 billion in assets under management across private equity, private credit, infrastructure and secondaries, announced the closing of its first Northleaf Growth Equity Fund at $212 million in February. The firm is leveraging its experience in other strategies, like funds of funds, venture capital and secondaries, to invest directly in tech and healthcare companies, according to Mike

Flood, managing director and head of private equity. Part of the strategy is repricing assets that were sold at high valuations prior to 2022 and don’t have a clear path to an IPO or other exit. “It’s a well-timed strategy and well-positioned in the secondary market to reprice valuations that were established prior to 2022,” Flood says. The fund was 40% invested as of February across 12 companies. Flood notes a significant amount of capital in the fund came from investors in Northleaf’s other strategies who seeded this vehicle.

Safety in Numbers

While the small-cap market has its advantages, larger firms continue to rake in billions. Experts say they benefit from brand names, an international LP base and the security investors find in diversified generalist strategies. Firms that operate in the middle market and raised larger funds in the beginning of the year include TJC, Wynnchurch Capital, Gauge Capital and Wind Point Partners. TJC announced the closing of its $6.85 billion Resolute Fund VI in late January. The firm invests in

companies with $100 million to $2 billion of enterprise value. Kristin Custar, partner and head of global investor capital at TJC, admits fundraising was challenging last year and that U.S. investors were much more constrained, with some LPs having trouble adding new relationships or even re-committing to existing PE managers. “We talked to one large investor that had their budget slashed by half,” she says.

New York-based TJC, previously known as The Jordan Company, benefited from an international LP base: 65% of the investors in its new fund came from outside of the U.S. “I spent a lot of time on planes,” Custar says. The firm had strong support from pension funds in Latin America and Europe, as well as a lot of exposure to investors in Japan, China, Singapore, Indonesia, Malaysia and the Middle East.

“There continues to be strong interest abroad for high-quality U.S. managers,” says William Blair’s Wallace. New York-based Kelso & Company closed its Kelso Investment Associates XI fund in September at $3.3 billion with capital also coming in from many investors abroad. The fund’s LP base included investors in Europe, Asia, Latin America and Australia, according to Lynn Alexander, head of investor relations and fundraising.

Custar says TJC’s consistent, well-diversified strategy of investing in middle-market U.S. buyouts works with investors. Additionally, TJC had several exits last year, she adds. “We were one of the only GPs calling our investors about distributions.”

The Jordan Company invests in four core areas: consumer and healthcare, diversified industrials, logistics and supply chain, and technology and infrastructure. Industrial technology

was recently carved out as a dedicated vertical within the diversified industrials target sector.

Kelso & Company also invests through a diversified strategy across four sectors—financial services, business services, healthcare services and consumer. “We’re interested in durable, recession-resistant businesses that we can grow organically and through acquisitions,” Alexander says.

Still, the environment feels slower than normal and interest rates continue to be high, although they’re not expected to keep rising. “I’m optimistic about 2024,” says Jessica Mead, regional executive for North America at fund administrator Alter Domus. “Hopefully we’ve seen the peak of interest rates and firms are starting to unlock the value of assets in M&A.” //

Corporate Valuation in Mergers and Acquisitions

examines the role of investment bankers, valuation experts, and the courts in several M&A cases involving valuation issues, including the valuation issues in (1) Time-Warner, a well-known 1989 case, and (2) the Six Recent Valuation Cases, including Twitter, a 2022 case.

This treatise digs deeply into the principal valuation techniques employed in M&A, including the Discounted Cash Flow (DCF), Comparable Companies, and Comparable Transactions Techniques, and introduces several other valuation techniques and related concepts.

ANASTASIA DONDE is Middle Market Growth’s senior editor.

MOVE On the

JONATHAN GURSS Coalesce Capital

New York-based Coalesce Capital, a private equity firm investing in human capital-driven and technology-enabled services companies, appointed Jonathan Gurss as a partner.

Gurss has 15 years of experience investing in and working with middle-market business services companies. Before Coalesce Capital, he was a principal at Sentinel Capital Partners. In this role, he invested in and served on the board of directors of 10 companies. He also focused on fostering long-term, profitable growth at portfolio companies. Before Sentinel, he was an investment banker at Harris Williams.

BILLY MEDOF

Altamont Capital Partners

Palo Alto, California-based private equity firm Altamont Capital Partners hired Billy Medof as an operating partner. He is expected to accelerate Altamont’s investment thesis within the corrugated packaging industry.

With about 20 years of executive leadership experience, Medof previously served as both president of Georgia-Pacific (GP) Corrugated and business leader for GP’s Sheet Feeders, which are subsidiaries of Koch Industries. At Georgia-Pacific, where he worked between 2007 and 2019, Medof led 4,000 employees across 40 plants that manufactured 15 million corrugated boxes daily.

He also served five years on the executive committee of the Fibre-Box Association, including his role as vice chair. Most recently, Medof was CEO of Procure Analytics, a group purchasing organization that helps member companies achieve savings in categories including maintenance, repair and operations, packaging and freight. Medof was also the director of business development at Delta Air Lines and an associate at Citigroup. Medof is a veteran of the United States Army.

DAVID GIBSON Comvest Partners

Private equity and credit firm Comvest Partners hired David Gibson as a managing director, based in the firm’s Chicago office.

Gibson is responsible for originating, structuring and managing debt investments for Comvest Credit Partners, the firm’s direct lending platform.

Before joining Comvest, Gibson worked at Goldman Sachs, where he spent nearly two decades, most recently as a director. He focused on originating and managing credit investments for the firm’s private credit business.

While at Goldman Sachs, Gibson was among the founding members of the specialty lending group and opened the Chicago office in 2004.

Gibson also held investment management roles at Twin Brook Capital Partners, GE Commercial Finance, Heller Financial and LaSalle Bank (now Bank of America).

JON EILERTSEN

Alvarez & Marsal

Alvarez & Marsal, a global professional services firm, appointed Dallas-based Jon Eilertsen as a managing director in the CFO Services Practice of the firm’s Private Equity Performance Improvement group.

In his new position, Eilertsen assists private equity firms’ portfolio companies and other corporate entities with complex accounting and financial reporting-related matters. He works with clients on accessing the capital markets, managing pre- and post-acquisition financial reporting, structuring and executing transactions, and addressing operational

JOELLE MARQUIS

Arsenal Capital Partners

New York-based private equity firm Arsenal Capital Partners named Joelle Marquis as president.

In this newly created role, she presides over the firm’s management committee, which is tasked with overall leadership and management, organizational design and functioning, shortand long-term goals achievement, and team and capabilities oversight. She will continue to lead Arsenal’s strategic human capital and culture-building efforts.

Marquis has been with Arsenal since 2003. During her tenure, she has held the position of co-head of the firm’s operating team. In this role, she developed and enhanced the firm’s industry, scientific and technical expertise. She successfully integrated these team members and capabilities into the firm’s operating system and investment teams.

Before joining Arsenal, she worked at Baltimore Technologies as vice president of human resources and chief operating officer, and at Information Systems and Services as vice president and general manager.

effectiveness issues. This includes matters related to accounting and financial reporting under U.S. generally accepted accounting principles (GAAP).

He also guides management teams regarding audit compliance issues and assists with audit remediation and the restatement of financial statements.

Prior to joining Alvarez & Marsal, Eilertsen worked for BDO. Before that, he worked at PwC as a capital markets deals manager, at Invitation Homes as a manager of accounting policy and analysis, and at Deloitte as an audit senior.

LEE MINKOFF AND MOE TUFAIL

Renovus Capital Partners

Wayne, Pennsylvania-based Renovus Capital Partners, a lower middle-market private equity firm, promoted Lee Minkoff (pictured left) and Moe Tufail (right) to managing directors. Minkoff was previously a principal, and Tufail was director of business development.

Prior to joining Renovus, Minkoff was a vice president at Lovell Minnick Partners, a private equity firm focused on financial services and technology. Prior to Lovell, Minkoff worked at UBS as an investment banking analyst in the financial institutions group. Minkoff began his career at JPMorgan as an investment analyst.

Before joining Renovus, Tufail held roles at UBS Financial Services, Merrill Lynch and Rampart Capital Partners.

GRANT GROHER

Balance Point Capital Partners

Westport, Connecticut-based Balance Point Capital Partners, a lower middle-market investment firm, promoted Grant Groher to managing director.

Groher joined Balance Point in 2017 as a senior associate. He most recently served as senior vice president. As managing director, Groher will continue his focus on deal origination, deal execution and portfolio management.

Prior to joining Balance Point, Groher worked in the financial sponsors group at Credit Suisse, where he was an associate responsible for the due diligence and underwriting of syndicated loan and bridge financings for sponsor-led LBO and M&A transactions. Groher began his career at Anadarko Petroleum Corp., where he evaluated and executed corporate M&A and asset transactions in the energy industry.

RAVI SHAH AND MICHAEL EMBER

McNally Capital

Chicago-based private equity firm McNally Capital promoted Ravi Shah to partner and Michael Ember to principal.

Shah joined McNally Capital in 2016 and is dedicated to leading investments in the national security and aerospace sector and the industrial technology and automation industries.

Shah co-led the creation of the firm’s investment thesis in national security. He is instrumental in driving investments within that industry, including current portfolio companies Orbis, Xcelerate Solutions, FedData and Altamira Technologies.

Ember and Shah co-lead the execution of the firm’s national security investment thesis in

GREG BELINFANTI

One Equity Partners

New York-based One Equity Partners (OEP), a middle-market private equity firm, named Greg Belinfanti as president.

He succeeds founder Dick Cashin, who will continue to serve as chairman and play an active, full-time role in managing the firm and its investments.

Belinfanti has served at OEP for more than 17 years, holding essential roles on the investment, operating and valuation committees since the firm’s spinout from JPMorgan in 2015.

Belinfanti joined OEP in 2006 when it was part of JPMorgan. Throughout tenure, Belinfanti has spearheaded numerous healthcare transactions and contributed to a variety of investments in other sectors, including business services and industrials. He has served on the boards of multiple OEP portfolio companies.

Before OEP, Belinfanti served as a vice president in the investment banking division of Lehman Brothers.

partnership with Nio Advisors, a McNally Capital industry partner.

Since joining McNally in 2017, Ember has played a leading role in overseeing the due diligence processes for the firm’s investments in Orbis, Xcelerate Solutions, FedData and Altamira Technologies, as well as their add-on acquisitions and refinancing activities.

In addition, he spearheaded the due diligence, negotiations and structuring process for Xcelerate Solutions and its recent merger with VMD Corp. Ember also co-led the sale of ITS Logistics alongside founder Ward McNally. He presently leads the firm’s associate recruitment committee.

Private equity returning to platforms, with greater efficiency

By Andy Jones Private Equity Info Founder & Managing Partner

DATA-DRIVEN PREDICTIONS

Expect private equity to shift to more platform investments through 2025, with accelerated add-on pace.

As a research database and information services company serving the middle market M&A community for 20 years, we ingest enormous amounts of data surrounding transactions, firms, and executives. In addition, our team engages in many conversations daily across the spectrum of investors, investment bankers, and service providers to the M&A community. This unique combination of hard data from our database and anecdotal commentary from informed thought leaders regularly provides us with “ahead of the curve” observations. Below are several trends we are observing in our data and hearing in the marketplace.

Throughout 2024 and 2025, we expect private equity firms to amplify their focus on platform investments, compared to 2023, to heavily weighted

investments in select growth industry verticals, thoroughly researching and vetting target niches upfront, and to identify bolt-on acquisitions early in the process, shortening the time required to integrate add-on acquisitions.

RETURN OF THE PLATFORMS

Pre-Covid, private equity firms acquired 75% platform investments against 25% add-ons. However, economic uncertainty driven by Covid, inflation, higher interest rates, and fear of recession had PE firms acquiring cautiously, reluctant to deploy substantial amounts of capital into an uncertain economy. Instead, they focused on smaller bitesized investments with add-ons. The

platform-to-add-on ratio has therefore steadily declined to a 50-50 ratio in 2023, according to our data.

In addition to the effects of the broader market ambiguity of 2020 –2023, the relative mix of platforms to add-ons is influenced by more private equity firms opting for a bolt-on strategy as a primary method of value creation. Lower purchase multiples create a compelling case to adopt an add-on strategy. However, PE firms have too much dry powder for add-ons to add-up.

To deploy accumulated, uninvested capital more quickly, we expect firms to pivot firmly to platform investments, particularly as we move into 2024 with a clearer economic outlook.

“Private equity firms have too much dry powder for add-ons to add-up.”

FOCUSED VERTICALS

Those who have been in the middle market PE space for decades recognize the transition from generalist investor to industry-focused investor, and now, in many cases, to the industry subsector investor. While private equity firms invest across a wide spectrum of industries, some sectors are more equal than others.

Consequently, financial buyers are heavily concentrated on select growth industries. The top industries of interest not only get the most PE acquisitions, they are growing as a share of overall PE investments.

We expect to continue to see an outsized share of private equity investments in scalable, low capex, high margin, fragmented service industries and technology companies with PE firms developing a strong industry thesis and deep vertical expertise prior to investment.

TIME COMPRESSION

With improved technology, continually refined processes and outsourced-partners, PE firms continue to gain efficiency ingesting new platform acquisitions and integrating add-on investments. Consequently, target identification-to-closing cycle times for new bolt-on investments continues to occur earlier in the hold period, allowing more time for growth initiatives, operational improvements, and a bump in ROI. From an acquisition perspective, private equity is moving more quickly and efficiently than ever before.

WINNERS AND LOSERS

If some industry verticals are experiencing significant growth in their share of PE investments, other industries are in decline.

Top Growth Sectors (NAICS) Most Declining Sectors (NAICS)

541 – Professional, Scientific & Technical Services

926 – Administration of Economic Programs

812 – Personal and Laundry Services

518 – Data Processing, Hosting & Services

511 – Publishing Industries (except Internet)

We see this in our data as well. The average time from platform investment to the first add-on has halved over the last decade and continues to improve.

Over the years, PE firms have developed expertise, often leveraging strategic partners, to professionalize financial and business operations, recruit talent, and upgrade systems, post close. Further, many investors now source add-on investments before the initial platform investment is complete. The implication: PE firms are enhancing capability to develop an industry thesis upfront, commit to that strategy, and execute parallel transactions at an accelerated pace.

It’s now common for dealmakers to put three or four companies together simultaneously, in some cases, creating a platform investment from what would otherwise be a collection of add-ons. The pitch to the sellers is clear. Exit a majority

515 – Broadcasting (except Internet)

322 – Paper Manufacturing

213 – Support Activities for Mining

211 – Oil & Gas Extraction

517 – Telecommunications

stake, roll some equity into the larger entity, and see your minority investment benefit from the instant multiple expansion. Ride with us and, in a few years, create a second substantial liquidity event.

Of course, multiple simultaneous deals add significant complexity to transactions. This requires refined systems and processes mapped well in advance to identify targets, structure deals, contend with all the moving parts, and integrate multiple companies post-close. Private equity firms are becoming transactionally more efficient and sophisticated.

We expect the average time between platform investment and the first add-on will continue to decline with technology and process improvements. This is an area where AI will have a significant impact, furthering gains in transaction efficiency.

Andy Jones is the founder of Private Equity Info, formerly an investment banker and engineer.

Connect

Blueprint for Success: Merging Market Competitors into a Unified Force

Plante Moran’s integration expertise helped transform local competitors into a unified company

When New York-based Soundcore Capital Partners, a buy-andbuild private equity firm, completed the acquisition of its second paving company in the Minneapolis area in 2023, the firm was tasked with integrating two rival businesses.

These competitive paving companies, ACI Asphalt & Concrete and ACS Asphalt Concrete Solutions, now had to fully merge into a new platform, which would be the cornerstone for Heartland Paving Partners.

Jeff Long, a partner tasked with driving growth and performance improvement across Soundcore’s investment portfolio, has a lot of experience managing integrations, but he knew he needed to bring in more expertise on this one.

Not only would it require excellent people skills to smooth over tensions between these competitive businesses, Long needed to devise a plan to integrate the two organizations and identify performance

KIM DOYLE Partner, Plante Moran

JEFF LONG Partner, Soundcore Capital Partners

improvement initiatives to optimize the combined entity, all within a short timeframe.

Due to the highly seasonal nature of the paving industry, ACS’ deal closure in mid-January gave Long only 15 weeks to integrate the two companies and ensure their collaboration.

The off-season timing of the deal further complicated the process. Several key employees were on vacation, reducing available staff to drive the integration process forward.

Long selected Southfield, Michiganbased Plante Moran, one of the largest audit, tax, consulting and wealth management firms, to work with.

“I hired Plante Moran because they are distinctive in the marketplace,” Long says. “Because of the size of the companies we work with, there aren’t many consulting firms that truly understand a buy-and-build shop like ours. Most consulting firms don’t understand the lower middle market like Plante Moran does.”

Fostering Unity Among Competitors

One of the major challenges of this deal was unifying two entities that had long viewed each other as rivals. Recognizing the situation’s sensitivity coupled with the tight time constraints, Plante Moran had to dive right in to get to know the team and understand how they operate.

“We sat down with leadership to understand how things were currently done and how they wanted to do things in the future,” says Kim Doyle, partner at Plante Moran. “We worked with them to establish a new operating model for the newly created entity, identified opportunities to optimize operations, and then built a plan to get there.”

What made matters more complicated was that the companies each had a strong sales force with different and successful sales strategies. These teams needed to be unified and

Most consulting firms don’t understand the lower middle market like Plante Moran does.

JEFF LONG Partner, Soundcore Capital Partners

aligned around a common strategy, all during peak sales season.

To tackle this effectively, Plante Moran set up and managed an integration management office (IMO). The IMO met with executives and key stakeholders weekly to review progress and resolve bottlenecks. The team escalated issues to Long if bottlenecks couldn’t be resolved swiftly.

“What we had were two very competitive businesses in the same small marketplace,” Long says. “This all caused heightened tensions that required Plante Moran to have astute people management skills. It meant getting all the issues out there, objectively weighing the pros and cons, and then forging a consensus on the way forward together.”

“All of this required tactful people skills, an aligned strategy and strong collaboration between all parties on the part of the Plante Moran team,” Long says.

Establishing an Annual Operating Plan with Performance Improvement Initiatives

Another significant challenge was creating an annual operating plan (AOP) with companies that had never had one before. Identifying and executing key performance improvement initiatives that translated to EBITDA

improvements for the combined entity were also critical to the deal’s success.

“These were owner-operated, founder-led companies, so many of these concepts were new,” says Doyle. “The idea of building an annual operating plan, looking at the business to assess profitability and margin, coming up with improvement plans and stretching to increase value relentlessly year-over-year was all new to them.”

The Plante Moran team collaborated with Long and used a defined Six Sigma for Services approach to identify eight key performance improvements and established a method to track those goals. They also created all the financial modeling for the initial AOP. The new leadership team of the combined entity collaborated on the effort and, as a result, took ownership over the execution of the initiatives.

One of the more challenging initiatives was the optimization of scheduling. “The trick to that was making sure the staff was dispatched from the best yard with the best crew to do a particular job,” Long says. When done correctly, it saves time and money.

Long says that initially the Plante Moran team had devised a schedule optimization tool that was too complex to follow. The Plante Moran team immediately reworked the tool based on Soundcore’s feedback. Long adds that while this might seem like a minor detail, other consultants that he had worked with hadn’t been as willing to adapt to feedback.

“You have to remember you’re dealing with real people at these companies,” Long says. “You can only do so much at a time, and Plante Moran understands that.” Long explains that “many of the companies we invest in are run by their founders, who are very confident in the way they have built their company but skeptical of alternatives. Working with a consulting firm that understands this and adapts wisely is key.” //

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What’s Next

EMERGING INDUSTRIES AND TRENDS IN DEAL SOURCING

NEXT TARGET

A sustainable fashion CEO shares why the industry is eager for U.S. investors to get in early with this high-growth sector.

ON THE HORIZON

Troutman Pepper attorneys outline successful cybersecurity strategies for PE firms’ portfolios.

ON THE HORIZON

WhiteHorse’s Pankaj Gupta shines a light on the risks of aggressive lending practices.

ON THE HORIZON

Ortoli Rosenstadt Partner Paul Pincus lays out the benefits of reps and warranties insurance for buyers and sellers.

Coaxing Sustainable Fashion Investors This Side of the Atlantic

The U.K. and Europe are leaders in sustainable fashion investment. Can acquirers across the pond jump into the growing opportunity?

BY CAROLYN VALLEJO

Late last year, images of burning piles of clothing waste in Chile, totaling tens of thousands of tons, caught the public’s attention and drew awareness to the consequences of fast fashion’s monumental rise.

Environmental groups say the mounds of discarded clothes represent a troubling trend: Researchers found the average number of times a garment is worn has dropped by 36% in 15 years.

Clothing waste is far from the only sustainability challenge facing the fashion sector, and the numbers are stark. Fashion is the world’s secondlargest consumer of water, with textile dyeing the second-largest water polluter.

The International Union for Conservation of Nature estimates more than one-third of all microplastics in the ocean can be traced to the laundering of synthetic textiles. And these statistics don’t begin to touch on a variety of social issues around child labor, unfair wages and dangerous working conditions also troubling the industry.

With so many points along the fashion supply chain and product life cycle in need of improvement from an environmental, social and governance standpoint, new businesses are emerging to tackle any number of challenges. For investors, an opportunity is on the horizon, experts say, as some of the biggest brands in fashion and cutting-edge innovators drive progress—and profits.

Investor Interest

Beyond the U.S.

Venture capital, private equity and strategic investors have already proven active in the sustainable fashion realm thanks to a highly diverse and fragmented pool of potential investment targets. The data within middlemarket search engine Grata reveals 3,281 businesses operating in the sustainable fashion space globally, and

nearly all—3,166—are either bootstrapped or venture capital-backed.

Such a high volume of sustainable fashion players reflects the large number of pain points that exist in the sector. Michael Kleindl, managing partner at Collateral Good Ventures, a climate-first venture capital firm based in Switzerland, says the data is “shockingly bad,” noting that the fashion industry is responsible for up to 10% of global greenhouse gases; about half of all fashion products produced end in a landfill, and less than 1% gets recycled.

“The great news,” he says, “is that we are observing an acceleration of technology startups who can bring true innovation and transform the industry.”

Collateral Good Ventures is quick to embrace those innovators, having recently launched its Collateral Good Ventures Fashion I, the firm’s first fashion-focused fund targeting sustainability within the fashion supply chain and the materials that pass through it. That means seeking out materials that can be recycled, lab-grown or bio-based, and identifying points in the production process to reduce water, energy and chemical usage. Already, Kleindl says, the fund has captured significant attention from hundreds of innovators submitting investment proposals. Fashion giant Hugo Boss became the first to invest in the fund, announced last December.

Other recent investment activity in the industry has remained focused outside of the U.S. Navis Capital Partners invested in Saitex Holdings in 2018, backing the Vietnam-based jeans supplier in its efforts to modernize denim manufacturing with sustainable practices. (The company opened its latest sustainable fabric mill in 2022.) Also in 2022, Goldman Sachs’ asset management arm led a $100 million investment in Recover Textile Systems, a Spain-based business that

turns textile waste into recycled cotton fibers. The investment valued the company at $1.1 billion.

Of the 3,281 sustainable fashion businesses found within Grata’s database,

One of the most important things for investors to be aware of is that consumers who are about this space really care.

ERIN HOUSTON Co-Founder and CEO, Wearwell

only nine are currently backed by private equity sponsors. They include Los Angeles-based sustainable fashion brand Reformation, which secured funding from U.K.-based global investment firm Permira. More recently, Italybased Kampos, a sustainable swimwear brand, sold a 35% stake in the company to investors including MEGA Holding, Cherry Bay Capital Group and Pambianco Invest Club, according to reports released earlier this month.

“Private equity’s presence in the market has been muted thus far, however, particularly in the U.S. There is a perceived higher consciousness for the environment and sustainability in Europe,” says Kleindl.

Growth Beyond Funding

Even amid a tough investment and macroeconomic environment,

sustainable fashion startups continue to find avenues to grow without the help of outside capital—including those operating in the U.S.

One of them is sustainable e-commerce marketplace Wearwell, based in Philadelphia. The company is tackling

There is a perceived higher consciousness for the environment and sustainability in Europe.

MICHAEL KLEINDL Managing Partner, Collateral Good Ventures

multiple ESG pain points within the fashion sector, offering clothing, accessories and home goods from brands vetted for their sustainability and ethical business practices.

Having initially launched as a subscription service, Wearwell pivoted its business model and expanded its offering to broaden its consumer reach. The company transitioned into a C Corp in 2020 and operates with a core staff of three to limit overhead. Wearwell has managed to raise $1.4 million to date via seed and pre-seed funding, as well as a crowd equity campaign, “which was a really wonderful way for us to attract new customers,” Co-founder and CEO Erin Houston notes.

But market headwinds have forced the business to turn its attention away from fundraising efforts for the time being. “It’s a tough consumer market right now, and because of that the investment community is a lot less bullish than it used to be on

consumer-facing businesses,” says Houston. “We’ve seen slow M&A over the past year, of course. … We’ve got enough runway, we’re able to continue growing and moving forward because we’re covering our costs, but we’re not growing at the pace that we would like to, and it’s really just due to a lack of availability of funding.”

For now, Wearwell’s growth efforts are instead focused on brand partnerships—a strategy Houston says is key for the entire sector. “The sustainable fashion industry overall is a lot more focused on partnership than any other industry I’ve been a part of before,” she says. “We’re really looking at it as: this is how we can all grow together, because it is an emerging market.”

Brand partnerships have helped the platform expand despite a challenging time for the consumer goods space— amid other business hurdles. “We incorporated in 2020, and we all know what happened a couple of months later, having to navigate a global pandemic and supply chain issues,” Houston recounts. “There’s also an economic hangover I think we’re still experiencing.”

But she expects 2024 to be a year of fundraising recovery, and investors should be ready to act. “There’s a wide-open opportunity for investors to get in on this space before it continues to grow in the next phase of economic recovery,” she says. “We’re ready for that.”

Investors Shopping Around

For investors ready to jump into the sustainable fashion pool, Houston says they must be diligent in their sourcing efforts. Acquirers, just like consumers, are at risk of falling victim to false claims of sustainability.

“One of the most important things for investors to be aware of is that consumers who are about this space really care,” says Houston. “They are sticklers. They see through ‘greenwashing.’

From an investor perspective, it’s important to know that the investments you’re making are truly sustainable.” She advises would-be investors to get to know operators and understand their backgrounds and expertise in the world of sustainability.

Houston also highlights the opportunity for impact investors to go beyond the “E” in ESG with sustainable fashion. For Wearwell, promoting transparency and ethical practices within the fashion supply chain also extends to areas like fair wages, safe working conditions and support for women, who she says are instrumental to the success of the fashion landscape as a whole. “Eighty-five percent of garment workers are women,” she says. “If you can make sure they’re getting paid fairly, that makes a world of difference in their lives and in developing communities.”

With so many touch points along the fashion supply chain and product life cycle in need of improvement, the potential for innovators to step in and move the needle is vast—creating a similarly broad landscape for investors to support those initiatives.

Houston warns investors not to sleep on the opportunity.

“This is the next chapter for fashion,” she says. “No one can deny we’ve seen a rise in fast fashion over the past decade, but the brands that are surviving and have staying power are the ones focused on sustainable fashion.”

For investors ready to reactivate, Kleindl agrees sustainable fashion is an attractive target. “The transformation of the planet toward a more sustainable and greener one, in our belief, is the biggest investment opportunity we have ever seen,” he says. “Bigger than the internet, bigger than the first tech wave. It touches all industries. ” //

CAROLYN VALLEJO  is Middle Market Growth’s digital editor.

On the Cybersecurity: The New PE Firm Team Sport

BY JAMES KOENIG, BRENT T. HOARD AND JEAN L. PAWLUK

Historically, many private equity firms have let their portfolio companies independently manage cybersecurity. Given the increase in data and cyber risks, sophistication of threat actors, and impact and cost of breaches, leading PE firms are taking a new collaborative approach. While portfolio companies are still able to operate independently, PE firms and their deal teams are increasingly using periodic “rapid maturity assessments” to efficiently identify needs, remediate against company and portfolio risk, and drive consistent reporting and solutions across the portfolio.

If the idea of evaluating, monitoring and enhancing portfolio company cybersecurity programs at a portfolio level seems infeasible, think again. Here are four steps you can take to implement a collaborative approach for your portfolio:

1. Determine a common framework to assess maturity and risk across the portfolio. While portfolio companies may use a variety of major information security frameworks (e.g., most commonly ISO, NIST and CIS18), determine a preferred framework around which to organize the portfolio’s assessment and reporting. Crosswalks can readily tie together key controls and enable cohesive reporting and clear objectives regardless of a portfolio company’s chosen framework.

2. Identify current-state maturity, individual portfolio company risks, and common vulnerabilities and needs across the portfolio. The assessment consists of three types of fieldwork: surveys, interviews and document review (e.g., program documentation, assessment reports and in-flight initiatives). Assessments are repeated periodically/annually. Innovative organizations use the assessment results to maintain an enterprise risk register, develop a road map to prioritize and track remediation activities, and benchmark key program maturity controls at the company and portfolio levels.

3. Develop a cross-portfolio maturation plan. By conducting assessments across the portfolio, PE firms

can identify and prioritize key areas for improvement. For example, the PE firm may wish to use a consistent incident response plan across the portfolio companies or identify common breach service providers (e.g., forensics, legal, threat negotiation) that are readily available and understand the entire portfolio. This approach enables the portfolio to leverage economies of scale and purchasing power to secure preferential pricing for scalable security solutions for the portfolio companies (e.g., IAM, threat intelligence or endpoint detection and response).

4. Track improvements over time. Benchmarking facilitates efficient and systematic evaluation of controls and improvements for the entire portfolio and individual portfolio companies over time, enabling better informed investments and strategic decision-making for the organization (and to better prepare a company for sale). Subsequent assessments are even less disruptive, focusing on change during the interim period.

While information security was once viewed as table stakes and a cost of doing business, cyber preparedness and exposure to ransomware and data leaks are impacting PE deal diligence and valuations. It is also far less expensive to have security “baked in” from the beginning than to spend post breach. With some key tools and minimal investment, PE firms are increasingly assessing, measuring and addressing both unique and common vulnerabilities across their portfolios. In this new information economy and cyber risk environment, if you can’t measure it, you can’t manage it! //

In their roles at Troutman Pepper, JAMES KOENIG  co-chairs the firm’s Privacy + Cyber Practice Group, representing global clients in multiple industries; BRENT T. HOARD  works with clients to protect and maximize the value of their data; and JEAN L. PAWLUK help clients implement and enhance information security programs.

PANKAJ GUPTA President, WhiteHorse Capital

Navigating an Aggressive Lending Environment Amid Uncertainty

After a sluggish lending environment last year, deal activity has ramped up in 2024 thanks to pent-up M&A volume, private equity dry powder and a surprisingly resilient economy that is driving performance of middlemarket companies looking for acquisition or growth financing.

While these are welcome developments, the downside is aggressive lending practices are creeping into the market in the form of higher leverage, fewer covenants and less stringent diligence and documentation standards. We believe that to navigate this increasingly aggressive lending environment, it is critical to guard against slipping standards and keep focused on what matters most.

Take the tumultuous geopolitical backdrop, with conflicts intensifying in many parts of the world. These are headline-grabbing events and deservedly so, but their financial impact on American middle-market companies will be relatively limited since these companies’ customers and supply chains are largely in the U.S. Similarly, while the presidential election will command political discourse all year, the election’s outcome will have little impact on these companies, except for sectors with exposure to regulatory shifts.

What matters, however, is the direction of interest rates and the odds of a recession. While inflation is down dramatically, the latest government figures show that it is still running hotter than the Fed’s target. That is a blow to many who hoped the Fed would soon start aggressively cutting interest rates from their 20-year highs. It is likely that rate cuts will be less dramatic than expected, impacting companies’ free cash flow and ability to service debt. Meanwhile, the U.S. has averted a

recession for longer than most expected, but the possibility cannot be ruled out.

Given this backdrop, we believe lenders should avoid aggressive lending practices that can put their own capital at risk, while also imperiling the stability of the underlying companies. We look for companies in noncyclical industries with strong, high-margin cash flows and low capital expenditures, such as business services, technology and software, healthcare and consumer staples. In terms of deal structure, we eschew covenant light loans that do not alert a lender to trouble until enterprise value is compromised. Instead, we favor deals with traditional leverage and fixed-charge coverage covenants. These ensure that if there is performance deterioration, we have time to meet with the company’s leadership and devise a strategy to get back on track.

Sticking to one’s lending principles, not getting drawn into aggressive loan structures, and finding businesses in the right industries with the right cash flow profile is not easy. It requires a robust deal origination engine in place to see steady deal flow. We believe it is not enough to simply have offices in New York, Chicago and Los Angeles. Lenders need their ear to the ground in every corner of the country to tap into regional deal flow. This approach is the surest way to navigate today’s lending environment. //

PANKAJ GUPTA is president of WhiteHorse, U.S. and global head of originations. WhiteHorse provides senior and second lien debt for growth capital, acquisitions, buyouts, refinancing and balance sheet recapitalizations for middle-market companies in the U.S. and Europe.

PAUL PINCUS, ESQ. Partner, Ortoli Rosenstadt LLP

The Importance of Representations and Warranties Insurance in M&A

If you are a business owner considering a sale of your company or a first-time buyer, you may never have heard of representations and warranties insurance (RWI). However, experienced buyers, sellers and M&A professionals know RWI is a frequently used tool for facilitating transactions that can benefit both buyers and sellers.

In every sale of a business, sellers will be required to make specific written statements in the purchase agreement about their businesses (representations) and warrant that those representations are true (warranties). Those representations and warranties usually relate, among other things, to ownership of equity interests and assets, authority to transact, corporate organization, financial statements and liabilities, customers, contracts, intellectual property, compliance with laws, liens, litigation and claims, taxes, employees and benefits. In a typical deal structure, if

those representations and warranties are inaccurate, sellers must then indemnify (make whole) buyers for any resulting losses buyers suffer (subject to customarily negotiated survival periods for claims, deductibles, caps and other limitations on recovery).

What Is RWI?

RWI is a form of transaction insurance that is usually purchased by a buyer, although sell-side policies are also available. RWI can be used either to supplement a traditional seller indemnity for breaches of its representations and warranties or to fully replace a seller indemnity. In such a “no seller indemnity” structure, which has become more prevalent in recent years on larger deals, a buyer looks only to the insurance, and not to the seller, to recover losses arising from breaches of a seller’s representations and warranties (unless the seller commits fraud).

Despite its origins in the PE market, the use of RWI has become increasingly popular in the past 10 years across all types of buyers.

RWI originated in the private equity market where, on the sell-side, PE firms wanted to distribute the proceeds from sales quickly to their limited partners and not retain long post-closing indemnity obligations. On the buy-side, PE firms did not want to be put in the position of having to bring indemnity claims against founder/management team sellers who remained with the acquired company post-closing. Despite its origins in the PE market, the use of RWI has become increasingly popular in the past 10 years across all types of buyers (PE and strategic), industries and transaction types, driven by what was, until very recently, an increasingly seller-friendly market. Often, sellers and their financial advisors will require buyers to agree to an RWI construct at the outset of a deal even to participate in an auction process. RWI has become the norm in deals over $50 million in value across all industries and is currently available in sales as low as $20 million in value.

The cost of RWI (currently about 3.5%-4% of the coverage amount for deals above $50 million in value, including the premium, underwriting fees and broker’s fees) is typically split by buyers and sellers. There will be an overall coverage limit (usually 10% of the transaction price, although insurers are sometimes willing to provide higher coverage levels), and claims brought under an RWI policy will be subject to a deductible (historically, about 1% of the transaction price).

What Are the Benefits of RWI to Sellers?

• Sellers have very limited post-closing exposure for breaches of their representations and warranties (typically, half of the RWI deductible; subject to agreedupon caps, certain matters that are excluded from RWI coverage and losses in excess of the RWI coverage amount; and fraud). In a “no seller indemnity” structure, a seller can have no exposure for breaches of its representations and warranties, unless it relates to fraud.

• Sellers do not need to leave a meaningful portion of the sale proceeds in escrow for 12-24 months

(escrow amounts are often limited to half of the RWI deductible).

• RWI makes negotiation of the purchase agreement easier. Sellers do not need to strenuously negotiate for “qualifiers” to their representations and warranties (such as “materiality” and “knowledge”) since buyers will primarily look to insurance for losses they incur.

What Are the Benefits of RWI to Buyers?

• Buyers can make more competitive offers due to reduced escrow amounts and reduced seller exposure for indemnification.

• Buyers do not have to make claims against or sue sellers who are continuing as members of the acquired company’s management team.

• Buyers can get coverage for greater amounts than sellers might agree to be liable without RWI and for longer time periods than sellers might agree to be liable without RWI.

• RWI makes negotiating representations and warranties in the purchase agreement easier since sellers, for the most part, will not have to stand behind them.

Availability of RWI on Smaller Deals

RWI is generally not available on deals under $20 million in value for several reasons:

• Underwriters’ reluctance to issue policies without certified financials or a quality of earnings report, which smaller businesses may not have.

• Minimum fees (approximately $150,000-$250,000 for insurance coverage, underwriting fees and broker’s fees) that can make RWI not cost-effective.

• Additional professional costs for buyers to prepare comprehensive legal, accounting, tax and insurance due diligence reports required by RWI insurers and respond to underwriting questions that arise.

• Buyers’ belief that in smaller deals sellers should have “skin in the game” and be responsible to stand behind an indemnity for buyers’ losses.

In today’s competitive M&A market, savvy dealmakers know the importance of using all available tools to get deals done. In transactions above $20 million in value, the benefits of RWI to both sides can justify its cost and help facilitate an amicable sale. //

PAUL PINCUS, ESQ . is a partner at the international law firm Ortoli | Rosenstadt LLP and head of the firm’s Mergers & Acquisitions practice. He can be reached at (212) 8298931 or php@orllp.legal.

FEBRUARY 2023

MARCH 2022 DECEMBER 2023 NOVEMBER 2022 NOVEMBER 2023 APRIL 2023 JUNE 2022 NOVEMBER 2023

APRIL 2023 MAY 2022 OCTOBER 2017 Boxwood Partners, LLC is a boutique investment bank based in Jupiter, Florida with offices in Richmond, Virginia. Boxwood Partners combines a unique blend of senior-level transaction advisory, business operating experience, and proven process execution skills to give its clients a distinct advantage in the market.

ACG LEGEND AND BUSINESS DEVELOPMENT PROFESSIONALS TO WATCH Features

ACG LEGEND AWARD

42 52

A look at the career of this year’s ACG Legend honoree, Jay Jester of Plexus Capital. ACG’s CEO and board of directors handpicked the winner of this year's ACG Legend Award, which recognizes an individual who has demonstrated excellence in their field, a long-standing commitment to ACG and contributions to the ACG dealmaking community.

BD PROS TO WATCH

This year’s M&A Business Development Professionals to Watch honorees across private equity, investment banking and corporate development reflect on 2023 and their goals for the year ahead.

LEGEND The A CG

How Plexus Capital’s Jay Jester built out the ACG network—and his own business development prowess—from Boston to Florida

BY DANIELLE FUGAZY

BY ANNA BARZIN

THE ACG LEGEND AWARD IS SPONSORED BY

PHOTOS

He’s incredibly smart and he’s genuine. He wants to know about you. He’s a super impressive person and I am glad ACG brought us together.

PAM HENDRICKSON Vice Chairman, The Riverside Company

When I met Jay Jester, I was a fairly green reporter. I had been covering venture capital when the dot-com bubble burst in the late ’90s and I quickly pivoted to covering private equity. I had an idea of what private equity was, but I took “a fake it until you make it” approach to this new, daunting beat. I wasn’t sure how I was going to go about getting “high powered” people to let me in.

In 2003, I was sent to cover a new type of event ACG was trying called ACG Capital Connection. This was the first time I remember meeting Jay Jester, one of the organizers of the event. Despite my being a newcomer, Jester treated me like he treated every other person he comes across: with respect and kindness. He had a sincerity to him that I was finding rare in the industry at the time.

For this story, I spoke with Jester in February about my first impressions, his time in the industry and his connection to ACG.

“ACG needed a new growth engine, so Stuart Mathews [president of Metapoint Partners], Ben Procter [a senior partner with Watermill Group] and I came up with the idea to organize what was basically a ‘private equity trade show,’” recalls Jester. “We worked with Bill Padnos, who ran InterGrowth [now called DealMAX] at the time, to launch the first Capital Connection at InterGrowth in 2003.”

The group sold Capital Connection tables for $495 each to about 30 private equity groups, Jester recounts. Each of those groups put out various product samples and brochures, “like they do at trade shows,” he says. “The Capital Connection concept took off very quickly. Within a couple of years, just about every chapter added one to their annual agenda and the regions began organizing larger events.”

It was ideas like this and his ability to foster strong relationships that pushed Jester into quickly becoming an integral part of the ACG fabric—and helped him to build a highly successful 30-plus-year career in the private equity industry.

AN ACG IMPACT

Jester’s lasting impact on ACG reaches far beyond Capital Connection.

He was also part of the team that founded the ACG New York Wine Tasting event. Around 2005, the Boston chapter he was part of had grown larger than ACG’s New York City chapter. ACG Global asked some of the ACG Boston board members to travel to New York and help the local chapter boost its numbers.

“It was hilarious and really fun for a bunch of Boston guys to roll into a New York ACG board meeting, offering our ‘help,’ especially in the wake of the 2004 Red Sox World Series,” he says.

“We mostly talked a bunch of sports trash but then got down to business and all came up with the idea for the wine tasting event. Trash talk aside, the ACG Boston/New York partnership was awesome

and well ahead of its time. We later co-hosted ski events and I always recall each chapter going out of its way to welcome visitors from the other,” Jester says. Many years later, when the wine event became a huge success, the New York board always let Boston-based Audax Group, where Jester previously worked, participate because of the firm’s role in founding the event.

Around 2011, Jester was also tapped to be an ambassador when ACG decided to expand internationally. Invited by Pam Hendrickson, vice chairman of The Riverside Company, to join the so-called ACG Euro Tour, the pair traveled to several European cities to launch chapters.

“I remember the Wi-Fi going out on a train we were on, so we played ‘Name That Tune’ with a whole bunch of people on the train. We laughed our heads off,” says Hendrickson. “With Jay’s easy-to-be-with personality, smart ideas and humble demeanor, he is an easy pick for just about anything.”

All of these contributions were predated by one of his very first in the early 1990s, when Jester would also find himself leading the charge in creating Tampa’s ACG chapter. When Jester moved to Tampa to join Florida Capital Partners in 1992, he left his Charlotte ACG chapter to learn there was no Tampa counterpart. Jester—along with Dave Felman, a lawyer with Hill Ward Henderson, and Penny Parks, CEO of Links Financial—set out to fill that gap.

“This was pre-internet. You needed a way to find a network and deal flow, and ACG had to be part of that equation,” says Jester. “We knew that Tampa would be a great market, but we also knew that it would take a ton of time to get the chapter rolling, and we all had day jobs. I made the mistake of stepping out of the first meeting to take a quick call. When I returned to the room, I learned that I’d been elected the first president of ACG Tampa. It was a lot of work, but the organization helped me connect with the entire Gulf Coast deal community.”

JESTER’S RISE IN BUSINESS DEVELOPMENT

Jester’s passion for ACG was a gift to the organization. However, the benefit was mutual. ACG has been a big part of Jester’s career and life as he rose to be one of the best original business development people in the business. It was Jester, notes Hendrickson, who first coined the phrase “ACG: All the people you need to know, before you need to know them.”

“Each time I moved to a new city, ACG became the foundation of my local network,” says Jester.

Jester’s career began in the Southeast. After graduating from University of North Carolina at Chapel Hill,

I’m not sure if there’s anyone in this industry who is as well networked or has the depth of relationships that Jay has across the industry.

YOUNG LEE Partner and Co-President, Audax Private Equity

he landed a job at Bowles Hollowell Conner & Co. in Charlotte, North Carolina, in 1990. BHC was one of the early non-Wall Street M&A boutiques. Jester worked for two years as an analyst at the firm. He also worked closely with Chris Williams and Hiter Harris, who later went on to found Harris Williams. Jester says he was happy at the time but really had a love for small businesses and wanted to do more to help them.

Raised in Greensboro, North Carolina, Jester developed a love for small businesses through his own family’s company. After World War II, Jester’s grandfather founded a business selling class rings to college students. Over the years, the company evolved into a promotional products distributorship. “I worked most summers and many holidays in the business, which was HQ’d in my grandparents’ basement,” says Jester. “Learning the nuances of a family business and seeing how my grandfather and father loved their employees, their customers and their suppliers really shaped my career.”

After completing his analyst rotation in Charlotte, an opportunity arose to interview with Florida Capital Partners, the small deal affiliate of Chemical Venture Partners in Tampa. “They were an emerging firm and they wanted someone to do business development. One of my fellow analysts, Mike Peters, made the introduction and I pretty much accepted on the spot,” says Jester. “The biggest gift was that I got to be Glenn Oken’s wingman. Glenn was the OG pioneer of the mid-market BD partner. It was the early 1990s, and the middle market was just getting going. Today, every firm knows how critical BD is, but it was still a new concept in 1992. To this day, I believe that Glenn is the best, the most creative and most sincere connector in the entire middle market. Working for Glenn was a game-changer for me.”

MAKING MOVES

Eventually, Jester made his way to the Audax Group, a move facilitated in part by ACG.

Jester met Audax’s founders, Geoff Rehnert and Marc Wolpow, at InterGrowth right when the pair announced they were leaving Bain Capital to start a new firm. Rehnert had built a strong personal brand within ACG and he knew that robust deal flow would be critical to the launch of the equity business at Audax. They asked Jester to join the new venture in Boston.

At this point, Jester had a big decision to make. He had already moved his wife, Janice, from North Carolina to Florida. This time, the change meant moving his now-pregnant wife and two children from Florida to Massachusetts, where they would once again start over.

“I’ve been blessed with awesome partners over the years, but there is only one Janice. We will be married 31 years in June. We had a great life and a great community in Tampa, but getting in on the ground floor of the Audax story was a once-in-a-lifetime opportunity,” Jester says. “Aligning with Geoff and Marc was the easy part of the decision, but moving my young family up to the land of ‘The Frozen Chosen’ was the challenge. Janice made it happen. And, of course, I found a network and a new home with ACG.”

Jester had an extremely successful 20-year career with Audax. These contributions are memorialized inside the watch that Jester’s partners gave him as he headed back to North Carolina to begin his new adventure with Plexus Capital, an SBIC fund, in 2019. During his two decades in Boston, Jester led a team that sourced almost 25,000 transactions from 2,520 different firms and 6,924 individual contacts. As of March 31, 2019, these sourcing efforts yielded 124 closed platform deals and 756 add-on acquisitions.

“The impressive thing about Jay is he’s always reinventing himself. It’s not only that he has great sales skills, it’s that he has great relationship skills,” says Riverside’s Hendrickson. “It works for him in deal sourcing as he did for Audax for so many years, and it works for him with Plexus as both a partner and a fundraiser. He’s incredibly smart and he’s genuine. He wants to know about you. He’s a super impressive person and I am glad ACG brought us together.”

Jester left an indelible impression on all those

Clockwise from top: Jester speaking at the ACG European Capital Tour in Frankfurt, Germany, in 2012; at the ACG Capital Connection dinner at Fenway Park in 2006; receiving the Peter Hilton Award from the ACG New York chapter with son Walker in 2018; interviewing former GE CEO Jeff Immelt at ACG InterGrowth in 2018; receiving the ACG Visionary Award from the ACG Boston chapter, with his wife, Janice.

who knew him at Audax. “I’m not sure if there’s anyone in this industry who is as well networked or has the depth of relationships that Jay has across the industry. He takes the time to know people at a personal level and develop genuine, long-term friendships,” says Young Lee, a partner and co-president of Audax Private Equity. “What really distinguishes Jay—in an industry in which relationships can often seem transactional—is his authenticity. It goes far beyond the Southern charm you might expect from a proud North Carolinian. He really cares and it comes through in everything he does, from his relationships and his attention to detail to his enthusiasm for the job and his unique ability to make everyone around him more effective. It’s infectious.” Lee stresses the positive impact that Jester

had on Audax Private Equity. “I’d argue that our team-based approach remains one of the enduring legacies of Jay, our founders and our earliest employees,” he says.

When he made the bold move to join Plexus Capital after 20 years at Audax, Jester was brought in to launch a control equity fund, which closed at $204 million in 2022. Michael Painter, co-founder and managing partner with Plexus, recalls meeting Jester around 2007 or 2008 and their early conversations about the business side of Audax. “He was always so gracious about spending time with me,” remembers Painter. “He was always willing to share best practices and be helpful. In 2016, we said, ‘You need to start a buyout fund for us.’ He was such a great fit.”

A lot went into the decision to move back South. Jester had been in Boston for 20 years and had recently turned 50. “We were new empty nesters. I also lost my father to a long battle with Alzheimer’s a few years earlier. My life has been a spectacular and delightful journey, but Dad’s passing was a powerful reminder that it is not an endless journey,” says Jester. “The ‘second chapter’ at Audax worked out about a thousand times better than I could have ever dreamed, and I felt like I had gas in the tank for another adventure. Plexus caught me at the perfect moment. I am super excited to be back in the small market. I am trying to take the many lessons learned and apply them again. It’s energizing and often terrifying to be running a fund and building a firm, but it’s working and it is great fun.”

In April, Jester marked five years at Plexus. The firm has an internal channel used to share accolades for when employees do great things. Despite being fairly new to the firm, Jester has racked up more kudos than anyone else. “Our firm can’t even remember life without Jay. And he has such deep relationships,” says Painter.

Many of those relationships were established through Jester’s involvement with ACG. “ACG changed my career and arguably my life. A huge percentage of my very best friends are ACG members,” says Jester. “ACG was an anchor for me in four different cities and helped me build a brand and a network very quickly.” //

DANIELLE FUGAZY is a freelance writer who has covered private equity for more than 20 years. She is based in Glen Cove, New York.

This year’s Private Equity Business Development Professionals to Watch list was curated by Middle Market DealMaker editors based on more than 100 nominations from the ACG dealmaking community.

From those nominations, we selected 10 private equity honorees who we feel are standout representatives of their profession and who reflect the diversity of the field. We compiled the list after carefully reviewing all the submissions and the nominees’ achievements during 2023.

We then asked each of our 10 honorees to discuss their proudest professional accomplishment from last year and to share a goal for 2024. The following pages feature their responses, along with a memorable piece of career advice from each honoree.

HEATHER LEWIS

Vice President of Business Development, WILsquare Capital

St. Louis, MO

PROUDEST 2023 PROFESSIONAL

ACCOMPLISHMENT: I am most proud of the relationships I have made. My achievements in 2023 reflect my commitment to building and sustaining meaningful relationships and contributing to the continued success of WILsquare in the lower middle market. I focused on cultivating strong connections with key professionals, including investors, lenders, intermediaries, business owners and other industry influencers. Through strategic networking and relationship-building initiatives, I played a pivotal role in enhancing the visibility and reputation of the firm. These efforts, in conjunction with the work of Andrew Scharf, John Curry and Jack Randazzo on the WILsquare team, resulted in the closing of four add-ons and one new platform for the year. I am fortunate to work alongside a fantastic team that allows me to succeed.

PROFESSIONAL GOAL FOR 2024: In 2024, I hope to continue building on the remarkable relationships I’ve made while growing personally in the industry. As a member of the investment committee, I want to keep adding value in generating, enhancing and executing new investment theses. The quality of our pipeline will continue to be a strong reflection of our partnerships across the firm and our commitment to businesses that value strong cultures.

JOE SOLANO

Principal, Garnett Station Partners

New York, NY

PROUDEST 2023 PROFESSIONAL

ACCOMPLISHMENT: My proudest professional achievement in 2023 was the progress Garnett made in the continued development of its thesisbased investment process. Garnett’s founders, Alex Sloane and Matt Perelman, have ensured that Garnett has consistently taken an offensive stance, actively identifying promising sectors where the Garnett playbook can exert maximum influence. In the challenging deal environment of the past year, our intensified efforts in this area bore fruit, resulting in seven new platform investments. Notably, four of these were directly linked to internally cultivated theses. I take immense pride in our firm’s dedication to this formalized process, underscoring our commitment to strategic foresight and proactive investment practices.

Joe’s biggest accomplishment in year one at Garnett Station has been establishing further trust with the firm’s banking relationships. With Joe in the seat, bankers better understand Garnett Station’s investment approach and areas of focus.

INVESTMENT BANKER

PROFESSIONAL GOAL FOR 2024: In 2024, I will further Garnett’s existing reputation as a preferred partner for top-tier founders and entrepreneurs in our core verticals—consumer, business services, and health and wellness. Our track record of 27 platform investments speaks volumes, with each founder/CEO serving as a reference to future partners. This reputation is built on delivering on our promises and being reliable collaborators. Moreover, my focus extends to nurturing and expanding our external relationships. Building trust with referral sources, brokers and advisors is crucial.

SCOTT MORRISON

Vice President, Business Development, Banyan Capital Partners Toronto, ON

PROUDEST 2023 PROFESSIONAL ACCOMPLISHMENT: In 2023, my proudest moment was spearheading the launch of Banyan’s Operating Partner Network. This initiative partners us with industry leaders to find and acquire businesses in their areas of expertise. With partners in the industrial safety and food service/retail sectors, we’ve generated significant market awareness, established valuable industry relationships and sourced deals from both intermediary and proprietary channels. Heading into 2024, we are well-positioned to continue leveraging our gained knowledge and connections to convert these opportunities into successful platform investments.

PROFESSIONAL GOAL FOR 2024: Upon being selected as co-chair of ACG Toronto’s DealSource North, I was honored by the opportunity to lead one of the industry’s most anticipated and popular events of the year. In 2024, one of my professional goals is to continue deepening my role in the private equity community. By actively contributing insights, collaborating closely with key market players and positively representing the market, I hope to further elevate Banyan’s reputation in the market and position private equity as an attractive partnership and exit option for middle-market business owners across Canada.

JENNA SCHLAGETER

Director, Head of Business Development, Bow River Capital Denver, CO

PROUDEST 2023 PROFESSIONAL ACCOMPLISHMENT: 2023 was a challenging year for new platform deal flow. To help offset decreased volume, I thought creatively about how we could leverage technology. During 2023, I sourced and implemented a new tech-enabled tool to help drive proprietary opportunities. As a result, our team saw 50+ new deals and signed three add-ons. It was rewarding to have conversations with sellers that we would not have reached otherwise. I am also honored to have been nominated to serve as the chairman of DealMAX 2024. Face-to-face interactions remain important in my role, and this is the ultimate dealmaking event to increase connectivity. I am so proud of the committee and look forward to working alongside such an esteemed group of peers.

PROFESSIONAL GOAL FOR 2024: My goal this year is to work with my team to close three new platforms. We have refined our investment themes so that when we see the right assets, we can move forward with conviction. To achieve this, I will aim to convert more IOIs to management meetings. Since we typically invest in founder-backed businesses, meeting the management team is our top diligence item. The team is what gives us conviction to be the right partner to drive growth. Partnership with strong management teams drives value creation and is definitely the most exciting part of our jobs.

NICK IRION

Principal, Head of Business Development and Capital Formation, L2 Capital Philadelphia, PA

PROUDEST 2023

PROFESSIONAL

ACCOMPLISHMENT: L2 has a very team-oriented culture in which we all move forward together. I’m a believer that we all win or fail together and that everyone needs to pitch in and share responsibility. Our firm was born out of the motto of our founder, Bob Levine, that L2 is “building legacies like family,” and our team really pulled together in 2023. While 2023 had its challenges, it was probably the most productive year in our history. We completed three platform investments, one add-on, exited one company, had a second closing on our fund and did some amazing work with our portfolio companies.

PROFESSIONAL GOAL FOR 2024:

When I joined L2 on the investment team, we didn’t have a dedicated origination function. L2 has a long history of investing in private companies, but historically everyone shared responsibility for business development. That ultimately pulled all team members in a lot of directions. I took the reins on professionalizing and building our origination systems and processes for the long term. And while L2 has always had a great reputation in the market, we have not always been the most vocal about our success. In 2024, I’m putting a lot of effort into communicating the value of the L2 brand and our competitive differentiation through both origination and fundraising as I also lead our capital formation function.

MATT STRANZ

Managing Director, Head of Business Development, Great Range Capital Mission Woods, KS

PROUDEST 2023 PROFESSIONAL

ACCOMPLISHMENT: I’m most proud of initiatives that led to numerous proprietary opportunities across select industries in specific markets. With a focus on building organic new relationships and deepening those already established, origination efforts can be curated to the characteristics of the specific market. Each market and each culture is unique, and this is no different than any business. The mindset of “relationships drive transactions” underscores the business development approach every day.

PROFESSIONAL GOAL FOR 2024: At Great Range Capital, we are investing in the Midwest. I look forward to working with and expanding upon our Market Ambassador Program in select markets.

Scaling these requires significant time and investment in the relationship. To enhance this, we will leverage data platforms in new ways with predictive analytics to help drive our sourcing efforts. Broadly, we expect the market this year to rebound. We look to enhance our presence across the Midwest and, all the while, cover our current traditional and nontraditional sources of new opportunities.

ALEX RAY

Director, Business Development, Comvest Partners West Palm Beach, FL

PROUDEST 2023 PROFESSIONAL ACCOMPLISHMENT:

Coming into 2023, we developed a new go-to-market strategy for our business development team built around industry verticalization. As a result of that strategic shift, we saw a huge improvement in our capture across our key verticals, as well as inclusion in more limited and bespoke processes. We’ve been pleased with the outcome and attribute those early wins to the deepened relationships we’ve developed with key industry contacts. We also saw our deal volume and market share grow in 2023 and were very active with several closed transactions, which our team is proud of, especially given the challenging M&A environment. I’m grateful for the efforts of the entire Comvest team who made that possible.

PROFESSIONAL GOAL FOR 2024: Most importantly, we want to continue the momentum of 2023 into 2024, further optimizing our marketing systems and processes, as well as enabling our team members across the firm to support and enhance our sourcing efforts. Building upon our culture of business development is important, given every member of the team participates in BD to some degree, and we consider it the lifeblood of the work we’re doing.

MIKE ALBERTS

Principal, Head of Business Development, Cohere Capital Boston, MA

PROUDEST 2023 PROFESSIONAL ACCOMPLISHMENT: In 2023, I spearheaded a tech-enabled services industry event in the Northeast that included a curated 1x1 deal sourcing portion with a broader networking reception to follow. We had a strong turnout of investment bankers and private equity investors for both portions of this inaugural event with an almost 2-to-1 ratio of investment bankers to private equity investors at the reception. This event and my other efforts throughout the year were focused on cultivating meaningful relationships within the broader M&A community and finding ways to collaborate with not only investment banks but other private equity firms, to provide value to my industry counterparts while driving value for Cohere.

The better professionals know how and where to spend time to put your firm in the best position to deploy capital. Alex has successfully displayed this at two very different capital providers.

INDUSTRY PEER

PROFESSIONAL GOAL FOR 2024: In 2024, I plan to lean into the technology solutions we’ve invested in over the past few years to free up my time for more impactful interactions with intermediaries, founders/management teams, our portfolio companies and our team at Cohere. Leveraging repeatable systems and automation to help the firm (and myself) stay organized and free to be present in all of our day-to-day interactions is paramount to continued success in this role.

KATIE NOGGLE

Partner, Business Development, Align Capital Partners Cleveland, OH

PROUDEST 2023 PROFESSIONAL ACCOMPLISHMENT: I’m proud of our firm’s growth and the role I played in achieving key milestones. As the head of business development, I am very happy that we hit a new record for the annual number of unique intermediaries (445+) who showed us a potential platform opportunity in 2023—despite the overall decline in transaction volume across the industry. I also helped execute the launch of a new strategy (Align Collaborate) focused on providing equity capital to independent sponsor transactions. I was in a unique position to leverage all the marketing and deal sourcing experience gained since joining Align at inception in 2016 (back when our brand was not yet established in the crowded PE industry).

PROFESSIONAL GOAL FOR 2024: My number one goal always needs to be centered on supplying our team with the best possible selection of new deal opportunities to help reach our pace of investment and return targets. To further support that effort in 2024 and beyond, I am involved in several projects related to improving our firm’s foundational data sets. My goal for 2024 is to help design and build the right infrastructure, so that over time we’ll have a larger and more refined dataset to provide increasingly differentiated insights into the lower middle market.

Katie is the best of the best; not only did she craft Align’s business development from scratch in the firm’s infancy, but that same model is operating so effectively that she sees more volume than most of Align’s competitors.

M&A PARTNER

SEAN A. HEALY

Vice President, Head of Business Development, Keswick Partners Charlotte, NC

PROUDEST 2023 PROFESSIONAL ACCOMPLISHMENT: Keswick had a busy year in 2023. We expanded our team, implemented a new CRM and closed three platforms in our first 12 months of operation after having raised our inaugural fund in the fall of 2022. These successes came despite a challenging market environment. Market deal flow was reportedly down 25%-40% from the prior year, driven by interest rate hikes and widespread market uncertainty. Despite the headwinds faced, we managed to hit the ground running. The volume of deals we sourced, actioned and closed exceeded industry standards for a firm of our size, according to SPS Bain’s 2023 benchmarking report. I’m proud of the role I played in having laid the foundation for such a solid BD function here at Keswick.

PROFESSIONAL GOAL FOR 2024: With our presence in the market now well established, we can shift our attention to focusing on what I enjoy most, which is building quality relationships with like-minded professionals. We recently instituted several upgrades into our CRM that are designed to illuminate the value of the relationships we maintain with all forms of M&A stakeholders, including intermediaries, lenders and service providers alike. I look forward to leveraging these insights to inform our future efforts as I anticipate them translating into improved deal quality and conversion metrics in 2024 and beyond.

Best Career ADVICE

KATIE NOGGLE: Sometimes your job gets more than its fair share of your time and energy, while other days family obligations take priority. In the long run, both sides can get the best version of you but not simultaneously in every moment.

SCOTT MORRISON: Approach every interaction with the mindset of adding value to others. Focus less on personal gain and more on what you can offer.

JENNA SCHLAGETER: Find your own style and be authentic. Early in your career, work with a variety of senior co-workers and take what you like from each one to craft your voice.

MIKE ALBERTS: If you constantly focus on how to help other people achieve their goals, your success won’t be too far behind. Getting to know what makes someone else tick and then helping them succeed is more fun anyway.

ALEX RAY: A quote I came across early in my career that has stuck with me is, “Dig your well before you’re thirsty.” For me, that translates into building relationships with a long-term mindset, always bringing value to your network from the outset.

JOE SOLANO : Take the call, hop on the plane, invest the time.

MATT STRANZ: Our time in a day is limited, but find time to make a difference.

SEAN A. HEALY: My mentor at West Point taught me to accept fault for mistakes even when I didn’t make them and to remember that the grass is always greener where you water it. I translated that into a simple mantra of “own it,” which is a philosophy I continue to live by.

NICK IRION: Eisenhower said, “What is important is seldom urgent, and what is urgent is seldom important.” Private equity is full of endless immediate requests. Over time, I’ve learned to step back and be strategic, spending adequate time focusing on long-term initiatives that will move the firm forward.

HEATHER LEWIS: Relationships matter, and you’re only as good as the people you surround yourself with!

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This year’s Investment Bankers to Watch list was curated by Middle Market DealMaker editors based on input from the ACG dealmaking community.

From the nominations we collected, we ultimately selected 10 honorees who are excelling in their M&A advisory work and who reflect the diverse set of professionals, firm sizes and sector expertise within the investment banking ecosystem. We compiled the list after carefully reviewing all the submissions and the nominees’ achievements during 2023.

We then asked each of our 10 honorees to discuss their proudest professional accomplishment from last year and to share a goal for 2024. The following pages feature their responses, along with a memorable piece of career advice from each honoree.

JAVIER SAENZ

Vice President, Business Development, Alantra New York, NY

PROUDEST 2023 PROFESSIONAL

ACCOMPLISHMENT : I firmly believe that midmarket investment banks destined to lead in the coming years will be those that move away from traditional dealmaking toward a model driven by technology, data and AI. This year, we’ve strategically positioned our U.S. sector-focused teams at the forefront of this shift. We’ve embraced advanced technologies, leveraged comprehensive data resources and tailored our workflows to align with this approach. These efforts have significantly improved our daily operations and led to substantial results, particularly in deal sourcing, including a continuous flow of meetings with key prospects and new leads, numerous near-term actionable opportunities and several new client engagements.

PROFESSIONAL GOAL FOR 2024: As we move forward into 2024, I will focus on further embedding this approach into our deal sourcing and execution strategies. While we have established a solid foundation, fully implementing these changes remains an ongoing journey that requires adaptations tailored to each sector we cover. It’s also worth noting that although AI has revolutionized many industries, its application in investment banking is still emerging. We are starting to benefit from it, but the true scope of its possibilities is still ahead. Therefore, it will be key to remain at the forefront of technological innovation in the months ahead, consistently upgrading and adapting our methodologies to maintain our competitive edge.

ROB MARTINO

Director, Financial Sponsors Group, Raymond James New York, NY

PROUDEST

2023 PROFESSIONAL

ACCOMPLISHMENT: After spending over seven years with Raymond James in San Francisco, I relocated to New York in 2022 to enhance our financial sponsor coverage efforts on the East Coast. Since the transition, I have broadened our coverage footprint and strengthened relationships with financial sponsors across the country. Despite the challenging market environment in 2023, I am proud of our team’s success in delivering strong outcomes for our clients and building momentum going into 2024.

PROFESSIONAL GOAL FOR 2024: In 2024, my primary professional objective is to support the growth of the Raymond James platform through increased collaboration with private equity firms. As we continue to expand our team and product offerings, my focus is to deliver tailored solutions to meet our clients’ needs.

Javier is dedicated to transforming the conventional relationship-based approach to deal sourcing into a model driven by data and AI.

COLLEAGUE

LEX ESPINOZA

Associate Advisor, Blue Sky Business Resources Clemson, SC

PROUDEST 2023 PROFESSIONAL

ACCOMPLISHMENT: I’m pretty proud of significantly increasing engagement between Blue Sky and business owners, CEOs and founders. This helped me source over $750 million in pitched deals. However, I’m most proud of being able to source, help lead and work with a biotech startup. This was my first experience ever in building a relationship with a CEO, helping the company position itself in the best way to raise capital and helping my executive team get it done. Going from being just a few months out of Clemson University to working on a capital raise with a company I truly believe in and the first CEO I ever spoke to really encouraged me to work hard and keep looking forward.

PROFESSIONAL GOAL FOR 2024: It’s quite simple: to identify and work with as many business owners and CEOs as I can to help them be in the best position to accomplish their goals ... and make us a ton of money!

MAX GOLEMBO

Vice President, Lincoln International Chicago, IL

PROUDEST 2023 PROFESSIONAL

ACCOMPLISHMENT: In the past year, I assumed a new position within Lincoln’s Financial Sponsors Group. Since then, I’ve dedicated myself to building a robust network with the next generation of investors by forging connections with leaders in private equity. My focus has been on cultivating lasting relationships that prove mutually beneficial. Additionally, I’ve undertaken substantial efforts to refine and enrich the firm’s data and intelligence pertaining to our private equity relationships. This ensures that our interactions are tailored to topics of relevance to clients and others in the private capital markets. The dynamic interactions with these professionals have significantly contributed to Lincoln’s impressive success and strong momentum, a source of genuine pride for me.

Lex is simply the best business development specialist I have ever seen. His passion and unique approach to outreach has generated a consistent flow of between five and eight meetings with potential clients each and every week.

INDUSTRY PEER

PROFESSIONAL GOAL FOR 2024: I aim to create value and yield lasting results for clients, encompassing revenue growth, heightened brand recognition and future fundraising opportunities by staying tightly connected and attuned to their objectives. This involves not only understanding our clients’ immediate needs but also anticipating future goals and challenges. Equipped with this comprehensive insight, I strive to orchestrate growth opportunities that drive success for both my clients and Lincoln. This approach ensures that the partnerships I cultivate are dynamic engines of growth, innovation and shared accomplishment.

DULCE MARTINEZ

Head of Client Coverage, Palm Tree LLC

Los Angeles, CA

PROUDEST 2023 PROFESSIONAL

ACCOMPLISHMENT: In 2023, my proudest professional accomplishment was successfully transitioning from the legal sector to a senior investment banking role at Palm Tree, focused on establishing and institutionalizing our business development and sponsor coverage initiatives.

PROFESSIONAL GOAL FOR 2024: In 2024, my primary professional goal is to support Palm Tree’s transaction efforts and broader growth initiatives. I am dedicated to assisting entrepreneurs and business owners in planning for the long term by helping them explore strategic alternatives and engage in comprehensive business planning. Working closely with our clients is always fulfilling, as I value the opportunity to contribute to their long-term success. I will also continue to implement effective coverage strategies with financial sponsors and capital providers, cultivating robust relationships within the business community.

Dulce has an incredible ability to identify needs and connect people and deals in ways that make sense to everyone involved. Her network is remarkably extensive, but most importantly, the connections that she makes are always of the highest quality. COLLEAGUE

KATHERINE MACHNICH

Head of Sponsor Coverage, Progress Partners

Boston, MA

PROUDEST 2023

PROFESSIONAL

ACCOMPLISHMENT: I’m most proud of the growth of Progress Partners’ sponsor coverage efforts in 2023. We’ve tapped into a larger buyer universe than ever before, while remaining focused on our established relationships. One of Progress’ key differentiators is that many of our bankers are former owners/operators and have historically had a strong presence in the strategic community. In 2023, the firm made a concerted effort to enhance our coverage efforts by specifically strengthening our relationships with private equity firms. We’ve assigned industry-specific bankers to underlying portfolio companies and added value by suggesting accretive add-on acquisitions, making introductions to strategic buyers and providing valuation guidance through our knowledge of comparable assets.

PROFESSIONAL GOAL

FOR 2024: I’m excited to see the groundwork we laid in 2023 play out in 2024. The steps we took to deepen our sponsor coverage efforts will bring Progress’ industry expertise in digital media, marketing and advertising to more private equity-backed businesses. The combination of our coordinated strategy and market tailwinds (pressure to generate liquidity, high levels of dry powder, aging portfolio companies) should result in another strong year for Progress Partners. I look forward to seeing our sponsor coverage efforts bear fruit in 2024.

SIMON CINQ-MARS

Manager, Deal Origination, IJW & Co. Montreal, QC

PROUDEST 2023 PROFESSIONAL ACCOMPLISHMENT:

I am extremely pleased with the progress we have made in building IJW’s deal origination practice over the last two years, efforts that significantly accelerated in 2023. The collaboration between our managing director, director and myself has laid the groundwork for a period of explosive growth at IJW. 2023 was a year of significant change and success at the firm. We successfully launched a rebrand back in June and achieved our best year in our history. I’m extremely proud of the impact that our firmwide deal origination strategy has had on performance, with M&A revenue growing 108% year over year, despite the global downturn in activity.

PROFESSIONAL GOAL FOR 2024: I look forward to honing my mentorship and management skills as we continue to expand IJW’s deal origination practice. The mentors that I have had in my career have had a significant impact on my development, and I am excited to pay it forward and mentor a new generation of BD leaders. Our 2024 BD strategy will largely be centered around expanding our presence within the North American technology and consumer sectors. I challenge myself to originate more opportunities within our target industries and deepen our level of engagement with sector founders, CEOs and shareholders. While 2023 was our strongest financial year, we brought in our largest ever client in 2022. I challenge our team to top that in 2024.

ELY FRIEDMAN

Founder & Managing Director, Truce Capital Advisors, LLC Cincinnati, OH

PROUDEST 2023 PROFESSIONAL ACCOMPLISHMENT: Every closed deal is a great success; however, I pride myself on efficiency. One deal in particular was brought to me with an unsolicited offer in hand, which we believed we could significantly improve. In less than five months, we engaged with the client and closed a transaction with a new buyer via a limited process, resulting in a substantial increase in value and cash consideration at close. More than anything, I am most proud that the seller then referred me to another owner with whom we are currently working. Earning the trust of a business owner at such a critical time in their careers is incredibly impactful.

PROFESSIONAL GOAL FOR 2024: 2024 will be an exciting year, as I am launching my own fully independent boutique investment bank in Cincinnati. Following in the footsteps of my many great clients, I’m excited to build out my company and develop a great reputation as a firm in the community.

Ely has displayed his commitment to investing in the [greater Cincinnati] region’s growth and success by navigating countless clients through the sale/purchase of their business [and] becoming a connector of people who have like-minded interests and experiences.

COLLEAGUE

BRANDON BEADOW

Director, RBC Mid-Market Mergers & Acquisitions

Toronto, ON

PROUDEST 2023 PROFESSIONAL

ACCOMPLISHMENT: Despite deal volume being down in 2023, our group had one of its best years on record from an origination point of view. I think it’s a true testament to the strength of our brand and the relationships we continue to build with business owners in the Canadian market. I’m very fortunate to work with a group of high-performing individuals who strive to provide the highest quality services to our clients.

PROFESSIONAL GOAL FOR 2024: In 2023, we welcomed several new additions to our business development team. We are very focused on growth and expanding our market share here in Canada. I look forward to building on our momentum from last year while also being a mentor to some of our newest team members.

CHAD GARDINER

Director, Bridgepoint Investment Banking

Omaha, NE

PROUDEST 2023 PROFESSIONAL

ACCOMPLISHMENT: I played a key role when Bridgepoint advised the 25th largest staffing company in the U.S., LRS Healthcare, on its acquisition by Jackson Healthcare in June 2023. In the words of Steve Lawrence, LRS founder, “It was Chad’s relationship and connections in the staffing industry that really moved the deal forward and how we ended up with the best situation we could ever have been in. A wonderful company, a partnership, and just a great match. It was Chad that was able to bring them to the table.”

Brandon is the epitome of a true business development professional. He’s an extremely personable, empathetic and inviting guy, while also displaying the utmost professionalism and proficiency in his role.

FINANCIAL SPONSOR

PROFESSIONAL GOAL FOR 2024: As an investment banker covering the staffing sector, my goals this year include staying updated on the latest trends and developments in the staffing sector, and analyzing market data, economic indicators and industry reports to identify opportunities and risks. I want to strengthen relationships with existing clients and identify potential new clients, understand their needs and provide valuable insights and recommendations. I plan to expand my network within the staffing sector by attending industry conferences, participating in networking events and building connections with key players.

Best Career ADVICE

heard the phrase “rejection is redirection” from one of position, especially in investment banking.

JOIN THE NETWORK

Middle Market Growth is the official publication of the Association for Corporate Growth (ACG). ACG offers a wealth of resources to members and the broader middle-market M&A community through national and local networking events, digital and print media outlets (including this one), a robust middle-market valuation database, industry education and more. Here are some of the best resources ACG provides that can help you do your job better.

What’s in it for YOU?

As a member of ACG, you gain access to the exclusive network of 15,000 middlemarket M&A professionals that we serve and benefit from the connections that ACG actively facilitates. According to our members, 75% of ACG members do deals with other members, and 86% of members are either very or extremely likely to recommend ACG to a friend or colleague.

Member Benefits

Member-Exclusive Events and Programming: Collaborate with other members and benefit from expert panels and industry insights.

ACG Member Directory Access: Search for and connect with fellow members within ACG’s exclusive directory of middle-market professionals.

ACG JobSource®: Post or search for a job on ACG’s job board for middlemarket professionals.

Member-Only Offers: Claim discounts and deals courtesy of ACG’s partners such as Grata, EPG and others. Check out acg.org/membership-tools/ offers-acg-partners for current offers.

Print Magazine Subscription: Receive print editions of Middle Market DealMaker, Executive and special reports.

WHAT ELSE CAN YOU DO WITH ACG?

Attend an Event

DealMAX is ACG’s flagship dealmaking conference with more than 3,000 attendees, including 800 private equity investors, 675 investment banks, and more than 200 operating partners and strategic acquirers. More than 13,000 one-on-one meetings were scheduled in three days at DealMAX 2023. Check out Dealmax.org for event and registration information.

ACG hosts hundreds of local chapter events annually for middle-market professionals. Whether you prefer a round of golf, wine tasting or an educational lunch, you’ll find it here. Visit acg.org/events to find out what’s happening near you.

Stay in the Know

The Middle Market Growth editorial team produces a weekly email that features thought leadership and news from around the middle market, including our PE Weekly deal roundup. Learn more and sign up to receive the newsletters at middlemarketgrowth.org/subscribe

ACG Media keeps middle-market dealmaking and operating professionals up to date on news, trends and best practices through video, with its GrowthTV channel, and audio, with the Middle Market Growth Conversations podcast. Learn more at middlemarketgrowth.org/category/news-trends.

Power Your Deals

Did you know that GF Data, a powerful middle-market private equity valuation database, is an ACG company? GF Data publishes quarterly reports on M&A, leverage and key deal terms and provides an online valuation database with continuously available valuation comps organized by NAICS industry code. Visit gfdata.com, email info@gfdata.com or call 610-6164607 for more information.

Connect

ACG operates in more than 60 local markets. Visit acg.org/ membership-tools/find-chapter to find your local chapter. You can also email us at membership@acg.org.

As with the other lists, members of the ACG dealmaking community nominated corporate development professionals who focus on identifying acquisition and divestiture opportunities for their organizations.

Middle Market DealMaker editors compiled a list of 10 of those professionals whose M&A engagements in 2023 drove positive results for their companies. The honorees represent organizations across a range of sizes and industries, reflecting the wide spectrum of corporate strategic acquirers that interact with ACG.

Read on to learn more about the honorees’ proudest achievements over the past year, what they’re striving for in 2024 and a piece of advice that helped them get where they are today.

EVAN SHUFFLEBARGER

Vice President, M&A, HeartLand, LLC

Kansas City, MO

PROUDEST 2023 PROFESSIONAL

ACCOMPLISHMENT: In 2023, HeartLand transitioned from Sterling Investment Partners to PPC. The culmination of this transaction marked the peak of four years of dedicated efforts from our entire team across the country. During the past four years, I led or assisted in the sourcing, diligence and integration of 17 acquisitions, more than doubling HeartLand’s footprint. Leveraging my data analytics experience, I helped start up what’s become a best-in-industry business intelligence team. I also managed various other non-M&A projects that accelerated enterprise value creation, contributing to HeartLand achieving its strategic objectives ahead of schedule. This successful recap not only marks my proudest accomplishment of 2023 but has also opened new doors for continued rapid growth and opportunity creation across HeartLand.

PROFESSIONAL GOAL FOR

2024: In early 2023, HeartLand closed on its largest company to date. HeartLand also went on to complete acquisitions of several other market leaders through the balance of the year. My goal in 2024 is to continue to stay flexible and disciplined in our approach to M&A. We can’t control the market. I can cultivate enough horsepower and capacity with my team to be able to work through another record-setting deal—or several at one time with various degrees of seller sophistication. Hitting a home run is great, but singles and doubles keep the line moving, too.

ALEXANDER CURTI

Vice President, Strategic Growth, Odevo Atlanta, GA

PROUDEST 2023 PROFESSIONAL ACCOMPLISHMENT:

In June 2023, I set off to learn a new industry for the fourth time in my career and became Odevo Group’s first U.S. hire. I was reminded how energizing (and difficult) it is to build relationships in a new organization while at the same time learning the ropes of an entirely new industry. By August, I was running full speed on three simultaneous acquisition processes, one of which has since closed. I am most proud of the momentum we have gained as a team against our ambitious U.S. growth plan and the acceleration I have added to those ambitions despite the steep learning curve. I am also proud of the relationships I built in 2023 and the growth I experienced from those connections, both personally and professionally.

PROFESSIONAL GOAL FOR 2024: I am proud of what our team achieved in 2023 and my main focus will be to continue that momentum in 2024. More specifically, I hope to continue welcoming fantastic companies to the Odevo family, continue refining our U.S. M&A strategy and continue fine-tuning our process. We have a high rate of deal conversion because we have a great team and an efficient process. That said, I am a firm believer that we can always be better and should step back periodically to reflect and find ways to improve.

IAN WHITE

Vice President, Corporate Development, Enpro, Inc. Charlotte, NC

PROUDEST 2023 PROFESSIONAL ACCOMPLISHMENT: Starting in 2019, Enpro embarked on an intentional portfolio transformation with the goal of becoming a leading industrial technology company. Since then, we have completed 13 divestitures and five acquisitions to reshape the company’s portfolio, resulting in a substantial increase in profitability. At the same time, we have positioned the company for future growth. In 2023, I am most proud of the announced acquisition of Advanced Micro Instruments. This acquisition adds test and measurement capabilities to our portfolio of products that safeguard critical environments in applications that touch our lives every day.

PROFESSIONAL GOAL FOR 2024: In 2024, I plan to continue positioning Enpro to be an acquirer of choice for high-quality businesses in the industrial technology space. Since I began leading Enpro’s corporate development function in 2021, we have designed our acquisition process to deliver the speed of private equity with the closing certainty of a strategic buyer.

I have had the privilege of witnessing Alex’s progression in corporate development over the past eight years. His professionalism, analytical capabilities and strong track record of creating enterprise value has made waves.

COLLEAGUE

ALEXANDER FRIES

Director, Corporate Development, Progress Software

Boston, MA

PROUDEST 2023 PROFESSIONAL ACCOMPLISHMENT:

I am proud to have played a leading role in our acquisition of MarkLogic. Over the last few years, Progress has been executing on a total growth strategy where most of our revenue growth is inorganic. This deal satisfies every aspect of our financial and strategic criteria, while being the largest, most complex acquisition in our history. Besides adding $100+ million in revenue, MarkLogic’s NoSQL database and semantic metadata management offering perfectly complement DataDirect, our cloud and on-premises data connectivity solution. MarkLogic brings outstanding net and gross retention rates, along with a loyal blue-chip customer base. Additionally, our team made great strides coaching the Progress talent bench on all things M&A, improving our sourcing efforts, diligence processes and integration practices.

PROFESSIONAL GOAL FOR 2024: In 2024, I look forward to capitalizing on the current M&A environment by continuing the execution of our total growth strategy. As we move away from the peak markets of 2021 and 2022 and valuations reset to a more normalized level, I am excited to play a leading role as we continue our financially disciplined approach to M&A. PE firms have a surplus of portfolio companies and need liquidity, while VC firms continue to triage their portfolios. Slower technology spending and the higher cost of capital have both contributed to a shrinking gap between buyer and seller valuation expectations. I expect M&A activity to pick up in 2024, and I’m thrilled that Progress will remain an active acquirer of choice.

KENNETH BOND

Head of Corporate Development, Cetera Financial Group

San Diego, CA

PROUDEST 2023 PROFESSIONAL ACCOMPLISHMENT: We were able to close the two largest deals in our company’s history with the carve out of Securian’s wealth management business and trust company, as well as the take-private transaction of Avantax.

PROFESSIONAL GOAL FOR 2024: We are focused on providing our affiliated advisors with compelling full and partial succession offerings. We’ll need to scale our diligence, contracting and integration processes for the corporate development team to accommodate 25+ deals per year.

Ken has been a valuable part of ACG’s corporate development community, including by helping to develop the corporate track at DealMAX as part of the event’s Strategic Acquirer committee.

COMMITTEE CHAIR

JOSHUA LAVORATO

Director, Corporate Development and Strategy, Rocket Software

Denver, CO

PROUDEST 2023

PROFESSIONAL ACCOMPLISHMENT: I co-led strategic reorganization efforts and facilitated the signing of two carve-out transactions (one closed, one pending in Q2 2024) for two separate organizations.

PROFESSIONAL GOAL FOR 2024: I’d like to help my current organization close one to two more deals in 2024 while laying the groundwork for 2025. In addition to deal execution and pipeline development, I plan to continue building out my organization’s strategy practice while mentoring junior members of the corporate development team.

*Editor’s

EMILY BLUE

Co-Founder, Managing Partner, Hue Partners* Kansas City, MO

PROUDEST 2023 PROFESSIONAL

ACCOMPLISHMENT: It was another exhilarating year for M&A in financial services! I am proudest of the deep relationships and personal connections that I developed throughout the year. This led to wonderful opportunities to speak about M&A in the press and serve as a thought leader in the industry I love. A real high point was being invited to speak on an M&A panel at an exclusive event for elite wealth management founders. Helping entrepreneurs navigate the journey of M&A is something that I am deeply passionate about. I am also proud to share that I became one of the youngest board chairs for Girl Scouts of NE Kansas and NW Missouri. This is such an honor for me, as our council is among the largest in the country. I’m excited to take the reins in navigating Girl Scouts toward their mission of being the leading organization for building girls’ confidence.

PROFESSIONAL GOAL FOR 2024: I live in awe of the amazing entrepreneurs I work with on a daily basis, and I have always dreamed of becoming a founder myself. 2024 is finally my year! Launching Hue Partners with my co-founder, Ryan Halls, has been the ultimate corporate development dream come true. Hue was specifically designed for founders, by founders, who appreciate the power of trusting relationships, because what makes the wealth management industry special is the deep and personal trust advisors build with their clients.

JAY WARNER

Vice President, Corporate Development, PDI Technologies Atlanta, GA

PROUDEST 2023 PROFESSIONAL

ACCOMPLISHMENT: One of our several acquisitions in the year included a carve-out of an ERP software business from a large payments company. Several variables complicated the deal’s execution, including a competitive sale process, aggressive timelines, intertwined commercial relationships, competing corporate priorities and an employee base that was sensitive to being acquired for the third time in three years. Our team at PDI stacked hands from top to bottom—chairman to analyst—to navigate all these dynamics, close the deal and successfully integrate the business into PDI, which the team can now consider its “forever home.”

Jay is a calming force, especially when crossing the finish line during deal close and announcement, with an ability to assess, articulate and achieve that is frankly unmatched.

COLLEAGUE

PROFESSIONAL GOAL FOR 2024: At PDI, we provide software to the convenience retail industry, which is rapidly evolving amid macro trends, including the energy transition, consolidation and consumer behavior. My goal for 2024 is to select the right PDI initiatives to help meet our customers’ needs as they navigate these trends, whether these initiatives relate to acquisitions, product improvements or internal operations.

note: Prior to launching Hue, Emily Blue served as head of corporate development at Caprock, leading the firm’s inorganic efforts.

MELANIE BUSST

Corporate Development, M&A, Harris Computer Waterloo, ON

PROUDEST 2023 PROFESSIONAL

ACCOMPLISHMENT: Seeing two acquisitions close, as well as having a few LOIs issued, right at the end of 2023 was the perfect way to close out a somewhat tough year. Harris likes to build ongoing relationships with software companies that we believe would be great additions to our existing portfolios. I focus most of my time looking for opportunities in the broadcast/communications/ telecom sectors, and my two acquisitions grew our telecom portfolio to six companies. I worked in the telecommunications industry for almost a decade, which has enabled me to have knowledgeable conversations with company owners. I leveraged my network to help connect me with some of the more elusive executives.

PROFESSIONAL GOAL FOR 2024: 2024 is all about keeping the momentum going. Q1 started with a couple of companies in the early stages of due diligence, which is a fantastic way to kick off the year. I would love to see five of my opportunities close. I have also been offered the chance to become a mentor to other team members at Harris, which is an exciting opportunity to help share best practices and experiences with others.

RYAN BRADBURY

Founder, Chairman and CEO, Rockit Pest Tampa, FL

PROUDEST 2023 PROFESSIONAL

ACCOMPLISHMENT: In 2023, we were able to really take Rockit to the next level. We made two platform buys in January and more great deals from there. We also welcomed and developed a worldclass executive team with the addition of highly qualified individuals in the CFO, COO and business development areas. We also continue to outpace our competitors with organic growth, and that is extremely valuable for us as we continue to acquire quality firms.

PROFESSIONAL GOAL FOR 2024: More of the same! But in doing so, we will aim to improve our margins and systems and add efficiencies to our current geographies. We’re building a culture internally with a staff that is here for the long run. It is a very exciting time at Rockit Pest.

Melanie has been leading the pack since she arrived approximately four years ago. Every day she is fostering relationships with business owners and decisionmakers to ensure that when a company considers the sale of their business, she is invited to participate in the process.

COLLEAGUE

Best Career ADVICE

ALEXANDER CURTI: My mantra in life and work is, “Work hard and don’t take yourself too seriously.” There is nothing that can improve an otherwise stressful situation like some good old-fashioned humor and humility. After all, if we’re working hard, why not have fun doing it?

EMILY BLUE: Go. See. Do. Take charge and be proactive in your life; don’t let life simply pass you by. Be willing to take chances but understand and manage the risks along the way.

EVAN SHUFFLEBARGER: “If you want to go fast, go alone. If you want to go far, go together.” This African proverb ties together several great pieces of advice I’ve been lucky enough to receive in my career.

JAY WARNER: “Go slow to go fast.” Prioritize the outcome, but first invest in the foundation.

MELANIE BUSST: Success in M&A is all about that perfect intersection of right person, right time and right business. It takes time and diligence to wait for those three factors to line up properly. Also, never promise what you can’t deliver.

RYAN BRADBURY: Be true to yourself and those you work with, and help find solutions that change the lives of your employees and customers for the better. Everything in business gets easier after you make things easier for those around you.

JOSHUA LAVORATO: Always strive to go beyond your assigned tasks and don’t be afraid to ask for anything as you can’t get to a yes or a no without the request.

KENNETH BOND: M&A is a team sport: Swallow your ego, know your weaknesses and hire people smarter than you.

ALEXANDER FRIES: Remain adaptable and prepared for unexpected challenges; deal dynamics and priorities can shift rapidly throughout the M&A process. Flexibility and a proactive approach are key to navigating complexities, problem solving and achieving successful outcomes. And remember: No deal is better than a bad deal.

IAN WHITE: The person who turns over the most rocks wins the game. This piece of advice originated in value investing, but it’s true for M&A as well.

The Wrap-Up

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ACG EVENTS

Summaries of recent live events and a look at what’s to come across ACG.

KEY TAKEAWAYS

Highlights from some of the biggest stories in this edition.

What an incredible experience chairing this year’s M&A South 2024 has been, where ACG Atlanta hosted over 1,200 attendees, who conducted nearly 5,000 one-onone meetings.

LAURA SHEN M&A South 2024 Chair

WRAP-UP ACG Events

ACG HOUSTON: WOMEN’S FORUM 10TH ANNIVERSARY CELEBRATION

The ACG Houston Women’s Forum celebrated its 10th anniversary on Nov. 7, marking a decade of empowerment, collaboration and growth for women in the middle market. The event was held at the Houston Country Club and drew 150 members from across the region.

The evening honored the trailblazing women who have championed the forum’s efforts over the past decade.

The event featured a keynote speech delivered by Christine Spray, a serial entrepreneur and nationally recognized business growth speaker. Spray, a best-selling author, consultant, trainer, executive coach and expert EOS Implementer, shared insights drawn from her extensive experience helping individuals and companies achieve growth.

Sponsors included Statesman Business Advisors, Texas Capital Bank, USI, Abip, Boyar Miller, BVA Group and Imperial.

2024 EAST COAST DEALMAKER INVITATIONAL

The annual exclusive ACG event was held Feb. 25-27 at the Streamsong Resort in Bowling Green, Florida.

Known for its picturesque landscape, Streamsong Resort provided an ideal backdrop for this limited, invitation-only golf outing, which caters to senior-level investment bankers and private equity investors in the middle market.

They were treated to a schedule packed with networking opportunities, including a welcome reception, breakfasts, dinners, pre-scheduled one-on-one meetings and golf.

The DealMaker Invitational events began in February 2022 as a way to bring middle-market professionals together for exclusive relationship-building experiences.

These golf events are held at different locations throughout the year. They include the East Coast DealMaker Invitational, the DealMAX DealMaker Invitational at Cascata Golf Club in April in Las Vegas and the West Coast DealMaker Invitational at Half Moon Bay in San Francisco in July.

2023 ACG TORONTO DEALSOURCE NORTH AT CAPITAL CONNECTION

The 7th Fall DealSource North Conference, in conjunction with the 21st Capital Connection Conference, was hosted on Nov. 14 at the Beanfield Centre in Toronto.

The conference is regarded as the key dealmaking event in Canada for investment banks and M&A advisory firms from Canada and the U.S.

The event drew a record number of companies and offered pre-scheduled meetings for private equity, capital providers and family office firms to explore potential partnerships.

In addition to the DealSource meetings, attendees had access to the Capital Connection conference, which ran concurrently and featured 45 speakers in 11 presentations. This allowed participants to benefit from the thought leadership at the Capital Connection conference and tap into business development opportunities at DealSource North.

2024 ACG ST. LOUIS DEALSOURCE

About 500 dealmakers attended the 2024 ACG St. Louis DealSource, held on Jan. 18-19 at the Ritz-Carlton in Clayton, Missouri.

On Thursday, Jan. 18, senior lenders, mezzanine capital providers, private equity groups, investment bankers and business owners spent the afternoon in one-on-one meetings.

Following the meetings, the Craft Beer and Spirits Tasting allowed attendees to sample local brews and spirits.

The event continued Friday, Jan. 19, where attendees enjoyed a panel discussion featuring industry leaders at the Private Equity Perspectives Breakfast moderated by Stifel’s David Lazar. Panelists included Jack Seneff from Thompson Street Capital Partners, Jessica Ginsberg from LFM Capital and Mark Jones of River Associates.

DealSource sponsors included Husch Blackwell, Wipfli, Plante Moran, Parkside Financial, Randall Partners and Altvia. The Craft Beer and Spirits Tasting was sponsored by RMS, WILsquare, Datasite, JPMorgan Chase, RubinBrown, Harbour Group, Nolan & Associates, Growth Operators, FORVIS, Thompson Street Capital Partners, Armanino, Enterprise Bank & Trust and Forsyth Advisors.

The 2023 Fall DealSource North edition established a new record with over 100 firms joining from all parts of Canada and the USA.

As we are seeing a surge in M&A and cross-border activity, quality networking matters and remains a top priority in 2024.

CATHERINE FISETTE

Managing Partner, NORCAP Global Partners and DealSource North Co-chair

2023 FLORIDA CAPITAL CONNECTION

More than 900 middle-market professionals and dealmakers attended the 18th Florida ACG Capital Connection at the JW Marriott Water Street in Tampa in November. The two-day event blended business with leisure, offering attendees networking opportunities, important discussions and fun activities in downtown Tampa.

The 2023 Florida Capital Connection began on Nov. 1 with a golf outing, followed by the rooftop reception for early arrivals. The main conference activities included the Capital Connection Wine Tasting and the ACG Florida Poker Tournament.

Beth Cahill of Windsor Capital, Emery Ellinger of Aberdeen Advisors and Reid Haney of Hill Ward Henderson served as chairs for the event.

2024 ROCKY MOUNTAIN CORPORATE GROWTH CONFERENCE

The annual event took place on Feb. 12-13 at the Hyatt Regency Denver at the Colorado Convention Center.

The event drew 700 attendees and aimed to foster fresh ideas and strategies for business growth.

The event featured a series of sessions and workshops, delivering content that enabled participants to navigate the complexities of the market and seize opportunities for growth.

After the conference ended, participants were invited to join in a day of skiing and other winter activities.

2024 M&A SOUTH

A networking event for corporate growth and middle-market dealmaking for the Southeast community took place Feb. 5-7 at the Hotel at Avalon & Conference Center in Alpharetta, Georgia. More than 1,200 professionals, including corporate development officers, accountants, lawyers, senior lenders and other dealmakers, attended the event.

The conference kicked off with a roundtable led by GF Data, an ACG-owned provider of middle-market deal valuations and terms. It was followed by a Corporate Development Roundtable and Sparkling Connections: ACG Women’s Networking event.

The next day featured the Emerging Leaders Breakfast at South City Kitchen with Eric Sardina, partner at Future Ready Leaders, who shared insights about building and maintaining professional networks, followed by a keynote presentation titled “The Business of Sports: How the South is Scoring BIG!” Georgia Oak Partners Managing Director Dale Murphy joined President of the Atlanta Sports Council Dan Corso and Playfly Sports President John Kristick in the keynote presentation, moderated by Susan Miller of Bank of America.

The final day of the conference included the TAG (Technology Association of Georgia) Corp Dev Society Breakfast and additional time for meetings and networking in the dealmakers’ lounge and exhibitor floor.

ACG NEW YORK YOUNG PROFESSIONALS DEALSOURCE AND MENTORSHIP MEETING

The sold-out event was hosted by the chapter’s ACG New York Forward Committee on Jan. 18 at AllianceBernstein’s offices in midtown Manhattan. The ACG New York Forward Committee was created for young professionals 35 years old and younger to help them with professional development.

As part of the quarterly ACG New York Forward series, the event brought together about 100 dealmakers for one-on-one multi-industry deal meetings and special mentor/mentee networking.

The event began with Streetwise Partners and SEO Alternative Investments student mentees in private mentorship discussions with young and senior ACG members.

The gathering included interactive discussions on career navigation with John Smith, chairman and CEO at Icon Parking, and Dr. Aamir Rehman, chair of Innate Capital Partners’ board of directors and senior fellow/adjunct faculty member at Columbia Business School. The young M&A professionals and mentee students were also presented with career consulting advice from Maureen Farmer, CEO and founder of Westgate Executive Branding.

The half-day event concluded with a special reception and networking.

Upcoming ACG Events

• MAY 14: 2024 ACG Mar yland Deal Forum –ACG Maryland

• MAY 29-31: M&A West –ACG San Francisco

• JUNE 5-7: 2024 Executive Women’s Symposium –ACG Pittsburgh

• JUNE 6: Dealfest Nor theast 2024 – ACG Boston

• JUNE 11: 2024 Corporate Growth Conference and Awards – ACG New Jersey

• JUNE 13: SaaS & Tech-Enabled DealSource –ACG Philadelphia

• JULY 28-30: West Coast DealMaker Invitational –ACG

• AUG. 22: 2024 Pirates Game – ACG Pittsburgh

• SEPT. 4-5: Great Lakes Capital Connection – ACG Cleveland

• OCT. 1-2: M&A Tech Connect – ACG Silicon Valley

• OCT. 29-30: 25th Annual Midwest Capital Connection – ACG Chicago

For a complete list of upcoming events, visit acg.org/events.

Key

TAKEAWAYS

CATCH UP QUICK: From burgeoning opportunities in sustainable fashion to successful origination strategies, here are some of the highlights from this edition of DealMaker.

DEALMAKING DIY

In a slower deal landscape, employee stock ownership plans (ESOPs) are becoming a way for sponsors to achieve exits. “In an environment where there are fewer natural buyers willing to pay premium valuations, sponsors have leveraged employee ownership structures to realize and lock in a return on their investment,” writes Tristan Tahmaseb, VP at investment bank ButcherJoseph & Co. This arrangement also alleviates headaches for management teams that aren’t interested in interacting with a new owner. “Winning M&A Strategies During Tough Market Conditions,” p. 14.

FASHION FORWARD

Investors in Europe, where there is a “perceived higher consciousness for the environment and sustainability,” are making moves on sustainable fashion investing. Collateral Good Ventures, a climate-focused venture capital firm based in Switzerland, recently launched its first fund dedicated to sustainability within the fashion supply chain. The firm focuses on companies that seek out materials that can be recycled, lab-grown or bio-based and identify points in the production process that can reduce water, energy and chemical use. “Coaxing Sustainable Fashion Investors This Side of the Atlantic,” p. 32.

BOSTON CALLING

Jay Jester, partner at Plexus Capital and this year’s ACG Legend Award winner, recalls the challenges of moving his young family (and pregnant wife) from Tampa to “the land of the frozen chosen” for a job with the newly launched Audax Group in Boston. Adverse weather patterns aside, it was a good move for Jester, who spent 20 years at Audax. While there, he led a team that sourced almost 25,000 transactions from 2,520 different firms. “The East Coast Connector,” p. 42.

STRENGTH IN NUMBERS

Private equity firms’ portfolio companies historically managed cybersecurity strategies on their own. Today, however, companies and sponsors are recognizing the benefits of developing a strategy across the portfolio. Attorneys at Troutman Pepper say this approach helps companies “leverage economies of scale and purchasing power to secure preferential pricing for scalable security solutions.” “Cybersecurity: The New PE Firm Team Sport,” p. 36.

THE DIGITAL FUNNEL

M&A partners don’t typically help private equity firms and strategics find deals, but in some cases, they can help with sorting and filtering. To that end, consulting firm Alvarez & Marsal created the Data Intelligence Gateway (DIG), a customized visual dashboard that enables M&A professionals to filter and sort through data gathered from public sources about company size, growth trajectory, ownership and other items. “We do a lot of custom or bespoke searches for add-on acquisitions,” Managing Director Paul Aversano says. “We are able to start with a population of, say, hundreds of thousands and put it through a funnel and say, ‘Here are 160 companies that generally meet your criteria.’” “Behind the Scenes,” p. 8.

$15.4B Commitments Issued to Date

260+

Inception to Date Transactions

135+

Deals as Lead/Co-Lead Arranger

WhiteHorse Capital provides senior and second lien debt for growth capital, acquisitions, buyouts, refinancings, and balance sheet recapitalizations for middle market companies in the U.S. and Europe. We bring decades of experience delivering creative financing solutions to sponsorled businesses, as well as directly to owneroperators, to help achieve their goals.

BENEFITS OF WORKING WITH WHITEHORSE CAPITAL

• Relationship Oriented Mindset

• Underwrite Complex Credits

• Speed and Certainty to Close

• Flexible and Creative Solutions

• Transparent Approval Process

• Broad Investment Capabilities