February 21, 2023
The Debt Market Impact on Selling a Business in 2023
With our first two acquisitions and significant growth in our team, 2022 was an exciting and productive year for CPC. We are positioned for further growth in both operating companies and the CPC team as we head into 2023.
While the start of a new year is rejuvenating, this is an uncertain time for the economy. For private company buyers, the credit markets have proven an unreliable source of capital for closing acquisitions. Our investment banking friends have been advising their clients to wait for credit markets to return to “normal” before initiating a sale process. However, with liquidity conditions in the private capital markets squarely in “risk-off” mode, many fear the negative credit cycle may last throughout the year. Lenders are reducing leverage ratios, increasing fixed charge coverage requirements, and raising interest rates. When loans are available, time and expense to closing has increased and availability has decreased.
As a result, all-equity deals could be the star of 2023, making it a good time to talk to CPC. We are an investment holding company that does not use enterprise leverage to fund acquisitions. CPC takes a different approach than traditional private equity firms to building long-term value, supporting management teams’ efforts to excel in what we call the Five Key BattlesTM: People, Systems/Processes, Execution, Customer Intimacy and Product Leadership. We are organized as a company, not a fund, with holding periods that span decades, not years. This structure enables CPC to make long-term investments in operational improvements and growth and patiently implement what we believe to be the best strategies for creating defensible, long-term value that aligns the incentives of shareholders, management and all stakeholders in CPC’s businesses.
We look forward to connecting with you in this new year as we continue our pursuit to Buy. Build. Hold.TM
For more information about CPC and its investment criteria, please contact Kyle Stewart.
CPC is owned by large family offices and successful entrepreneurs that are collectively aligned around long-term decision making and wealth creation. CPC was formed from the merging of Curran Companies’ and C3 Capital’s management teams. We seek to deploy at least $600MM into lower middle market businesses over the next five years. Prior to forming CPC, our management team invested in over 100 businesses covering a wide variety of industries.