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Middle Market Direct Lending

NewStar is a leading provider of flexible financing options to private equity-backed companies in the U.S. middle market. Our clients manage money for some of the largest pensions, endowments, foundations and sovereign wealth funds around the world. We understand these assets represent real money from real people, and we take our role in their investment process seriously.

Our track record of success helping private equity firms, and their investors, achieve their goals includes hundreds of deals completed over more than a decade. We have extended more than $12 billion of financing commitments to portfolio companies operating in industries that we understand and believe in.

Our value proposition isn’t simply to offer a set of financing options to fund acquisitions. It is intended to be broader, and includes a commitment to responsiveness, respect and trust, which we believe leads to a better alignment of interests and certainty of execution for deals in a face-paced environment.

We work with our clients to develop transaction opportunities though teams of experienced, senior bankers organized around key industry and market segments. They are focused on building trusted relationships with investment professionals at private equity firms pursuing middle market investment strategies. NewStar also has a strategic relationship with Blackstone’s GSO Capital, with whom we partner on transactions to provide solutions for clients that need to address specific financing objectives, which may include, among other things, large size, additional flexibility and tight timing requirements.

Our bankers use their deal experience and deep industry knowledge to identify and evaluate opportunities in order to advise private equity firms on value-enhancing financial strategies that help them achieve their objectives. Their insightful feedback and prompt market reads are valued by clients operating in a fast-paced M&A environment.

We target hold positions of up to $50 million with the ability to underwrite and arrange much larger deals. Transaction proceeds are typically used to fund acquisitions, working capital, growth strategies, and recapitalizations. We have deep industry expertise across targeted sectors, but will also consider transactions outside of those focus areas. Our typical borrower is a private company with a single B rating profile and operating cash flow (EBITDA) of $15 - $50 million that is being acquired by a private equity firm that we know. Because of our track record and trusted relationships, we often finance multiple deals for the same private equity firms.

Financing Products

  • 1st lien senior secured revolvers and term loans
  • 1st lien senior “stretch” term loans
  • Unitranche loans
  • 2nd lien senior secured term loans
  • Equity co-investments

Industry Focus and Expertise

  • Business & technology-enabled services
  • Food & beverage
  • Industrial & manufacturing
  • Consumer goods & services
  • Telecom & telecom services
  • Healthcare & health science
  • Insurance & financial services
  • Software & technology
  • Transportation & logistics

Transaction Purpose

  • Leveraged buyouts
  • Recapitalizations
  • Add-on acquisitions
  • Refinancings
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