Serving Independent Sponsors For Over 26 Years

Independent Sponsors—transaction sponsors who do not manage a committed pool of capital—have become a significant force in the middle-market transaction market, and are responsible for originating an increasing percentage of all deals in this important market segment. Peninsula Capital Partners was one of the first private equity firms to support the efforts of Independent Sponsors, closing its first independently sponsored transaction in 1996. These deals comprise over half of the more than 140 platform investments Peninsula has closed since its inception. Our early and ongoing commitment to supporting Independent Sponsor transactions sets us apart from other private equity firms who have only recently begun considering participating in Independent Sponsor transactions. Peninsula Capital’s extensive track record of closed Independent Sponsor transactions provides us rare and invaluable understandings of the unique variables, sensitivities and priorities that go into successfully structuring, documenting and closing these highly specialized transactions.

Please visit the Peninsula Capital Partners homepage for more information on how we can help with your Independent Sponsor transaction.

CHOOSING THE RIGHT financial partner is THE LYNCHPIN TO A successful independent sponsor TRANSACTION

The most critical juncture in any independent-sponsor transaction is selecting your financial partner. Peninsula Capital Partners understands how vital picking the right capital provider is to successfully closing a transaction, managing the investment post-closing and creating an exit that maximizes value. Based on our over 26-year history of supporting and participating in Independent Sponsor transactions, we know well the key considerations that Independent Sponsors must weigh when selecting a financial partner for their transaction. Choosing the wrong financial partner can jeopardize closing the deal or result in conflicts during the hold period that erode value and create irrecoverable opportunity costs. Therefore, we encourage independent sponsors to ask potential capital providers five “must know” questions before selecting a financial partner for their next deal.

Five “Must Know” questions to ask before picking your financial partner

What is the capital provider's experience with Independent Sponsor transactions?

Every Independent Sponsor is different, bringing unique abilities and requirements to their transaction. Similarly, every Independent Sponsor transaction is different, ranging from conventional controlling-interest acquisitions to a wide spectrum of minority investments. Accordingly, the right financial partner must invest the time to develop a thorough understanding of each transaction participant’s goals and objectives to formulate a customized capital structure solution that best allows for a successful outcome for all interested parties. A capital provider’s willingness and ability to perform these necessary steps is essential for a successful Independent Sponsor transaction. Conventional acquisition structures, like those typically employed by buyout funds, often do not work with Independent Sponsor deals due to the unique objectives of the Independent Sponsor and/or seller. Over the course of dozens of closed independent sponsor transactions, Peninsula Capital Partners has developed an appreciation for, and an expertise in, performing these key steps to best ensure a successful outcome for our Independent Sponsor partners.

What are the capital provider's management involvement objectives post-closing?

Each Independent Sponsor has a level of intended management involvement in their target company post-closing, which can range from board-level oversight and strategic planning, to day-to-day operational management. As a result, it is imperative that the capital provider and transaction structure are compatible with the planned post-closing role of the Independent Sponsor. For example, if the financial partner is a private equity group that is accustomed to taking full management control of its portfolio companies, this may conflict with an Independent Sponsor’s desire to have a meaningful management role. Conversely, if the Independent Sponsor desires only a board role, the capital provider must be comfortable with that more limited involvement level. Peninsula Capital Partners has worked with Independent Sponsors in a wide variety of operating roles, based on the objectives of the Independent Sponsor and the management needs of the target company. We are open to any level of operating involvement by the Independent Sponsor and will help to define their role in the company. This should occur early in the evaluation process, versus deferring such key discussions until late in the due diligence process, or worse, until after the transaction has closed.

What are the capital provider's equity ownership requirements; do they need majority control or are they prevented from taking majority control?

An Independent Sponsor must be aware of the equity ownership requirements of their capital provider. Many financial investors require majority ownership while some cannot be majority equity holders, still others need super-voting rights and/or liquidation preferences versus other equity holders. These may, or may not, be compatible with an Independent Sponsor’s goals for the transaction. Moreover, transactions are fluid and deal structures often change from the LOI stage to the final closing. If an unexpected, late-stage, structural change must be made to a transaction – such as the capital provider needing to go from a minority position to controlling position – how flexible can the capital provider be? Most capital providers claim to be flexible, but simply cannot participate in certain transaction structures. Many private equity firms can only do control investments while others can only make minority investments. If an unexpected structural change creates an unacceptable situation for your chosen capital provider, your transaction may be put at risk as a new financial partner must be sourced. Peninsula Capital Partners is a truly flexible investor that works to identify the best custom capital solution for your transaction. We are equally comfortable as a control or non-control investor and have closed many transactions in each role. In addition, we have even switched roles from control to non-control investor, or vice versa, after partnering with an Independent Sponsor on a deal as circumstances change, something many private equity firms simply cannot do. So, while the term flexible is thrown around a lot by capital providers, how truly flexible a capital provider can be when it really matters is a question all Independent Sponsors must ask before selecting their financing partner.

What flexibility does the capital provider have around structuring its investment?

Many different terms are heard in the transaction market referring to junior capital, such as “mezzanine debt,” “subordinated debt,” “convertible debt,” “unitranche debt,” “flexible equity,” “second-lien debt,” etc. Each term has own unique meaning, but in general, they all refer to certain approaches to structuring junior capital components. Investors who specialize in one of these capital components are product focused in their structural preferences, and are thus limited in what they are willing, or able, to do to close a transaction. For example, a “flexible equity” investor who can only take minority equity positions is hardly flexible. Peninsula Capital Partners is a truly flexible investor as we are able to invest both debt and equity in a transaction, either as a control or non-control investor, in order to provide the best possible customized structure for a transaction. We call our approach “structured equity;” simply meaning we will structure a junior capital solution that meets the unique needs, goals and objectives of the Independent Sponsor and target company.

What are the documentation requirements of the capital provider; do they need extraordinary rights?

There is an old saying, “The Devil’s in the details.” This very much applies to investment documentation. Even if the economics of a piece of capital are acceptable, the non-economic terms in the investment documentation can render it unacceptable. The philosophy of an investor is very evident in the documentation approach they bring to a transaction. As investment documentation is generally not started until near the end of a transaction, when the Independent Sponsor is likely not in a position to replace his chosen capital provider, there is an opportunity for a capital provider to seek terms and conditions that were not articulated up front. Therefore, an Independent Sponsor needs to know before selecting a financial partner whether or not the capital provider will be reasonable and fair during the investment documentation process. Peninsula Capital Partners seeks to convey at the earliest stages of the transaction process the key terms and conditions it requires to close an investment to avoid any misunderstandings.

Please visit the Peninsula Capital Partners homepage for more information on how we can help with your Independent Sponsor transaction.

About Peninsula Capital Partners


of committed capital


closed transactions


years in business


professional experts


chance to get it right!

Peninsula Capital Partners is a well-established investment company specializing in providing subordinated debt, preferred stock and/or common stock, either as a minority or control investor, to superior middle-market companies to support ownership transfers, recapitalizations, special dividends and other leveraged transactions. We often look to partner with capable Independent Sponsors to jointly underwrite and close investments. We have raised seven investment partnerships totaling approximately $1.9 billion of committed capital, from which we have made over 140 platform investments plus many more add-on investments into existing platforms. We have invested in a broad range of industries, including among others manufacturing, distribution, information technology, industrial and professional services, consumer products, retail and food processing.

Our professional team is multidisciplinary with backgrounds in accounting, consulting, banking, operations management as well as private equity. Our broad experience allows us to perform much of our investment due diligence in-house and to “roll up our sleeves” and assist our Independent Sponsor transaction partners close their deals expeditiously. Our investment professionals look to build productive and cooperative relationships with our Independent Sponsor partners to jointly create mutually successful investment outcomes. This philosophy has led to enduring relationships with many Independent Sponsors, as evidenced by Peninsula Capital having closed multiple transactions with some sponsor groups.

For your reference, a brief summary of the sorts of investments and investment structures Peninsula Capital most frequently pursues may be downloaded by clicking the adjacent image. Also, if you would like more in-depth information about Peninsula Capital Partners, please visit our homepage at


Peninsula Capital is constantly seeking to expand its network of capable Independent Sponsor partners. We invite any sponsor group to contact us to learn more about our capabilities and preferences, and to allow us to better understand your group’s transaction goals and objectives. We encourage sponsors to contact us at their earliest opportunity regarding a potential transaction to allow us to provide insight into capitalization issues and other transaction terms. Even if you choose not to pursue financing from Peninsula Capital, we are pleased to share our views on key elements of your targeted transaction. Finally, please feel welcome to contact us even if you do not have a currently active transaction so that we may establish a relationship in order to more expeditiously and effectively respond to you when you do have a live transaction.

Below is a gallery of our investment origination professionals. Please feel welcome to contact any of them to discuss a potential transaction or just to make an introduction. We respond promptly to all inquiries and look forward to establishing new relationships.

To see how Peninsula Capital Partners can help with your Independent Sponsor deal,
contact any of our transaction experts.


President &
Chief Investment Officer

contact Scott



contact Karl



contact Steve



contact James



contact Ty



contact Chris



contact Andy



contact Liz


vice President

contact Andrew


We have learned a thing or two over the last 26+ years and 140+ platform investments, especially about the very unique issues and objectives that typically accompany Independent Sponsor deals. Many of these issues are not obvious but can determine the success of both closing an investment and the outcome of the investment post-closing. Drawing on this experience, we have written a brief guide titled, “Eight Steps for a Successful Independent Sponsor Transaction”. Please click the adjacent image to download this Independent Sponsor transaction primer. We hope you find this article useful and indicative of our deep experience in the highly specialized Independent Sponsor transaction market. Please allow us to share our expertise with you on your next transaction.