Good morning, dealmakers. MK Flynn here with today’s Wire.
Nearshoring. We used to say, “Think global, buy local.” Well, these days, maybe it should be, “Think global, supply local.”
For many years, the big trend in the supply chain was to go global. But over the last two years, serious weaknesses in the strategy have been revealed. Now the pendulum is swinging the other way, and the supply chain is becoming more regional. Private equity firms are seizing the opportunities to invest in companies that aim to minimize supply chain disruptions, nearshore parts and services and leverage technology to create more efficient and cost-effective approaches. To learn more about PE supply chain strategies, PE Hub reporter Obey Martin Manayiti spoke with several investors and consultants.
For more insights, read Obey’s article.
Air cargo. Rising demand for air freight in e-commerce, healthcare and manufacturing prompted AE Industrial Partners portfolio company Alpine Air Express to acquire Suburban Air Freight in a deal announced on Monday. It marked Alpine’s second acquisition since AEI came on board in 2019. To discover more about AEI’s growth strategy for Alpine, Obey caught up with Jon Nemo, a senior partner at AEI and a former investment banker who specialized in aerospace, defense and government services.
Read the full story here.
Private debt. Randy Schwimmer, co-head of senior lending at Churchill Asset Management and founder and publisher of The Lead Left, shared with me the results ofThe Lead Left Private Debt Survey 2022, conducted March 31 and April 5.
How is increased investor interest in private debt affecting private equity-backed deals?
“Mega-unitranches provided by leading private debt managers will continue to take share from the broadly syndicated loan market and the upper mid-market,” Schwimmer said. “But even with the strong deal flow we’ve seen this year, there’s been an excellent supply/demand dynamic. Deal terms remain well-balanced between being issuer- and investor-friendly. It will also be the case that healthy purchase price multiples will translate to conservative loan-to-value percentages for lenders, in the 40 percent to 50 percent range. So even while headline debt-to-EBITDA leverage can sometimes look high, what you don’t see is the significant equity cushion that’s helping debt providers on the downside.”
Read my interview with Schwimmer here.
BigLaw. DLA Piper is adding 27 attorneys to its private equity practice based in Chicago, the firm announced earlier this morning.
Among them are partners Harris Eisenberg, Alex Plakas, Nathan Wilda and Drew Rosenberry, all of whom hale from Hongiman. Indeed, Crain’s Chicago Business is reporting that all 27 lawyers joining DLA previously worked at Honigman. DLA would not comment on the attorneys’ prior firm, and I haven’t heard back from my email to Hongiman requesting comment.
It’s not the biggest recent law firm coup. Paul Hastings recently snatched a team of 43 restructuring attorneys from Stroock & Stroock & Lavan.
That’s all for now. I’ll see you back here tomorrow. “Same bat time. Same bat channel.”
Cheers,
MK
Read the full wire commentary on PE Hub ...
