Last Week's Wildest Deals: Enviri $625 million, Shift4 payments $450 million, Swift Current Energy $300 million

Good Morning Everyone

This week in Deals:

$2 billion in top Growth Capital deals

Top Growth Capital Lenders
Goldman Sachs, First Citizens Bank, Valley National Bank, Encina, Waterfall Asset Management, International Finance Corporation, East West Bank, Citigroup, and Trinity Capital

💸Top Weekly Growth Capital Deals

• Enviri Corporation completes a $625 million refinancing of its revolving credit facility Read

• Shift4 announces the closing of a new $450 million revolving credit facility Read

• Finally raises a $200M Series B and secures a $150 million credit facility Read

• First Citizens Bank serves as co-lead arranger on a $300 million credit facility for Swift Current Energy Read

• Valley Bank’s New Jersey Commercial Banking Team closes a $150 million syndicated credit facility to Green Thumb Industries Read

• Drip Capital secures $113 million in new funding to accelerate growth Read

• Agora Data adds a $100 million line of credit with a NY investment firm Read

• Buyerlink secures a $41 million debt facility with Citigroup Read

• Ares Commercial Finance provides a $30 million credit facility to InterDesign Read

• Trinity Capital provides $30 million in growth capital to Slingshot Aerospace Read

Summary

The growth capital markets have seen a flurry of activity recently, with companies across various sectors securing substantial financing to fuel expansion and refinance existing debt. Notable transactions include First Citizens Bank's $300 million senior secured credit facility for Swift Current Energy, which demonstrated strong support for renewable energy projects and highlighted the sector's attractiveness to lenders; Enviri Corporation's $625 million extended revolving credit facility maturing in 2029, features a stepped-down total net leverage ratio covenant, reflecting lenders' confidence in the company's deleveraging trajectory; and Green Thumb Industries' $150 million five-year senior secured term loan facility arranged by Valley National Bank closing at a 13.5% annual interest rate with a 2029 maturity, signifies growing mainstream financial support for the cannabis industry, albeit at higher rates due to regulatory complexities.

Winners

• Environmental services companies are well-positioned in the current market. They can capitalize on this trend by emphasizing their ESG credentials and presenting clear plans for improving their financial metrics over time.

• While cannabis companies still face higher borrowing costs, they are seeing increased access to traditional banking services. Other cannabis businesses can capitalize on this shift by building relationships with regional banks and emphasizing their regulatory compliance and financial stability to overcome lingering hesitations in the banking sector.

• Commercial banks with strong renewable energy and environmental services practices are clearly benefiting from the current market dynamics. Other lenders can capitalize on this trend by developing specialized teams focused on high-growth sectors and building relationships with key players in these industries.

• Syndication desks at major banks are also well-positioned in this market. Banks with strong syndication capabilities can maximize this opportunity by structuring innovative deals that balance borrower flexibility with investor demand.

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Losers

• Traditional energy companies may find it harder to secure financing as capital shifts toward renewables. They can mitigate this by pivoting towards green initiatives or partnerships in the renewable space.

• Traditional ad agencies may face challenges obtaining capital unless they pivot towards data-driven solutions.

• Lenders that focus heavily on oil and gas will need to diversify or pivot toward sustainable energy financing since significant investments are moving into renewable energy.

• Small community banks without specialized industry knowledge may struggle to compete for the large deals dominating the market. To address this, community banks could explore partnerships with larger institutions or fintech companies to enhance their product offerings and risk assessment capabilities.

Tips For Borrowers

1. Leverage industry tailwinds: Swift Current Energy's success in securing funding underscores the importance of aligning with sectors experiencing strong growth and investor interest.

2. Demonstrate a clear deleveraging path: Enviri's favorable covenant terms highlight the value lenders place on a well-defined strategy to improve financial health over time.

3. Explore flexible structures: Drip Capital's $113 million mixed equity and debt funding illustrates the benefits of combining different financing types to optimize terms and minimize dilution.

4. Prepare for higher rates in emerging sectors: While Green Thumb secured significant funding, the 13.5% interest rate reflects the premium still attached to cannabis industry loans.

5. Prioritize relationship building: First Citizens Bank's ongoing support for Swift Current Energy emphasizes cultivating strong banking relationships for future financing needs.

 💡Private Equity Opportunities

Okay, folks, we are putting on our safari hats and hunting for some big game today. Now, what kind of deals would a PE firm be looking for?

1) I'd target companies in the supply chain for renewable energy projects. I'm considering manufacturers of specialized wind turbines or solar panel components. A company like Heliene, which produces solar modules, could be ripe for investment and expansion.

2) I'm also intrigued by the potential in cannabis-adjacent industries. I'd look at ancillary businesses that don't touch the plant directly - think of specialized HVAC systems for growing operations or eco-friendly dispensary packaging solutions. A company like Growgen, which provides hydroponics equipment, could be an interesting play.

3) The Enviri deal shows an appetite for environmental services beyond renewable energy. I'd be scouting for innovative waste management or water treatment companies. These aren't as flashy as solar farms but essential for a sustainable future. A firm like Ostara, which recovers nutrients from wastewater to create fertilizer, could be a diamond in the rough.

4) I see an opportunity for fintech solutions in these emerging industries. I'd look at companies developing blockchain solutions for renewable energy trading or AI-powered risk assessment tools for cannabis business loans. A startup like Leaf Trade, which provides a B2B platform for cannabis companies, could be poised for significant growth.

Financing & Referral Opportunities for Brokers & Lenders:
1) Cities: Boston, Chicago, Detroit, Columbus, Ohio, or Pittsburgh
2) KPI metrics: EBITDA growth rate of 10-15% annually, total net leverage ratios around 5x, a robust pipeline that can support growth for at least the next 3-5 years, carbon footprint reduction plans or renewable energy capacity growth rates (ESG), and avoid companies where a single customer accounts for more than 20-25% of revenue
3) Prospects: logistics firms that specialize in oversized loads or heavy-duty transportation—especially those with green credentials themselves, specialty legal firms that focus on cannabis or heavily regulated industries, companies offering recruitment technologies that use AI to match skills with company needs more efficiently, and cybersecurity firms that can offer cutting-edge solutions to fintech companies.

Happy hunting!

😲Didn’t see that one coming

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