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Apr 8, 2021
 in 
Economics

Pricoa Private Capital’s bespoke financing approach: more than a match for Unitranche

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As a long-term, relationship-focused financing partner, Pricoa Private Capital provides capital across the private credit spectrum, with two distinct strategies targeting lower and middle‐market companies: Direct Lending and Junior Capital. ​

These complementary strategies offer significant hold sizes, speed and early certainty of execution, and flexibility beyond the bank market. With a true generalist approach, significant cross-border financing experience, and local market knowledge we appreciate that one size cannot, and will not, fit all. ​

When HH Global Limited was looking for capital to finance a minority recapitalization, we provided subordinated debt financing as well as senior debt and an acquisition facility. HH Global was able to achieve its liquidity goal, while allowing the current leadership group to increase their ownership stake and position the capital structure to continue capitalizing on organic and inorganic growth opportunities.

Our approach of blending capital to tailor the ideal financing solution helps companies get the capital they need rather than accepting the market standard. Underpinned by an appetite for complex transactions, a global platform and partner agnosticism, we believe this provides a truly competitive advantage relative to alternative types of private credit instruments.

Independent Builders Merchant Group (f.k.a Parker Building Supplies), a growing independent builders’ merchant, was acquired by Cairngorm Capital in March 2018. Cairngorm aimed to expand IBMG through a combination of organic growth and M&A.  In July 2019, we underwrote a RCF, senior debt, subordinated debt capital, with an accordion to fund bolt-on acquisitions of two highly similar businesses.  In October 2019, we funded follow-on debt capital for the acquisition of Chandlers Building Supplies, a builders’ merchant with a complementary geographic footprint. Cairngorm chose us as the financing partner due to our relationship approach, industry understanding, and our follow-on funding appetite.

Flexibility & Scale

  • Providing the full product suite, including RCFs
  • Allowing companies to blend their capital providers to meet their exact needs
  • Allowing borrowers to prepay, refinance or add to the first lien senior financing without altering the structure of the Junior Capital financing

Patient Capital

  • Contractual obligation to standstill without cash debt service
  • A default on the senior does not trigger a default through the entire capital structure
  • Covenants and enforcement rights are likely to be more flexible than first lien or Unitranche financings

For more information regarding Pricoa Private Capital’s junior capital and direct lending capabilities, please contact:​

Donald Campbell​
Junior Capital​
Senior Vice President​
t 0203 837 3404​
donald.campbell@pricoa.com​

Jack Gilbert​
Investment Director​
Senior Vice President​
t 0203 837 3404​
jack.gilbert@pricoa.com​

____

DISCLOSURE
This article represents the views, opinions and recommendations of the author(s) regarding the economic conditions, asset classes, securities, issuers or financial instruments referenced herein. Distribution of this information to any person other than the person to whom it was originally delivered is unauthorised, and any reproduction of these materials, in whole or in part, or the divulgence of any of the contents hereof, without prior consent of Pricoa Private Capital is prohibited. Certain information contained herein has been obtained from sources that Pricoa Private Capital believes to be reliable as of the date presented; however, Pricoa Private Capital cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. The information contained herein is current as of the date of issuance (or such earlier date as referenced herein) and is subject to change without notice. Pricoa Private Capital has no obligation to update any or all of such information; nor do we make any express or implied warranties or representations as to the completeness or accuracy or accept responsibility for errors. These materials are not intended as an offer or solicitation with respect to the purchase or sale of any security or other financial instrument or any investment management services and should not be used as the basis for any investment decision. Past performance is no guarantee or reliable indicator of future results. No liability whatsoever is accepted for any loss (whether direct, indirect, or consequential) that may arise from any use of the information contained in or derived from this report. Pricoa Private Capital and its affiliates may make investment decisions that are inconsistent with the recommendations or views expressed herein, including for proprietary accounts of Pricoa Private Capital or its affiliates.
The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and are not intended as recommendations of particular securities, financial instruments or strategies to particular clients or prospects. No determination has been made regarding the suitability of any securities, financial instruments or strategies for particular clients or prospects. For any securities or financial instruments mentioned herein, the recipient(s) of this report must make its own independent decisions.
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Pricoa Private Capital (‘PPC’) is a trading name of PGIM, Inc. (‘PGIM’), the principal asset management business of Prudential Financial, Inc. ('PFI'), and it is also a trading name of PGIM Private Capital Limited and PGIM Private Capital (Ireland) Limited. In the United Kingdom, information is issued by PGIM Private Capital Limited with registered office: Grand Buildings, 1-3 Strand, Trafalgar Square, London, WC2N 5HR. PGIM Private Capital Limited is authorised and regulated by the Financial Conduct Authority (“FCA”) of the United Kingdom (Firm Reference Number 172071) and registered in England No. 1331817. In the European Economic Area (“EEA”), information is issued by PGIM Private Capital (Ireland) Limited with registered office: Pramerica Drive, Letterkenny Business and Technology Park, Letterkenny, Co Donegal, F92 W8CY, Ireland. PGIM Private Capital (Ireland) Limited is authorised and regulated by the Central Bank of Ireland and registered in Ireland under company number 635793 operating on the basis of a European passport. In certain EEA countries, information is, where permitted, presented by PGIM Private Capital Limited in reliance of provisions, exemptions or licenses available to PGIM Private Capital Limited under temporary permission arrangements following the exit of the United Kingdom from the European Union. These materials are issued by PGIM Private Capital Limited and/or PGIM Private Capital (Ireland) Limited to persons who are professional clients as defined  under the rules of the FCA and/or to persons who are professional clients as defined in the relevant local implementation of Directive 2014/65/EU (MiFID II).