CAPSTONE PARTNERS, L.C.

A SOLUTIONS FOCUSED FINANCIAL SERVICES COMPANY

Capstone Partners is a full service "merchant banker."  However, Capstone  focuses on middle market  companies, both private and publicly-traded, as opposed to other traditional merchant banking clients with large investment needs.  Many of our corporate clients include existing public companies trading on the Over-the-Counter Electronic Bulletin Board or on other regional and national securities exchanges. 


We specialize in meeting the business, development and capital needs of these smaller to mid-size companies, which distinguishes us from other financial services firms. 


Our firm includes capabilities in the following areas:

  • Bridge and Mezzanine Financing

  • Private Placements

  • Public Offering Syndications

  • Convertible Debt Financings

  • Asset-Based Financing

  • State and Federal Securities Law Compliance

  • Mergers and Acquisitions

  • Debt Portfolio Restructurings and Re-capitalizations

 

OUR PRIVATE EQUITY CONNECTIONS

 

Capstone  has an affiliated relationship with Caledonian Private Equity Partners, L.P. (“CPE”), an opportunistic private equity buyout fund that specializes in distressed asset investing and restructurings (www.caledonianprivateequity.com).   Our chief executive officer, Mr. Bartko, is a general partner of CPE.  The CPE management team possesses expertise in equity as well as debt financings. This allows for a very comprehensive assessment of requirements and financial scenarios which is then combined with years of hands-on experience to produce realistic and optimum solutions that can substantially enhance the value of CPE’s portfolio companies. Such know-how is complemented with a well established network of relationships that cover the top players in selected industries. CPE’s in-house capabilities cover every aspect of any transaction that may be undertaken by the partners of CPE.  

 

OUR ADVISORY SERVICES—CAPITAL RESTRUCTURING

 

A company may be over-leveraged; it may be considering or operating in bankruptcy; it may have expanded too fast for its capital base; it may need to ride out a recession; it may have lost its largest customer; or its existing lenders may no longer be suitable for the company. The process of efficiently resolving such complex and often urgent situations requires the integration of restructuring services and financial advisory representation.

These situations may involve the private placement or restructuring of senior debt, subordinated debt, and/or equity securities. Capstone’s experienced team can move quickly to execute asset divestitures or a sale of a company or its assets under extremely distressed circumstances.

Capstone’s multi-disciplined approach to corporate restructurings and re-capitalizations affords our middle-market clients access to capital markets and reorganization strategies usually reserved for much larger companies. Our expertise in negotiated settlements with Federal Bankruptcy Courts, secured senior, junior or mezzanine lenders, bondholders and creditor committees has enabled us to develop creative and practical solutions that have exceeded the expectations of our capital restructuring clients.


MERGERS AND ACQUISITIONS ADVISORY

Capstone’s mergers and acquisition team is a group of highly experienced professionals with specific skills and capabilities focused on the sale of closely-held businesses or the divestiture of assets held by publicly-traded companies.  Capstone possesses particular strengths in advising companies in transactions with values in the $10 million to $50 million range. Our seasoned professionals have initiated and closed many transactions in this market. Our professionals work either on the seller’s or buyer’s side of a transaction depending on the nature and objective of the engagement.


There are many factors that need to be taken into account when owners are planning the sale of their company or of select assets. Unforeseen issues can often turn into deal breakers. Awareness of the following issues are crucial to obtaining an optimal value for their company as well as ensuring a smooth transaction. These issues are managed most effectively for our client companies through the deliver of our services:

 

  • Shareholders:  Reasonableness of Valuation, Form of Consideration (cash vs. securities, notes, etc.), Timing, Tax Planning;

  • Management:  Incentives, Contracts;

  • Employees:  Job Security, Culture, Benefit Plans;

  • Marketing Strategy:  Confidentiality, Potential Purchasers, Procedures and Process, Timing;

  • Contract:  Contract Transfers, Financial Structure, Representations and Warranties, Non-compete Agreements, Closing Conditions, Indemnification, etc.


    • OUR PLACEMENT SERVICES


    Capstone works closely with middle-market businesses (both public and private) in order to optimize their capital structure(s) and to utilize the lowest cost of capital available. We  advise clients on how to obtain the lowest cost of capital by seeking various forms of financing including:

    Senior Credit Facilities:

    • Asset based

    • Cash Flow

    • Unsecured

     

    Senior Credit Facilities (revolving and term loans) generally provide capital at the lowest available cost. Accordingly, the foundation of the capital structure for any growing business usually includes senior debt that is supplied by banks, finance companies, and other financial institutions.

    Asset Based loans tend to be used for commodity industries, turnarounds or early stage companies. Cash Flow loans tend to be used for companies that are not capital intensive and have a consistent earnings history.

    Because of constantly changing policies and macro-economic trends that influence the credit decisions of senior lenders, many middle-market businesses obtain far less Senior Debt than an optimum capital structure would suggest. When this occurs, businesses utilize higher cost capital, such as subordinated debt or equity, which is often highly dilutive to the shareholders of a growing business.

    Through its knowledge of capital structures, and its contacts with numerous providers of Senior Debt Capital, Capstone is able to obtain the most attractive credit terms for its clients, i.e. the most funding at the lowest available cost.


    Subordinated Debt/Mezzanine Finance:

    • Collateralized Debentures

    • Subordinated/Mezzanine Debt

    • Senior or Subordinated Notes

     

    Subordinated Debt/Mezzanine Capital has debt characteristics, with equity options. This form of capital is non-control capital, which can either have current pay coupon or be paid PIK (paid in kind or deferred). Subordinated Debt is patient capital, which acts like equity but is classified as debt.

    Privately placed Subordinated Debt, is supplied by private mezzanine funds, insurance companies and hedge funds. Capstone’s team has deep relationships with mezzanine capital providers, which will provide maximum flexibility in our client's capital structure.

    Equity:

    • Private Equity

    • IPO

    • Secondary Offering

     

    Equity capital can be obtained through either public or private sources. The private equity markets can be an excellent source of capital for middle-market companies undertaking internal expansion, capital investment, acquisitions and re-capitalizations.

    In addition, private equity can provide shareholders immediate liquidity for a portion of their holdings as well as future liquidity for their remaining holdings.

    Institutional private equity firms seek either control or non-control investments. Private equity firms often function as a strategic partner by augmenting the company's management team.

    Capstone’s team is skilled at advising business owners and management teams with regard to equity capital formation issues including the type of capital structure, size of offering, structure of the security, and pricing of the securities to be offered.