How Private Equity Firms Differentiate Themselves In A Crowded Market

By Author: Amit kothiyal
Total Articles: 287
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There are many estimates of the number of US-based private equity firms, with most pointing to a range of 4,000-5,000.  Given the large number of firms seeking to make investments, how do private equity firms differentiate themselves to investment bankers who are representing companies for sale and to the selling companies themselves?  Bertram Capital, a private equity firm based in the California Bay Area, led by Jeff Drazan, Managing Partner, has taken a proactive approach to differentiating themselves as more than just a capital provider.

Bertram Capital focuses on investing in businesses with $5-30 million in EBITDA, a particularly competitive sector of the private equity marketplace.  In order to differentiate the firm, Jeff Drazan and the team at Bertram Capital developed a unique approach to the investment process, highlighted by the following:

Certainty of Close: Bertram Capital has a captive debt facility and is not dependant on third- party financing, positioning the firm to close transactions with a high degree of certainty.

Close Transactions Quickly: ...
... Bertram Capital has been successful in closing the majority of their transactions within 45 days of signing a letter of intent.

Operate Like a Strategic Buyer: Bertram's buy and build approach lends itself to fuller valuations for platform investments, as they focus on generating returns through operational excellence, not financial engineering.

Don't Re-trade: All transactions Bertram has completed have been at or above their initial indication of value.

Bertram Capital has received numerous accolades from investment bankers who sold companies to the firm, clearly showing that their approach to differentiating themselves is working just as Jeff Drazan and his team planned.

According to Jonathan Morphett, Managing Director - Investment Banking at AvondalePartners LLC, who managed the sale of PMG Partners (now GENASCIS) to Bertram,"Bertram Capital was very professional and a pleasure to work with throughout thetransaction process…they put the highest bid on the table, stood behind their numberwith a term sheet that contained no financing contingencies and closed the transactionwithin 30 days of signing the LOI.  They did what they said they would do."

Frederic (Ted) H. Garner, Managing Director at Edgeview Partners who managed the sale of Power Distribution, Inc. to Bertram Capital said, "We were impressed withBertram's ability to move quickly and efficiently through their diligence process. Theyminimized the burdens required on their future partners, the management team, whilebeing thorough in their diligence work product. Additionally, they minimized the risk tothe sellers of closing the transaction by taking financing contingencies off the table.Ultimately, the Bertram team followed through on their initial terms of engagement tocomplete a highly successful transaction for Bertram, the selling shareholders and themanagement team. We look forward to working with the firm on future engagements."

Timothy P. Johnson, Managing Director at England & Company, LLC, who managedthe sale of Marelco Power Systems, Inc. to Bertram Capital had the following to sayabout working with Bertram: "Our client was very sensitive about confidentiality andinsistent that the sale process be quick and cause little disruption to their business. Bertram Capital was extremely professional, knowledgeable and efficient throughoutthe process and was able to close the transaction within 45 days of signing the LOI. Itwas a pleasure working with the Bertram team on the Marelco transaction and we lookforward to working with them on future deals."

With glowing reviews like these from well respected investment bankers, Bertram appears to have found a way to truly differentiate themselves from their private equity peers.  As competition for deals increases, with aggressive strategic buyers andhungry private equity firms, Bertram Capital and firms like them, will need to continue toinnovate to ensure their long-term success.
Author is a financial expert and likes to research and share success stories and news in financial space. The story covers how private equity firms like Bertram Capital led by Jeff Drazan has taken a proactive approach to differentiate themselves from other private equity firms in the capital market. For more details visit Bertramcapital.com .