NewSpring, a family of private equity strategies, has completed 16 separate investments in lower-middle-market companies to date in 2020. This deal flow pace is ahead of prior years and demonstrates the firm’s unique ability to invest through all economic periods with its proven, flexible, multi-strategy approach.
“NewSpring’s multi-strategy approach was formed to support the range of capital needs often experienced by businesses in the lower-middle market, which is large and highly fragmented,” says Jon Schwartz, President and COO of NewSpring Capital. “By specialising in this market segment for over 20 years, building deep relationships with proven, innovative management teams, and providing a unique mix of flexible financing options that maximise the long-term growth potential of our portfolio companies, we’re able to deploy capital in all economic environments – even during a global pandemic.”
Lower-middle-market businesses are often undercapitalised and NewSpring has strategically partnered with those companies that have solid underlying fundamentals, innovative leadership teams, and significant growth prospects. Combined with the Firm’s unique ability to support a wide range of company stages and capital needs in diverse industries, NewSpring’s deal flow pipeline remains robust, even amid Covid-19 and significant economic uncertainty.
To date in 2020, NewSpring has deployed USD211 million in capital across 16 new investments. The Firm has also completed four key add-on transactions. These investments were driven by a strong pipeline heading into COVID-19 and represent both mission-critical industries well-positioned to withstand the current downturn as well as industries where NewSpring has significant experience, like manufacturing and business services. Considering NewSpring’s size, scale, investment experience, and repeatable processes, the Firm can promptly and thoroughly diligence a deal from inception to close.
“While we’re encouraged by all of our recent activity, we also continue to exit investments and remain focused on returning capital to investors,” says Schwartz. “Having invested and returned capital through multiple down-market cycles and recessions in the past, our team knows how to navigate these economic periods for the benefit of our investors.”
“NewSpring’s infrastructure provided us with the resources and leverage necessary to remain aggressive on new deals during the pandemic,” says Adam VeVerka, Partner and Business Development Leader at NewSpring. “Our investment teams were able to remain focused on existing portfolios and value creation, while simultaneously playing offence with prospecting and evaluating new opportunities, allowing us to put capital to work, even in this environment. Having a close-knit team with years of experience working together provides us with an operational advantage and networks that are deep and wide. We’re continuing to see attractive deals in the market and are encouraged by the momentum experienced across all of our investment strategies to date.”