Many of Raincatcher’s Partners and Mergers and acquisitions (M&A) advisors come from backgrounds as middle market consultants, accountants, and investment bankers.
We aim to bring a middle market team and skillset down to the lower middle market to execute recapitalization and M&A, where it has historically been less available.
Raincatcher partners and M&A advisors come from successful careers as investment bankers, Big 4 accountants and consultants and as small business owners.
We provide investment banking services to assist founder and family-owned companies in maximizing their business value and capabilities. If you are looking to raise capital or sell your business, we welcome you to send us a message to get introduced.
Lower middle market service businesses (companies with up to $100m in sales), engage M&A firms like Raincatcher for various reasons. The most common reason is to sell all or part of their business and that ends up being about 80% of our work. Many of these service companies are founder or family-owned and after decades at the helm, they are looking to sell their business so that they can retire. However, many firms also look to grow through acquisition via an outsourced corporate development service like what we offer. This is quite common amongst service companies, as there are very low barriers to entry in the industry and therefore it is a fragmented market with thousands of small businesses that make great acquisition targets.
Both business and consumer service companies are seen as strong industries for investment by most private equity firms. This is in part due to how lean and capital-efficient these companies are. Additionally, the industries lend themselves to consolidation. With centralized accounting, management, and dispatch functions, private equity groups have been able to efficiently scale multi-location residential and business service companies. Additionally, most of the service sub-industries lend themselves to having recurring or re-occuring clientele.
Lower middle-market investment banks that have a strong practice in working with service companies such as Raincatcher should have much more than just expertise in selling companies, they should have deep expertise in the various service industries that their clients operate in to know how those companies are valued, which buyers specialize in that industry, how to position the business in the marketing documents, what macro-economic factors affect that service sector, etc.
Some of the business and consumer services industries we have had success representing clients in are: security service, residential services (HVAC, flooring, decking, etc.), marketing agencies, human capital (staffing) companies, IT services, facility services and maintenance, financial services etc.
It’s also worth noting that since 2020, a number of service businesses that traditionally focused on serving just their geographic area have now gone fully remote. This movement has been swiftly followed by private equity groups looking to buy those companies to combine them (roll-up strategy)
Our clients typically come to us with an array of desired outcomes in mind. Once we are able to get a better understanding of your company and what you’re looking to accomplish, we can give guidance on what you can expect from the market and help guide you on that process.
Your services industry focused investment banker can answer any questions you have about getting your materials together or preparing the business for sale.
Whether we are working with clients on their buy-side or sell-side M&A, or an equity or debt recapitalization, there are similarities in our approach.
We believe that the through preparation of a data room and investor materials is crucial in achieving the desired outcome and in giving our clients the most offers to look through.
This process, as well as the caliber of the team executing it is the primary difference between a business broker and an investment bank.
Whether we are targetting private equity groups, banks or private money lenders or solely focused on strategic buyers, we tailor a prospect list to each client to make sure that we are getting the business in front of the proper group of debt and equity investors.
Once IOI’s have been received from potential debt and equity investors, we work with our client to short-list the most capable firms and share more information with them ahead of their LOI.
Once they submit an LOI, we negotiate those deals extensively before one is signed and due diligence commences.
Start by requesting a consultation to see if our service industry team can help you sell or recap your business.
If you’re a business owner and you are currently looking for growth capital, buying out a partner or investor, or taking on an investment partner; we welcome the opportunity to get introduced to discuss our specialized debt and equity recapitalization process and services.