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.
Staffing companies in the lower middle market often turn to M&A investment banks when considering they are looking to sell or recapitalize their business. The industry’s fragmentation provides opportunities for strategic exits through mergers and acquisitions, often to larger staffing agencies that could be privately held, private equity-backed or publicly traded. This allows the owners (often the founders) to cash in on their life’s work.
M&A firms play a crucial role in guiding companies through the process. They assist in preparing comprehensive marketing materials and diligence documents, identifying suitable buyers, conducting due diligence to highlight synergies, and navigating negotiations to ensure alignment between strategic goals and transaction benefits. In many cases, we’ll even orchestrate the financing for the buyer.
The collaboration between staffing companies and investment banks extends into the intricacies of deal execution, where the banks contribute their experience in structuring deals, navigating regulations, and maintaining confidentiality. This synergy positions staffing firms for successful exits, maximizing value and ensuring a seamless transition in the dynamic lower middle market.
We have had success working with human capital companies that have strong profitability and differentiation. Companies that have gross margins exceeding 25%, and derive their revenue primarily from temporary staffing services rather than direct hire or recruitment process outsourcing are looked at favorably by the market. They often-times end up being bolt-on acquisitions for other, larger staffing and human capital businesses.
The M&A auction process that we employ for staffing and other professional service companies involves inviting multiple potential buyers to competitively bid for the business. We start by creating the marketing materials for the client’s company, a list of industry-specific buyers (financial and strategic), and then put the business on the market. We give the potential buyers terms that they must meet and a submission date of when they must get us their indication of interest. We then work with the business owner to short-list the best buyers, meet with them in-person and give them a date to submit their LOI by.
this structured approach fosters a dynamic environment, driving competitive terms and multiple offers. Business owners benefit from increased negotiating leverage, and the potential for a more efficient transaction, ultimately optimizing the sale proceeds and outcome.
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.
Some business owners are looking for a growth partner and minority investor as opposed to selling all of their business outright.
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.
If you haven’t already, read about selling your staffing business to get an in-depth look at the process.
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.