Veronis Suhler Stevenson, a merchant bank, is looking at minority investments in direct media, advertising, cable television, consumer magazines, newspapers and radio with a fund it created this year.
The VSS Mezzanine Partners LP fund provides mezzanine capital for financing acquisitions, management buyouts, going-private transactions, growth equity investments and recapitalizations. It differs from other VSS funds by making minority investments in companies and not taking a controlling interest.
“We saw the opportunity beginning a few years ago to form this mezzanine fund to capitalize on what we view as non-control investing, where we wouldn't necessarily take control of the company,” said George L. Cole, co-manager of the fund.
The fund would be an option for small to midsize media and marketing concerns with strong track records, including family-owned businesses looking to expand through acquisition or organic growth, Cole said.
Though it also will evaluate turn-around situations or distressed operations, the fund's focus is on stable companies with recurring cash flow. Target companies typically are characterized by trailing EBITDA of $5 million or more.
Typical transactions are expected to range from $10 million to $75 million. Cole said that though a few investments are being considered, none have closed.