CapitalSpring

Sector

Private Debt

Geography

Nashville, TN, USA

Deal Date

April 2020

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About the Manager

Founded in 2005, CapitalSpring Finance Company LLC (“CapitalSpring") provides structured financing solutions to franchisees and branded restaurant operators across North America. Primarily, CapitalSpring issues senior secured debt, subordinated debt, unitranche investments, mezzanine/preferred capital, and, to a lesser extent, common equity financing.

The firm's 29 employees, including 17 investment professionals, span four office locations: Nashville, Los Angeles, New York and Atlanta. With over $1.8 billion invested in more than 60 brands across the US and Canada, CapitalSpring has become one of the most active institutional investors in the restaurant sector. Their expertise is reflected in the 16+ year track record, and their industry specialism puts them in a unique position to offer significant value-add to underlying portfolio companies.

Investment Approach:

CapitalSpring

  • Focus on value-oriented segments of restaurant industry: Quick Service, Fast Casual and Family Dining

  • These areas of the market have proven resilient in previous economic downturns

  • Experienced management teams operating across franchised restaurant industry with strong, longstanding brands and significant regional/national presence

  • Insufficient capital from traditional bank lenders gives market to more creative/flexible investment approaches

  • Mitigate risk by seeking multi-year call protection/make-wholes, strong covenants, guarantees and credit enhancements

  • Senior secured and mezzanine debt/opportunistic equity

  • Allows ongoing capital needs to be met - incremental investments, with contractual right of first refusal on follow-ons

  • Private equity-style portfolio oversight: data-driven monitoring mitigates risk and enhances value-maximizing exits