decades of private equity experience with a creative approach to structuring deals has helped
us build an extremely valuable network of institutions and individuals. Our
Board of Advisors and past partnerships with management teams provide us
an invaluable resource of operating and management expertise to assist in
sourcing, evaluating and managing investments. In addition, we have established
relationships with a number of complementary financial institutions providing
us with the flexibility to provide creative financing solutions for each transaction.
An essential part of success in private equity investing is superior operations at the portfolio company level. Deal structuring is only part of the equation. We believe, regardless of market conditions, a company with solid, proven operations will always command a premium in the market. Over the long history of the firm, Saugatuck has developed strong relationships with management teams who have demonstrated an ability to implement and manage such operations. Our network of seasoned managers brings executives with experience in a wealth of industries. They have proven themselves in companies of different sizes facing a wide variety of challenges. We often work with these managers in identifying opportunities that meet our investment criteria.
These executives provide managerial knowledge and industry expertise that not only help with finding new portfolio companies, but provide an invaluable resource for ensuring the success of each investment. Saugatuck can tap this pool of talent to help with due diligence or to serve as board members. In addition, although Saugatuck invests in businesses that have outstanding management, at times it is necessary to strengthen the existing team. We can call on these executives to fill many managerial needs. Saugatuck has teamed up with these managers time and again in order to achieve the best possible performance from our portfolio companies.
Saugatuck executes many transactions that require capital in a number of different
forms. In addition to providing the equity capital necessary to complete an
acquisition, Saugatuck arranges the debt financing necessary to build the
appropriate capital structure. The longevity of our history and the time we
spend with lenders helping them understand our investments has helped us create
an invaluable network of all levels of debt providers. The backing by these
financial institutions ensures that the appropriate capital structure will
be put in place for the transactions we complete. In addition, it allows us
to approach potential investments with the confidence that we have all of
the necessary pieces to finance a transaction.
Senior debt plays an important role in the financing of buyouts. Saugatuck has strong relationships with a number of banks and non-bank senior lenders, which we call upon to provide the necessary leverage. Even in difficult markets when debt is not readily available, Saugatuck is able to make investments with the support of these financial institutions.
Another key piece of the capital structure is subordinated debt. There are many different providers of mezzanine financing. Many banks have a group that focuses on the junior part of the capital structure. In addition, there are many independent mezzanine funds as well as small SBICs that provide subordinated debt.
Saugatuck maintains close relationships with institutions that fall within all three of these categories. We are able to call upon all of these sources of capital when necessary, to successfully finance a transaction.
Private Equity Firms Saugatuck has enduring relationships with a large number of private equity firms. We are familiar with their investment criteria and can readily identify those that would have an interest in any specific transaction. Although Saugatuck generally is the lead investor, we look to bring in additional equity investors in certain situations. This helps give the portfolio company additional financial backing and increases flexibility going forward. With a partner, Saugatuck can more easily help portfolio companies with an add-on acquisition or provide additional growth equity if an attractive opportunity emerges.
We work with a number of private equity groups, not only to strengthen the financial position of a portfolio company and diversify our investment risk, but also to bring in experienced investors with new ideas that can benefit the portfolio company on an on-going basis. The varied experiences of the principals at different firms can add value in many situations. Saugatuck always tries to find the best people to help make an investment successful. These same investors also contact us if an opportunity to invest along side them arises.
Saugatuck has an independent Board of Advisors comprised of executives with
a broad range of backgrounds and experience encompassing both financial and
operating roles. The Board of Advisors is a key part of the Saugatuck network.
This group of individuals has extensive knowledge, which we draw on both while
analyzing potential new investments, as well as in our role as advisors to
our portfolio companies.
The best leads for deal flow comes from proprietary sources. The Board of Advisors has brought many worthwhile transactions to our attention. Because they are familiar with both our investment criteria and the partners, they are able to identify opportunities that Saugatuck would find very interesting. Due to the nature of the relationship a board member may have with the seller, often Saugatuck is the only investor brought in to assess a transaction.
In addition to providing Saugatuck with contacts for new transactions, the
Board of Advisors helps with current investments. The wide range of industry
and financial relationships of the executives that serve as board members,
comprise an important part of the Saugatuck network.