Typical Investment Parameters
The Peninsula Funds seek to invest in superior middle-market companies requiring capital for an acquisition, expansion or recapitalization. Successful investment candidates typically have the following characteristics:
- Minimum EBITDA of $3.0 million, a history of profitable operations and margins that meet or exceed industry averages;
- A financially motivated and experienced management team with a successful operating record;
- A sustainable competitive advantage in one or more of the following areas: market share, cost structure, distribution channels or product/service quality; and
- A clearly articulated vision for the company, including a realistic strategy and adequate resources to achieve its goals.
The Peninsula Funds employ a generalist investment approach, having invested in a wide range of industries, including among others manufacturing, aerospace, industrial and professional service, distribution, consumer products, retail, information technology, transportation, food processing and packaging companies. The Funds generally avoid investments in real estate, construction, emerging technology, natural resources and highly regulated and/or volatile industries. Financially or otherwise distressed companies are also unsuitable investment candidates for the Funds.
Junior capital investments are structured to balance the transaction’s funding needs, the target company’s capital servicing ability and the investment’s perceived risk-return profile. Typical junior investment terms and conditions for debt and equity tranches are as follows:
- Minimum of $5.0 million, although exceptions for investments promising future lending opportunities are considered.
- Maximum of $50 million, however, loans of even larger amounts are available in conjunction with our limited partners.
- Current interest rate typically of 10–14%.
- 5–7 year stated maturity.
- Investments generally structured with a single principal payment at maturity, or with amortization in the final 2–3 years of the loan.
- Security requirements generally include a second lien on the company’s assets and key-man life insurance on critical management team members.
- A deferred return component, usually in the form of an equity participation or deferred interest, to generate an all-in return on capital commensurate with the unique risks of the investment and the expectations for similar investments in the marketplace.
- Maximum of $30.0 million, however, larger amounts are available in conjunction with our limited partners.
- Current or PIK dividend rate of 6–10% on preferred equity. Common equity generally does not carry a dividend.
- Redemption right on preferred equity after 5–8 years via a put option. Common equity investments typically do not have mandatory redemption rights.
- Minority equity holder rights such as dilution protection, board observation/voting privileges and limited consultation and consent rights.
- Investments structured as non-controlling or controlling, depending on the unique requirements of the transaction.
It has been a pleasure to work with the people at Peninsula. During good times, they have been supportive of our growth. When our business faced challenging economic times, their trust in our management team, financial support and willingness to adjust our capital structure helped to navigate to a stable and healthy position.”Read More
When we sold our company to Peninsula, I had many questions, and some anxiety, about how we would be treated post-deal. Seven years later, all of those questions have been answered. It could not be a more fulfilling (and successful) partnership.”Read More
Executive Chairman, MMGY Global, LLC
I strongly recommend that you consider Peninsula Capital as your business partner.Read More
President, Power Vac, LLC
Over the past seven years, Peninsula Capital Partners has been instrumental in supporting the Burlington Team’s transition from a small unsophisticated company to a global leader in the radiation protection industry.…”Read More
Lee Ann Fachko
CEO, Burlington Medical, LLC
Partnering with Peninsula has been one of the best decisions we have made thus far as an independent sponsor. The team is highly disciplined, applies strong analytics and consistently displays a high level of integrity….”Read More
Managing Partner, Pillsman Partners, LLC
To find a partner that shared our passion was a prerequisite that we thought we’d struggle to find, but from the get go Peninsula showed a real understanding and empathy for our business and the people within it. We’re over a year in and we’re delighted with our decision and remain firmly on track to achieve our ambitious long-term goals.”Read More
… James Illikman and Peninsula took a different approach and looked at the longer-term opportunity and invested the time and resources into making the business stronger.”Read More
President & CEO, Wild Wing Hospitality Inc.
In my experience, strategic alignment of stakeholders is the most critical element of success for a private equity-backed business. The Peninsula team does a fantastic job of communicating with management to ensure such alignment.…”Read More
…Our client had an instant connection with the Peninsula team, which carried all the way through negotiations, due diligence and the inevitable complexities that emerge in any transaction.…”Read More
Managing Principal, True North Strategic Advisors LLC
From the very beginning, we have had a very collaborative and enjoyable partnership with Peninsula. We built camaraderie through challenges that could stress relationships. ”Read More
Managing Partner, A111 Capital
Peninsula has been an invaluable partner for Weave. Of the various capital partners we considered, Peninsula treated us like a true partner throughout the process, engaging in honest and transparent dialog.…”Read More
Partner, Weave Growth
Chris Gessner and Peninsula have been our go-to capital partner for years now. Their ability and desire to work through difficult and challenging deal issues sets them apart from other capital partners.Read More