Monday, November 19, 2007

California Capital Marketplace November Meeting

The California Capital Marketplace monthly meeting continues to attract a very stimulating mix of senior executives and professionals with at least 15 years of experience in areas including lending, investment banking, accounting, international trade and legal.

The November meeting featured a case study by Kevin Shultz of FTI Capital Advisors. Shultz described a situation where his team was retained to find capital for a struggling company in the fashion footwear business. The deal was named a 2006 finalist by The M&A Advisor for both the Middle Market Deal of the Year and the Consumer Products Financing of the Year.

The closed financing was very creatively structured and encountered many challenges and twists and turns over the course of many months. The efforts of FTI Capital Advisors clearly points out the value of a good intermediary whether it be for the small, middle or large corporate markets. FTI Capital Advisors brought in the right lender and helped the borrower present its story and proposed structure in a compelling way.

Shultz pointed out that given the change in the capital markets over the last six months, this deal would be hard pressed to close in the current credit environment. The borrower has also returned to some of its previous habits of bad decision making once again proving that the definition of insanity is making the same mistakes and expecting different results.

Here's a couple of quick comments from the roundtable discussion which followed:
  • The M&A markets are slowing down across the board as investors are waiting to see what direction the economy heads in 2008.
  • Both lenders and investors are focusing more on fundamentals - code word for "cash flow".
  • Here's the scariest one. No one really knows the extent of the subprime mess and the potential losses to be absorbed by lenders.
  • Expect a bumpy ride for the next 12 - 18 months. According to one intermediary, his phone is ringing quite a bit more these days. I'm experiencing the same.
  • The hedge funds still have lots of money and have to put it to use.

I'll be taking the rest of this week off to travel for Thanksgiving break. Wishing all of you a joyous start to the holiday season!

Need help finding the right lender or telling your story the right way? Read "Matchmaking for Business Loans" and give me a call!

Tags : California Capital Marketplace , FTI Capital Advisors , cash flow , business loans

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