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FINANCIAL SPONSORS INSIGHT
Financial Sponsors InsightConsumer & Retail // Convenience Store & Fuel Products DistributionDiversified Industrials // Energy // Financial Services // Health Care // Real Estate Technology & Services
APRIL 2020
IN THIS ISSUE
Raymond James Overview......................Economic Outlook....................................Private Capital Solutions Group………….Representative Transactions………….....Sector Contacts..…………….………...….
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David ClarkManaging DirectorHead of Financial Sponsors Group [email protected]
Ben RodmanManaging Director [email protected]
Christian BullittManaging Director [email protected]
Edward LeeManaging Director [email protected]
Dennis ZhangManaging Director & Head of Asia [email protected]
Allan BertieManaging Director Co-Head of European Investment [email protected]
Philip SteinManaging Director [email protected]
Stuart SparkesManaging Director [email protected]
EU BASED COVERAGEUS BASED COVERAGE
FINANCIAL SPONSORS INSIGHT
• Recognized with three M&A Deal of the Year awards in 2019 by The M&A Advisor• Recognized with one Best PE Growth Capital Deal award in 2019 by M&A Awards• Recognized with two Deal of the Year awards in 2019 at The M&A Advisor Turnaround Awards• Recognized with three International M&A Deal of the Year awards in 2019 by The M&A Advisor• Recognized with three M&A Deal of the Year awards in 2018 by The M&A Advisor• Recognized with five International M&A Deal of the Year awards in 2018 by The M&A Advisor• Honored with two Deal of the Year awards in 2018 at The M&A Advisor Turnaround Awards• Recognized with three M&A Deal of the Year awards in 2016 and 2017 by The M&A Advisor • Recognized with two International M&A Deal of the Year awards in 2017 by The M&A Advisor
RAYMOND JAMES
• Full-service financial services firm • Founded in 1962; public since 1983 (NYSE: RJF) • Fiscal 2019 net revenue over $7.6 billion; net income
over $1.03 billion • International operations in Brussels, Calgary,
Düsseldorf, Frankfurt, Geneva, London, Munich, Paris, Toronto, and Vancouver
INVESTMENT BANKING
• Over 375 investment banking professionals organized by industry and transaction groups
• Raised nearly $220 billion in capital for our corporate clients since 2015
• Completed over 720 middle-market M&Atransactions since 2015
EQUITY CAPITAL MARKETS
• Powerful institutional and retail distribution capabilities • More than 8,000 financial advisors serving nearly 3.0
million accounts• Global institutional sales force with 90+ professionals,
servicing more than 3,000 institutional accounts
EQUITY RESEARCH
• Over 60 fundamental equity analysts covering nearly 1,200 companies in nine highly focused industries
• Ranked in the top 10 among all brokers in the U.S. in StarMine Analyst Awards from Refinitiv over the past five-year period for total awards won (2019)
RAYMOND JAMES OVERVIEW*
AWARDS AND RECOGNITION**
RECENT PRESS RELEASES
4/09/20 – Raymond James European Investment Banking appoints Alastair Rogers as managing director of Diversified Industrials
3/31/20 – Raymond James appoints Allan Bertie as co-head of European Investment Banking
3/31/20 – Raymond James announces closing of offering of $500 million senior notes
3/27/20 – Raymond James to donate $1.5 million to aid those impacted by COVID-19
RAYMOND JAMES IN THE NEWS
Ed Mills on BloombergEd Mills, Washington Policy Analyst for equity research at Raymond James, discusses the impact of the coronavirus on the markets. He speaks to Bloomberg's Scarlet Fu and Romaine Bostick on “What’d You Miss?.” Watch here.
2*As of 2019 fiscal year-end**Criteria for the awards can be found at https://www.raymondjames.com/corporations-and-institutions/accolades
FINANCIAL SPONSORS INSIGHT
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ECONOMIC & HEALTHCARE POLICY SNAPSHOT
*This information comes from a weekly COVID-19 webinar that Raymond James hosts on Sunday nights, featuring our Healthcare Policy analyst, Chris Meekins.Source: Raymond James Research
Weekly Economic Monitor – Unprecedented
Chief Economist Scott Brown discusses current economic conditions.
The broad range of economic data signal that a recession began in March. Real Gross Domestic Product (GDP, the total of final goods and services produced in our economy) is expected to have fallen in the advance estimate for 1Q20. The 2Q20 figures will show an unprecedented decline in activity. Weekly claims for unemployment benefits suggest that the pace of job losses has slowed in the last few weeks, but the pace has remained exceptionally high. One in seven U.S. workers has filed a claim in the last five weeks. Meanwhile, lawmakers in Washington approved another $484 billion in fiscal aid, bringing the total so far to about $3 trillion.
Some 26.5 million workers filed a claim for unemployment benefits in the last five weeks. That figure is inflated a bit by the seasonal adjustment (unadjusted claims normally trend low in the spring). However, we know that not every laid-off worker can file a claim. Still, the magnitude here is gut wrenching. Prior to seasonal adjustment, 24.4 million people filed in the last 12 weeks. That’s nearly 15% of the labor force or one in every seven workers. The government will provide extended unemployment benefits and expand eligibility, but the loss of income will, in turn, reduce spending – and that spending is someone else’s income. Second- and third-round effects will add to economic weakness in the near term and hinder the recovery process. However, fiscal stimulus will help to counter those effects.
Weakness in retail sales and industrial production in March was severe enough to generate declines in quarterly figures. The Chicago Fed’s National Activity Index, a composite of 85 economic indicators fell sharply, and the three-month average, at -1.47, was well below -0.70, the level associated with an increased chance that a recession has begun. The National Bureau of Economic Research’s Business Cycle Dating Committee (BCDC) defines a recession as “a significant decline in economic activity spreads across the economy, lasting from a few months to more than a year.” There is no set definition of “economic activity,” but the BCDC takes that to mean various measures of broad activity, such as GDP, nonfarm payrolls, and inflation-adjusted personal income.
– Raymond James Weekly Economic Monitor – April 24th, 2020 Read here
COVID-19 – Scenario Updates, Phase 4 Fiscal Relief What's Next*
Raymond James Healthcare Policy Analyst Chris Meekins discusses COVID-19
Cases. The U.S. has surpassed 50,000 identified deaths and will surpass 1,000,000 identified cases in the next 24 hours. The good news is that the rate of increase in identified cases of the virus is dropping. We continue to believe the number of infections and deaths are notably higher than official counts. We believe the number of infections in the U.S. based on some recent studies could be above 20,000,000.
Testing. U.S. COVID-19 testing execution ramped up this week, averaging almost 212,000 tests per day. Recent FDA approval of spun swabs using saline solution and more complete utilization of existing labs have both contributed to improved statistics. Antibody tests are slowly but surely becoming more available though questions remain about their accuracy.
Reopenings. States like Georgia, South Carolina, and Oklahoma are gradually reopening the doors of nonessential businesses. We do not believe any are ready to open on a wide scale. As leaders weigh the costs and benefits of protecting public health vs. reviving economies, they should remember that a premature opening and possible resurgence could hurt both parties.
Testing Changes. Recent FDA approval of spun swabs using saline solution and more complete utilization of existing labs have increased the number of tests. Over the weekend, Dr. Fauci stated that the amount of testing needs to dramatically increase before reopenings should occur.
– Raymond James COVID-19 Update – April 26th, 2020 Read here
FINANCIAL SPONSORS INSIGHT
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Raymond James’s Private Capital Solutions team has a proven track record of providing independent advice and implementing the optimal transaction enabling clients to efficiently
achieve their objective.
20+Dedicated bankers
Advised on over $10 billion of debt and equity
financing commitments
Proprietary network of over 1,000
capital sources
Transactions consummated involving over $100 billionof obligations
Delivered 30+fairness opinions, solvency opinions,
valuations, and expert reports
200+restructuring
distressed M&A, recapitalizations and Chapter 11
assignments
Deal Awards* Industry Awards
Individual Awards
2014 + 2015 Turnaround
Investment Banking Firm of the Year
from M&A Advisor
Recognized as a 2019 Outstanding
Investment Banking Firm by
Turnarounds & Workouts
Top 100 Restructuring &
Turnaround Professionals
Emerging Leaders Award Winner (2016)
How We Serve Our Clients
Dedicated Team with Extensive Transaction ExperienceDeep Analysis and Understanding of Every Situation
Comprehensively assess company performance and capital structure, industry landscape, market dynamics
Accurately present the relative advantages / disadvantages of viable alternatives, process timelines and impacts on constituents
Evaluate, strongly recommend and implement the strategy (or strategies) that will provide maximum value based on client goals and objectives
Immediately commence work in the most efficient manner, utilizing senior banker resources across industry and product expertise
Company Performance
Capital Structure
Industry Landscape
Market Dynamics
Legal System and
Strategy
Key Group Stats Awards
SPOTLIGHT – PRIVATE CAPITAL SOLUTIONS GROUP
*Includes deal awards presented by M&A Advisor Turnaround awards in 2018 and 2019.Criteria for the awards can be found at https://www.raymondjames.com/corporations-and-institutions/accolades
FINANCIAL SPONSORS INSIGHT
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Our Private Capital Solutions and Recapitalization & Restructuring Team offers bespoke solutions to creatively address client needs.
Restructuring Advisory Capabilities
Strategic Advisory Restructuring Advisory
Debt & Equity Advisory Capabilities
Capital Advisory Financing Structures
Develop financial and transaction strategies– Target identification– Divestitures
Business plan and financial forecast creation, assessment and implementation Operational and cost reduction improvement
initiatives Develop managerial metrics Fairness opinions
Out-of-court restructurings Distressed M&A Chapter 11 advisory Debt capacity analyses Exchange offers Informal workouts Liquidity and cash-flow forecasting and analyses UCC sales Valuation
Skilled at selling unique, storied credits, where positioning is critical Cost Effective Process
– Eliminate costs and fees of syndication and clubbing deals
– Client is able to fully vet multiple alternativesprior to committing to any lead capital provider
Execution Speed- Master NDAs in place with over 300 key
investors increases speed of execution- Track record of closing transactions in
compressed timeframes
Debt and Equity Capital Products– Asset Based Senior– Cash Flow Senior– Unitranche– Second Lien– Mezzanine and Equity-Linked– Structured Equity
• Special Situation Capital– Non-Traditional Asset Based– Bridge Financings– Distressed Financings
SPOTLIGHT – PRIVATE CAPITAL SOLUTIONS GROUP
FINANCIAL SPONSORS INSIGHT
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SPOTLIGHT – PRIVATE CAPITAL SOLUTIONS GROUP
Private Capital Solutions Transaction Experience
Recapitalization & Restructuring Transaction Experience
Financial Advisor to the Company
Oklahoma
Has been acquired by
Financial Advisor to the Company
Provided a C$100,000,000 senior credit facility to
An asset-backed loan fund of
Financial Advisor to the Company
$420,000,000Global First Lien ABLFacility
$120,000,000Incremental First Lien ABL
Facility$300,000,000
Original First Lien ABLFacility
Financial Advisor to the Company
$18,375,000Majority Recapitalization
Financial Advisor to the Company
$125,000,000Senior Secured Credit
Facility
Financial Advisor to the Company
a portfolio company of
$65,000,000Senior Secured Credit Facility
Financial Advisor to the Company
C$50,000,000Senior Secured Credit
FacilityUndisclosed
Preferred Equity
Financial Advisor to the Company
$755,000,000Acquisition Financing
Financial Advisor to the Company
$300,000,000Junior Capital Financing
Financial Advisor to the Company
Senior Secured NotesFinancing provided by
Financial Advisor to the Company
a portfolio company of
Minority Recapitalization
Financial Advisor to the Company
Has been acquired by
Financial Advisor to the Company
$50,000,000 PIPERecapitalization including
Equity Financing for Acquisition of SafeOp
Surgical and Amendment / Extension of Credit Facility
Financial Advisor to the Company
a portfolio company of
Has been acquired by
Financial Advisor to the Company
a portfolio company of
Has been acquired by
Financial Advisor to the Company
Has been acquired through a§363 Saleby
Perimeter Healthcare
Financial Advisor to the Company
Has been acquired via§363 sale transaction by
Financial Advisor to the Company
§363 Sale Transaction
Financial Advisor to the Company
$800,000,000+
Out-of-Court Restructuring
Preferred Equity Raise and ABL Facility
Financial Advisor to the Company
Has been acquired by an affiliate of
Financial Advisor to the Company
$140,000,000Senior Secured CreditFacility Refinancing
Financial Advisor to the Company
$275,000,000Senior Secured CreditFacility Second Lien Term Loan Preferred
Equity
Financial Advisor to the Company
€164,000,000Senior Secured Credit
Facility AcquisitionFinancing
Financial Advisor to the Company
$110,000,000Revolving Line of Credit
$130,000,000Incremental Revolver & TL
Facility$70,000,000
Convertible Preferred Equity
Financial Advisor to the Company
Private placement of subordinated debt
Sole Placement Agent
*Includes selected transactions from August 2018 – April 2020.
FINANCIAL SPONSORS INSIGHT
RECENT RAYMOND JAMES SPONSOR-RELATED ACTIVITY
*Representative Raymond James sponsor-related deals closed through 4/21/20.7
January 2020
Has been recapitalized by
January 2020
Portfolio companies of
Has entered into a definitive agreement to be acquired by
December 2019
Has been acquired by
December 2019
Has entered into a definitive agreement to acquire
A portfolio company of
December 2019
A portfolio company of
Has been acquired by
November 2019
Have acquired
December 2019
Has been acquired by
A portfolio company of
Workspace Management Business
November 2019
A portfolio company of
Has been acquired by
November 2019
A portfolio company of
Has been acquired by
November 2019
Has agreed to sell a majority stake to
October 2019
Has been acquired by
November 2019
Have been acquired by
Subsidiaries of
September 2019
A subsidiary of
Has been acquired by
October 2019
A portfolio company of
Has been acquired by
October 2019
A portfolio company of
Has divested its patient safety business to
February 2020
Has been acquired by
February 2020
Has entered into a definitive agreement to be acquired by
A portfolio company of
January 2020
Has acquired
February 2020
Has acquired
February 2020
Initial Public Offering$63,692,316
Left Bookrunner
February 2020
A portfolio company of
Has been acquired by
March 2020
A portfolio company of
Has been acquired by
March 2020
A portfolio company of
Has been acquired by
March 2020
Out-of-Court RestructuringMinority Recapitalization ABL
Facility
A portfolio company of
March 2020
6.0% Tangible Equity Units$775,000,000
Bookrunning Manager
$1,425,000,000Common Shares
March 2020
& the managing shareholders
Have sold
To
March 2020
Has invested in
April 2020
A portfolio company of
Has been acquired by
April 2020
Public Takeover of
A portfolio company of
April 2020
A portfolio company of
Recommended cash offer for
FINANCIAL SPONSORS INSIGHT
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INVESTMENT BANKINGJim Bunn | Senior Managing DirectorPresident of Global Equities & Investment BankingSteve Hufford | Managing DirectorChief Operating Officer, Co-Head of European Advisory
INDUSTRY CONTACTSConsumer & RetailMark Goodman | Managing DirectorHead of Consumer & Retail Group
Convenience Store & Fuel Products DistributionScott Garfinkel | Managing DirectorHead of Convenience Store & Fuel Products Distribution Group
Diversified IndustrialsAlper Cetingok | Managing DirectorHead of Diversified Industrials Group
EnergyMarshall Adkins | Managing DirectorHead of Energy Group
European AdvisorySteve Hufford | Managing DirectorChief Operating Officer, Co-Head of European AdvisoryAllan Bertie | Co-Head of European Advisory
Financial ServicesJohn Roddy | Managing DirectorHead of Financial Services Group
Health CareRiley Sweat | Managing Director Co-Head of Health Care GroupAndrew Gitkin | Managing Director Co-Head of Health Care Group
Real EstateBrad Butcher | Managing DirectorCo-Head of Real Estate GroupJamie Graff | Managing DirectorCo-Head of Real Estate Group
Technology & ServicesBrendan Ryan | Managing DirectorCo-Head of Technology & Services GroupJon Steele | Managing DirectorCo-Head of Technology & Services Group
SPECIALTY TRANSACTION GROUP CONTACTSPrivate Capital Solutions and Recapitalization & RestructuringGeoff Richards | Managing DirectorHead of Private Capital Solutions Group
Mergers & AcquisitionsJeff Maxwell | Managing DirectorHead of Mergers & Acquisitions Group
Credit FinanceRaj Singh | Vice Chairman of Investment BankingHead of Credit Finance Group
©2020 Raymond James & Associates, Inc., member New York Stock Exchange/SIPC
UPCOMING CONFERENCESEvents have been canceled or postponed due to COVID-19
RECENT CONFERENCESDecember 9th – 11th
RJ Technology Investors Conference
January 13th – 15th
ICR Conference
January 21st
ACG Boston BIG Deal Event
January 27th – 28th
ACG Northeast Dealmaking Conference
February 18th – 20th
WWETT Show 2020
March 1st – 4th
RJ Institutional Investors Conference
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RAYMOND JAMES EQUITY RESEARCHApril 2020 Research Register
Raymond James Top Stock Picks 2020
The information contained within this material has been obtained from sources considered reliable, but we do not guarantee the foregoing material is accurate or complete. This report was prepared within Raymond James & Associates’ Investment Banking Department and is information purposes only. This report is not a product of Raymond James & Associates’ Research Department; recipients of this report should not interpret the information herein as sufficient grounds for an investment decision or any other decision. The report shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities mentioned herein; past performance does not guarantee future results. Any performance mentioned does not include transaction fees and costs which would reduce an investor’s return. An investment cannot be made directly in a market index.
