Vertical Software Private Equity Deal with 8% Preferred Return

This week I’m sharing another private equity deal being done as a single purpose vehicle (SPV fund).

The company, codenamed Project Raider, is a leading vertical market software business in a recession-resistant niche.

The investment thesis includes cost optimizations, an attractive entry price, a strong in-place management team, experienced sponsors on the PE side, and potential new product introductions.

This is a unique deal in that (a) it has an 8% accruing preferred return and (b) is under LOI to close promptly.

Investors will own equity via the SPV in the corporation that will operate and then exit in ~5 years after paying down the debt used to finance the transaction from operational cash flow. The sponsors are targeting QSBS/Sec 1202 tax treatment.

The capital contribution from the sponsoring partners is ~5% of the total equity in the deal.

Investor bite-size is $100k-$1,500k+. Accredited investors or Qualified Purchasers only.

With the deal closing soon and an operating team in place well suited to affect operational changes from Day 1, it’s off to a good start.

If you’re interested in learning more, reply to this email. I can get you in touch with the sponsors for more information.

Michael