Financing And Capital Raising Efforts
Our financing and capital raising expertise lays the groundwork for long-term successful companies. Our professionals have worked with companies that range from well established public corporations to early stage entities across many industries.
All securities transactions are provided through East Wind Securities, LLC (see www.eastwindadvisors.com). Daroth’s team has experience in identifying sources of capital, establishing capital structures, and placing or advising on the following types of securities and transactions. :
Bank Debt / Senior Debt Placements
Our goal is to assist our clients in analyzing their financing alternatives to determine the most efficient way to raise growth or working capital. We further assist in choosing the type of facility or security that best suits their current and long term needs. We support companies seeking to raise senior notes on a secured and unsecured basis, term loans or revolvers supported by cash flow or accounts receivable, inventory, equipment or other assets. Our successful analysis and approach have in several instances enabled our clients to significantly lower their cost of capital.
For companies seeking to effect a consent or exchange offer on outstanding classes of securities, we advise on the most efficient and cost effective process in order to negotiate a quick and successful transaction. We have extensive experience in structuring and successfully executing both consents and exchange offers.
ESOPs can be an appropriate vehicle for some businesses when the business owner is interested in simultaneously obtaining liquidity and providing employees an opportunity to acquire equity. Daroth works with legal and accounting experts to advise clients on the feasibility of establishing an ESOP, assists in implementing the ESOP, advises on the tax benefits associated with the transaction and provides ongoing support for the ESOP. We also assist in obtaining the transaction financing and rendering the requisite opinions required to close on the transaction. If structured correctly, ESOPs can frequently provide stockholders and investors with superior returns to other types of recapitalization and sale transactions.
Daroth has long-term relationships with many leading mezzanine lenders, and has significant experience structuring and raising mezzanine capital for acquisitions and growth financings. We also work with our clients to assess the impact of the proposed transaction on the Company so as to maximize shareholder value.
Over the past several years, private investments in public equities (“PIPEs”) have become an increasingly popular alternative to public offerings as a source of capital for public companies. In certain circumstances or under certain market conditions, public financings may be unavailable or undesirable for a publicly traded entity. In such instances, private placements of equity-linked securities can be particularly attractive in order to fund corporate development, commercialization, growth or acquisitions. PIPEs are privately negotiated investments made by institutional and accredited investors and take a variety of forms and structures including: common stock, common stock and warrants, convertible preferred stock, convertible debt or equity lines. Daroth is experienced in structuring, negotiating and executing these types of financings as well as identifying the best providers of such capital.
Daroth has significant experience raising private equity and debt capital for our clients. As compared to a public offering, raising capital in a privately negotiated transaction offers several advantages, including speed of execution and significant flexibility in structure and terms. Each capital raise is unique, the terms and conditions of each security vary widely and are often extremely complex. The true cost of capital is not always obvious as certain investment structures could impede long-term shareholder value. We work with our clients to help them understand and structure the best security for their needs. Some of the more common issues include preference rights, warrant coverage and anti-dilution mechanisms. Having worked on a wide variety of private placement transactions, we have developed the expertise required to guide a company through the private capital raising process. Furthermore we leverage our established relationships with leading institutional investors, creating a competitive process that produces optimal transaction terms for our clients.
We are active participants in all facets of a private placement including:
We work with our clients as independent advisors on Initial Public Offerings (“IPOs”) and other equity and debt offerings including high yield financings. By leveraging our many years of Wall Street experience and having the most up-to-date knowledge of the capital raising markets, we assist our clients in choosing the best underwriters for their public capital raising efforts including the best lead underwriter and best co-managers. We become involved early on and assist in conducting the review process of the investment banks, help assess the strengths and weaknesses of the different firms, review the banks research efforts and help guard against under-priced offerings.
In situations where a company's capital structure becomes a hindrance to the efficient and competitive operation of its business, Daroth supports management teams in the evaluation of available alternatives to effect a restructuring of the Company. This process may involve raising additional equity from financial sponsors or could involve raising debt to provide liquidity. In either case, the combination of Daroth’s depth of knowledge and relationships in the private equity community, and our expertise in raising debt capital, makes Daroth a significant partner in the evaluation, execution and closing process.