Holy Smokes! Hartree & Sprague $4.1 billion, Smartsheet $3.2 billion, Tempur Sealy $1.6 billion

Good Morning Everyone

This week in Deals:

$10.92 billion in top Growth Capital deals

Top Growth Capital Lenders
MUFG Bank, Société Générale, Wells Fargo, Coöperatieve Rabobank, ING Capital, Blue Owl Capital, HPS Investment Partners, Farallon Capital Management, Elliott Capital Management, Carlyle Group, Brinley Partners, GoldenTree Asset Management, Golub Capital, Monroe Capital, New Mountain Capital, Ontario Teachers' Pension Plan Board, Benefit Street Partners, Alliance Bernstein, Hercules Capital, Cliffwater, Canyon Capital Advisors, Jefferies Credit Partners, Macquarie Group, Brigade Capital Management, Blackstone, Vista, Deutsche Bank, Goldman Sachs, BNP Paribas, Jefferies (mezzanine lender), GoldenTree Asset Management, WhiteHawk Capital Partners, Siena Lending Group, and Huntington Business Credit.

💸Top Weekly Growth Capital Deals

• MUFG Bank secures a $4.1B revolving credit facility for Hartree Partners Read

• Blue Owl Capital leads a $3.2B private debt deal for Smartsheet buyout Read

• Wells Fargo launches a $1.6B loan for Tempur Sealy deal Read

• Castlelake secures a $1B long-term aviation financing facility and acquires over 60 aircraft assets Read

• Oportun closes a $306M committed warehouse facility extension with Goldman Sachs and Jefferies Read

• Butterfly announces a $300M dividend recapitalization of Milk Specialties Global Read

• Life Time upsizes revolver and extension by $175M Read

• WhiteHawk Capital Partners provides a $111M first lien credit facility to West Side Transport Read

• Crown Partners serves as exclusive financial advisor on a $75M senior debt recapitalization from Siena Lending Group Read

• Huntington Business Credit closes a $50M credit facility with Elements International Group Read

Summary

As I survey the current lending landscape, I'm struck by the sea of liquidity and the fierce competition among lenders, especially in hot sectors like health tech and commodities. It's a borrower's market, folks, and those companies that play their cards right - aligning their financing structures with long-term goals and leveraging clever loan features like performance-linked rate reductions - are reaping the rewards. Take Life Time Group Holdings, for instance. They've just pulled off a masterstroke, refinancing their revolver to the tune of $650 million while shaving 100 basis points off their rate. And they've got the potential for further cuts if they hit their marks. Now, that's what I call smart financial engineering.

But Life Time isn't the only one making waves. Owlet, the baby tech darling, has secured a neat little $15 million revolver that's set to grow to $20 million in a year. It's like watching a tech-savvy infant take its first steps towards financial flexibility. And let's not forget Hartree Partners' eye-popping $4.1 billion facility. The fact that it was oversubscribed tells me there's still plenty of appetite for asset-based loans in the commodities space. Hartree's deal, split between two-year and three-year tranches with an accordion feature, showcases remarkable flexibility in meeting liquidity needs. And let's not overlook the Smartsheet financing led by Blue Owl Capital – a testament to private credit's growing muscle in the buyout arena. It's clear that lenders are becoming increasingly sophisticated in safeguarding their interests while still meeting borrowers' complex needs.

Winners

• Commodity trading firms are benefiting from the current market conditions. They can leverage this financing to secure larger contracts or enter new markets, enhancing their competitive position.

• Aviation asset owners and operators are well-positioned in the current market. They might consider sale-leaseback arrangements or financing to upgrade their fleets, improving operational efficiency and competitiveness.

• Private credit funds are thriving in the current market. Other lenders in this space can capitalize by developing sector-specific expertise and creating innovative structures that balance borrower flexibility with lender protections.

• Large syndicated lenders are finding opportunities in the commodities and energy sectors. Other lenders can maximize opportunities by building their syndication capabilities and developing relationships with co-lenders to participate in these large deals.

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Losers

• Startups in the early stages, particularly those without significant revenue or assets, might face challenges in the current market. These startups could mitigate this by building strategic partnerships, exploring venture debt options, or considering accelerator programs that provide access to financing.

• Retail businesses, especially those without a strong e-commerce presence, may find it difficult to secure financing in the current environment. These businesses could mitigate the impact by diversifying their sales channels, strengthening their online presence, and exploring inventory-based financing options.

• Traditional banks focusing on conventional corporate lending may lose market share to more specialized or flexible lenders. To mitigate this, banks could consider partnering with private credit funds or developing their own specialized lending arms to stay competitive.

• Lenders focused on short-term, asset-based lending might find the market shifting towards longer-term facilities. To adapt, these lenders could consider extending their product offerings to include longer-term options or focus on sectors where short-term, flexible financing is still in high demand.

Tips For Borrowers

1. Demonstrating robust financial health can help negotiate better terms, such as lower interest rates and increased credit limits

2. Structuring loans with features like maturity extensions and scalability options can provide the flexibility needed to support expansion plans

3. Engaging multiple lenders can enhance borrowing capacity and create competitive tension among lenders, leading to more favorable terms

4. Observing market conditions to identify periods of high liquidity can result in securing financing at competitive rates, similar to favorable terms

5. Stay attuned to market innovations, such as the inclusion of liability management protections, which can affect deal structures and negotiations

 💡Family Office Firms Deal Opportunities

This Week In FO Deals

1) The health and wellness sector presents a significant opportunity. Companies offering integrated health solutions are thriving in this evolving market. Companies (like Mindbody) that provide business management software for wellness businesses are a prime example. Acquiring those companies could give you entry into the wellness market and related sectors like wearable tech. With growth cap financing, you could accelerate their growth, integrate advanced technology, and strengthen your portfolio.

2) Sustainability is the key to success in the manufacturing green revolution. Eco-friendly companies (like CarbonCure Technologies) are reducing their environmental impact while attracting customers and favorable financing. Acquiring such firms puts your portfolio at the forefront of green manufacturing, influencing related industries. With smart growth capital, you could boost their operations, advance eco-tech, and strengthen your portfolio's foundation.

3) In the evolving digital health landscape, we're seeing a transformation in healthcare delivery. These innovations enhance care and streamline processes, offering substantial returns and societal benefits. Acquiring key players (like Health Catalyst) could give your portfolio a tech edge and create synergies with existing healthcare investments. With growth capital, you could accelerate development, expand reach, and foster partnerships.

Financing & Referral Opportunities for Brokers & Lenders:
1) Cities: New York City, Chicago, Seattle, and Minneapolis
2) KPI metrics: EBITDA margins north of 15%, 4.5x debt-to-EBITDA ratio, and 20% YOY revenue growth rates. For SaaS companies, the customer retention rate is 90%, ROA is above 5%, and a company's cash conversion cycle is 30 days.
3) Prospects: Companies that manufacture high-end fitness equipment or develop fitness apps; startups developing smart baby monitors, feeding trackers, or other tech-enabled baby products; specialty construction material suppliers, particularly those focused on eco-friendly or innovative materials; companies developing next-gen syringes, diagnostic devices, or wearable health monitors, and medical-grade plastic manufacturers or biotech firms working on drug delivery systems.

Happy hunting!

New Loan Programs

• Citi and Apollo launch a $25B private credit and direct lending program Read

• Lopay and YouLend partner to provide over £1M in financing for UK SMEs Read

• Multitude Bank and Salt Edge join forces to optimize loan repayment for European SMEs Read

😲Didn’t see that one coming

• US Department of Justice files civil antitrust lawsuit against Visa Read

• Vertex Energy enters Chapter 11 Read

• Pure Prairie begins Chapter 11 bankruptcy Read

• Wrena files for Chapter 11 bankruptcy to pursue sale Read

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