ECONOMIC UPDATES

From this page you can access recent transaction announcements, commentary on the financial markets, see the latest version of The Optivest Quarterly Newsletter and other communications we produce with the intention to inform our relationships, clients and prospective clients of the capital markets and economic environment.

Trend Offset Printing 1/19

Optivest IB Announces $40 Million Debt Financing for Trend Offset Printing

We are pleased to announce the $40 million senior debt financing for our client, Trend Offset Printing. Optivest IB acted as financial advisor for the transaction.

Established in 1955, Trend Offset Printing (the "Company") is a leading fully integrated commercial and retail printer specializing in offset and digital print services. Through its eight locations, Trend services clients' print media needs including magazines, catalogs, direct mail, and retail inserts on both a national and local level.

Advising the owners and Trend management, Optivest IB was successful in positioning the Company and its integration plan to commercial lenders pursuant to Trend's recent acquisition of LSC's retail offset printing facilities. The completion of this debt financing provided by Bank of America represents an important milestone for both the Company and its management team, as the Company continues to strengthen its balance sheet to support its organic growth and acquisition initiatives.

RAM Recap. w Westshore
1/19

Optivest IB Announces Majority Recapitalization of Reliant Account Management

We are pleased to announce a majority recapitalization for our client, Reliant Account Management, by Westshore Capital Partners. Optivest IB acted as exclusive financial advisor to Reliant Account Management.

Founded in 2009, Reliant Account Management ("RAM" or the "Company") is a specialized independent third-party payment processor and trust accounting company. Utilizing a best-in-class software platform that seamlessly integrates into multiple counterparty management information systems, RAM is rapidly growing into the industry leader and gaining market share as the payment processor of choice for consumers and debt resolution companies.

"The Optivest IB team proved to be uniquely invaluable in navigating us through all stages of the transaction," said Greg Winters, President of RAM. "We now understand the importance of retaining an investment banking team that has the depth of knowledge and capabilities in managing both the transactional and the relational elements of bringing on institutional capital partners."

Advising the owners and RAM management, Optivest IB was successful in sourcing the Company's first institutional capital partner with Westshore Capital Partners, a leading private equity firm focused on small-to-midsized growth companies. The completion of this majority recapitalization, which included debt financing from Capitala Group, represents a significant milestone for both the Company and its management team and positions RAM to aggressively pursue its growth objectives.

Recession Fears and
M &A

Premium equity valuations and rising interest rates stress our markets on a fundamental basis that high consumer confidence and low unemployment in the U.S. ultimately cannot outrun. Even as I am drafting this article, last week the Dow 30 took an 830 point one-day hit, citing rising treasury rates, lower corporate earnings guidance, inflation, trade conflicts and anything else the market can use to support an overdue adjustment or correction.  Equity markets do not need a recession as an excuse to correct.  However, corrections often fuel fear and caution.

So what does this mean in terms of the M&A markets? Let's take a closer look.

Recession buyers flight to quality

Deal activity does tend to decrease during times of economic turbulence. Credit becomes harder to secure and declining stock market values do spill over onto private company valuations. Many buyers take the “flight to quality” route, buying companies or assets that are perceived to be best in class with mission critical value propositions and operating leverage that provides opportunities to capture market share gains from weaker competitors.

Recession buyers often reap long term rewards

While turbulence brings challenges, it also creates opportunities. Companies that are in a solid financial position can profit from downturns by seeking opportunistic acquisitions.

Firms seeking to grow via the right deal will often find no better time to strike an opportunistic bargain than during a recession. However, these buyers must be disciplined to overcome short-term fears and capitalize on long-term rewards. Fewer buyers and tighter credit create an atmosphere of urgency that pushes targets to sell. Tough economic conditions can also allow strategic buyers to pick up troubled companies at a substantial discount. With strategic precision and a farsighted view, buyers can accelerate their market position and strengthen their financial profile even when broader economic conditions lag.

Recession sellers can seek a “Merger of Peers”

Companies that are being challenged during a recession or companies that are facing bank covenant pressure and lack a strong balance sheet or a deep pocket equity partner, are often compelled to consider a merger with a peer company. A synergistic peer company can ultimately provide a healthier, more competitively restructured business often with greater scale and better operating leverage to survive - and prosper – despite an economic recession.

Deal experience through economic cycles

Closing Deals in a Recession:

• M&A activity typically declines in a recession, as lending standards tighten and valuation multiples retract

• Flight-to-Quality and other collective recession responses fuel transactions between the “haves” (buyers) and the “have nots” (sellers)

• If you have a strong balance sheet, strategic precision can help you seize opportunities for growth and market share gains during economic downturns

• Underperforming, undercapitalized companies should consider a “Merger of Peers” strategy

Paul Donnelly and the Optivest Investment Banking team have executed over 95 transactions through all stages of market and economic volatility. We specialize in delivering corporate finance advisory and investment banking services to emerging growth and middle market firms. Thanks to our extensive industry experience, we have the expertise to close the most complex of deals. Over the years, Paul and the Optivest IB team have completed over $3.75 billion in transaction values.

We are available to address your questions and concerns. Please don't hesitate to contact us.