Mirus Capital AdvisorsMirus Capital Advisors

Fund Raising, Mergers and Acquisitions, News, Private Equity

PEGs bring new life (and capital) to Commercial Lenders

Posted by

Commercial Lenders Get Second Wind from Private Equity

May has been a busy month for private equity firms doing deals for commercial finance companies.  This week H.I.G. Capital acquired a stake in First Capital Investment, and on May 12th, Olympus Partners acquired Churchill Financial.  Both First Capital and Churchill offer equipment financing, term loans and revolving credit facilities to small and mid-sized companies.

Founded in 2003 and headquartered in Boca Raton, FL, First Capital is a leading commercial finance company providing asset based lending and factoring to small and mid-sized companies. The investment from H.I.G. and others including Morgan Stanley will primarily be used to expand First Capital’s loan portfolio, currently totaling approximately $1 billion in assets under management.

“First Capital has a proven business model from loan origination and underwriting, through to exceptional loan servicing processes and systems”, said Brian Schwartz, Executive Managing Director of H.I.G. Capital in an e-mail.  “The Company is well positioned to capitalize on a unique market growth opportunity.  We are pleased to have the opportunity to work with John Kiefer, Lee Wilson, and their outstanding management team.”

Churchill Financial Group, headquartered in New York, is a commercial finance company providing senior and one-stop financing to middle market companies. Churchill Financial has approximately $1.25 billion of committed capital to support its senior lending activities and focuses primarily on lending to companies backed by leading private equity firms.  On May 12th, Churchill announced that Olympus Partners of Stamford, CT has acquired the company and agreed to invest additional capital to support the growth of its core middle market lending business. 

“The opportunity to provide senior debt financing to solid middle market companies backed by top-tier private equity firms has never been more attractive than it is today,” said Ken Kencel, president and CEO of Churchill Financial in a press release.  “With banks and larger commercial finance companies constrained in their lending activities, we see an opportunity to aggressively build our middle market lending franchise by providing funding to this underserved segment of the U.S. market and drive attractive returns to our investors.”