Into Recovery and Growth--Private Company Challenges

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A Novel Period

The Sun Also Rises, the title of Hemingway’s 1926 novel, characterizes our outlook today as the nation’s economy begins recovery with the objective to progressively restore activity to pre-pandemic levels. Private companies play a leading role throughout the economy, maintaining and creating more jobs than all the largest publicly traded companies combined because of their ability to innovate and react quickly. And so, it is vitally important that this sector receives the support necessary as it recovers from the economic slowdown.

Middle Market Company Stresses

As we emerge from these past months of challenge, the condition of many private companies, particularly within the lower middle market, will be stressed to various degrees depending upon the strength of their balance sheets prior to the downturn, reactive cost reductions and the condition of customers and suppliers, among other factors.

Being private usually means such companies have more limited access to capital, thus putting them at greater risk of stress or even failure. Likewise, business acquisition and exit transactions often become black-box questions that confront private company management and ownership.

Solutions for Private Companies

Alternative solutions for stressed private companies include debt restructuring with current lenders, refinancings with new lenders, and strengthening of balance sheets with additional, patient capital, among other options depending upon each circumstance. Strategic solution alternatives include partial or complete ownership exit transactions, combinations with stronger industry partners or even availing of favorable market conditions by pursing strategic growth through acquisition.

CIP Capital’s Leadership

These private company challenges, whether impacting now or expected soon, require the assistance of professional advisors who have the knowledge, capability and capacity to guide companies through the crucial period of recovery and growth.

CIP Capital Advisors, LLC plays a leading role in assisting private companies through the complexities of recovery and growth. CIP Capital’s operations, finance and investment banking professionals form a cohesive team in assessing each unique circumstance and in leading the process to achieve meaningful turnaround, financing and corporate transaction results.

We look forward to discussing how the CIP Capital Advisors team can assist companies and lenders during this critical period.