Outlook 2025: Private Capital Markets

As we head into 2025, we're seeing many reasons for continued strengthening in the M&A and private capital markets. Over the past year, there has been steady improvement in the rate environment, the GDP outlook, consumer spending and financial health, and corporate earnings.  

Against this backdrop, we believe 2025 will see ongoing opportunities across the private capital markets. See our in-depth perspectives on the overall M&A market.

Private Capital Markets: A Growing Array of Innovative Solutions

While global M&A activity gained momentum throughout 2024, asset quality was mixed across the market as a whole, driving strong competitive tension and valuations for the best of the best while impacting timelines and diligence requirements in some cases. Impatience has been building in the market for high-quality opportunities, and investors are eager to deploy capital and generate liquidity.  

Against this backdrop, our Private Capital Advisory Group continues to work closely with our industry-focused bankers to meet the growing need for novel strategies to raise capital, foster growth, and generate liquidity. "One of the key success factors for Harris Williams in 2024 was tailoring our approach to specific client circumstances with a wider range of solutions," says John Neuner, Harris Williams co-CEO.   

"By integrating deep private capital and industry-specific experience, we can help sponsors and their portfolio companies accomplish their goals through a variety of strategies, from primary fund placements to GP-led secondary transactions such as continuation vehicles, to portfolio company financings including preferred equity and junior debt," adds Andrew Gulotta, a managing director in the Harris Williams Private Capital Advisory Group.  

The transactions highlighted below demonstrate the power of alternative capital structures to facilitate key strategic objectives, from consolidating control, to supporting growth, providing liquidity, and maintaining involvement in exceptional businesses and industry sectors. 

Participating in the next phase of growth

Harris Williams advised on an equity recapitalization via a continuation vehicle of Covia Holdings LLC, a multi-asset holding company, on behalf of entities managed by a key shareholder. Covia is a leading provider of specialty material products serving as critical inputs to a diverse set of end markets.

Fueling growth and liquidity

Our Private Capital Advisory Group and Healthcare & Life Sciences Group advised Allied OMS, a doctor-led and sponsor-backed management services organization for oral and maxillofacial surgery practices, on its first outside financing. The capital allows Allied OMS to fund partnerships with future OMS practices, de novo and satellite office expansion, and practitioner recruitment while providing a dividend to key stakeholders.  

Providing flexibility to expand

Our Private Capital Advisory Group and Consumer Group placed the growth capital financing for PANOS Brands to close the acquisition of the Santa Barbara Smokehouse (SBS). PANOS is a provider of branded consumer foods, while the Santa Barbara Smokehouse is a leading producer of high-quality smoked salmon.  

The financing enables HKW and the management team to continue executing on its growth strategy for PANOS, providing significant flexibility to expand the company's portfolio of brands. This acquisition also accelerates the company's mission of providing premium, authentic, natural, organic, and specialty foods.  

Consolidating control

Baseline Fitness is among the largest Planet Fitness franchises, and in recent years has grown organically and via acquisitions, adding density to its existing markets and strategically entering new markets. Following its acquisition from Freeman Spogli and Co. by Mayfair Capital Partners, Harris Williams helped arrange a secondary equity placement that allowed its new owners to facilitate the seller's exit from the business and achieve greater control over Baseline's long-term growth strategy.   

The infusion of capital also enables Baseline to broaden its reach and better serve its customers by expanding its footprint in existing territories and new markets, taking fuller advantage of the growth potential in the high-value low-price fitness category.  

Funding development capex

Harris Williams facilitated an equity investment supporting Nature Infrastructure Capital's (NIC) acquisition of a 50% stake in German battery storage company ECO STOR, in partnership with Brookfield's portfolio company X-ELIO, via the raising of a single-asset fund.   

ECO STOR is a leading developer and operator of utility-scale battery energy storage system (BESS) projects in Germany, and NIC's investment will finance an advanced development pipeline that will support Germany's energy transition by enabling ECO STOR to become a leading BESS provider.  

Funding add-on acquisitions

Harris Williams advised a continuation vehicle for a highly acquisitive provider of essential infrastructure services. Our team worked closely with the sponsor to provide liquidity to its limited partners while simultaneously securing equity commitments to fund multiple add-on acquisitions on an expedited timeline.  

The Power of Options

As M&A conditions continue to improve in 2025, we expect this growing array of innovative solutions to remain in strong demand among investors. This activity, coupled with more assets coming to market for sale, will enable private equity groups to deploy their substantial stores of dry powder, deliver returns to limited partners, and thus spark interest in new fund investments.  

"Private equity fundraising efforts should be poised to continue the steady acceleration we have seen over the last year," says Laurence Smith, a managing director in the Harris Williams Private Capital Advisory Group. "With LPs receiving increasing distributions from successful exits, CVs, and other forms of liquidity, they are increasingly feeling the confidence to expand their investments in new and existing relationships."

"Our long-term strategy is to support our clients through a growing variety of challenges and opportunities, whether their goal is to deploy capital as conditions improve, exit a great company at optimal value, retain a stake in a high-performing business, or generate liquidity for growth or for investors," says Bob Baltimore, Harris Williams co-CEO. "Our private capital advisory capabilities are essential to that strategy."

To learn more about our range of private capital advisory capabilities and in-depth industry expertise, please contact our senior professionals.  

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