Sponsor Finance Group
First Merchants Bank Sponsor Finance is built to support private equity firms. Our focus is to eliminate your execution risk. As a cash flow lender, we enable private equity sponsor buyouts, acquisitions, refinancings and recapitalizations.
We believe the senior credit facility should be the easiest piece of the capital structure to assemble. Too often, that isn’t the case. Combining your diligence, our experienced team and a streamlined approval process allows us to respond quickly and provide certainty of close. Also, clear underwriting guidelines provide you clarity on what structure will work for your next opportunity.
Clients look to us when they need
A cash flow focused senior lender who can support them on acquisitions from coast to coast
Consistent capitalization, pricing and amortization in bull and bear markets alike
Timely and transparent communication of terms and expectations
Efficient and seamless transaction execution and reliable deal closing
- Greater than $3 million EBITDA
- Greater than $10 million revenue
- Industry agnostic
- Strong free cash flow
- Cash flow-based
- Five-year term/10-year amortization
- Hold up to $25 million commitment
- Syndicate up to $50 million commitment
- Stock pledge required
Our deal team has worked with private equity firms on new business, underwriting and portfolio management. The team also has significant private equity investment experience, spanning an array of products, industries and stages of business growth. Our professionals bring a thoughtful approach to due diligence and private equity references. Since 2014, First Merchants Sponsor Finance Group has led the financing of over 80 transactions with committed capital totaling in excess of $750 million.
We serve a wide breadth of clients, from family offices and small firms to large private equity firms. Below is a sample of our PE firm clients:
What types of institutions does FMB Sponsor Finance serve?
- The Sponsor Finance team supports a variety of investors, including funded private equity groups and fundless independent sponsors with a proven track record of investment experience. We prefer to work with investors with industry expertise and/or dedicated operating partners with meaningful sector experience. Additionally, we work with family offices or individuals on a more selective basis.
What are the typical characteristics of a Sponsor Finance company/borrower?
- We prefer to work with businesses with at least a three-to-five-year track record of strong and sustainable free cash flow generation featuring defendable market positions.
Do you serve any specific geographies through Sponsor Finance?
- We are focused on supporting private equity sponsors in the Midwest and Southeast. Our borrowers span the entire country; our only restriction is sponsors must be based in the U.S.
What is FMB’s target investment size on its Sponsor Finance deals?
- We typically hold up to $25MM. We partner with our Debt Capital Markets team to syndicate a transaction when the financing need exceeds our target hold size.
Are there specific sectors in which FMB Sponsor Finance prefers to invest?
- We are generalists in nature, and there are no specific industries outside of our scope. However, our experience is primarily in manufacturing and service industries as well as value-added distribution businesses. With the right partner and a proven, well-established platform, we are open to a dialogue on any opportunity.