Creating the optimal capital structure used to be simple – there was equity and there was senior debt and any gap in between was filled with mezzanine. Not anymore. A proliferation of financing alternatives has turned assembling the optimal capital structure into a complex blend of art and science. As a result, transactions have become more complicated and obtaining the optimal capital structure more difficult than ever before.
Penfund simplifies this challenge by providing integrated financing solutions spanning all layers of the capital structure.
Penfund’s integrated approach has numerous advantages for entrepreneurs, business vendors and equity sponsors:
Simpler, faster transactions
A transaction with Penfund reduces the need to deal with multiple financing providers. As a result, there are fewer conditions, simpler inter-creditor negotiations and more streamlined due diligence. The result is a faster closing with less closing risk.
Risk adjusted pricing
Penfund isn’t limited by an ability to invest in just one layer of the capital structure. As a result, Penfund’s financings can automatically adjust the cost of capital to a company’s financial position. Companies aren’t locked into fixed cost financings which they will eventually outgrow. Instead, the terms of Penfund’s financing evolve and change with the company.
Lower cost of capital
By blending multiple layers of debt and equity into one integrated proposal, Penfund can provide a lower overall cost of capital than more narrowly focused financing providers.
Customized solutions
Penfund operates without being restricted by market conventions or norms. Regardless of how unique, uncertain or complex a financing requirement may be, Penfund has the flexibility to create a financing proposal to meet the need.
Penfund's capital solutions are used to finance:
- Organic growth including new production facilities and geographic expansion
- Acquisitions
- Recapitalizations
- Liquidity events for business owners seeking to diversify their net worth
- MBOs and LBOs
- Shareholder reorganizations
Penfund invests in established private and public businesses with clearly focused strategies and a history of cash flow stability. Typically, these businesses share the following characteristics:
- Revenue between $25 million and $500 million per annum
- Cash flow greater than $2 million per annum
- Proven, in-place management teams
- Entrenched market positions
- Stable operating environments
- Superior returns on capital
