FirePower Capital Enters Growing Private Debt Space
Entrepreneurial Investment Bank Launches Private Debt-focused Asset Management Division
FirePower Capital Corporation, Canada’s leading entrepreneurial investment bank, has launched a new, first-of-its-kind asset management arm that will exclusively provide debt financing to lower mid-market Canadian businesses.
The FirePower Private Capital Division, a specialist ‘Gap Debt’ lender, aims to assist lower mid-market Canadian businesses searching for capital to continue to grow.
“Canadian entrepreneurs just do not get their due in this country,” commented FirePower’s founder and Chief Executive Officer Ilan Jacobson. “Quite simply, businesses here do not have access to what their U.S. counterparts do in terms of next-stage, growth financing, which is stifling innovation and giving Canadian entrepreneurs a bad rap.”
With backing from FirePower principals, outside investors and a strategic partnership with a US-based private investment firm, the new division has access to over $100m in capital to be applied primarily for loan sizes between $0.5m to $5m.
Having overseen more than $300m in transactions across a variety of sectors and industries, FirePower recognized the need for a different approach that allows companies access to additional financing in ways that account for their enterprise value and what their prospects are, noted Jacobson.
“In the lower-mid market, lenders generally are not capable of providing the same level of service and due diligence that they provide for larger transactions, as its not economically viable,” noted Jared Kalish, co-founder and head of Firepower Private Capital Division. “As a result, smaller transactions are often assessed using a ‘check-the-box’ approach, which relies on tangible assets rather than focusing on cash flow and enterprise value.”
“With our background, expertise, and technology, we will be literally filling the gap in providing financing options to the lower mid-market, hence the term Gap Debt,” added Jacobson. “There is a strong need in this country for businesses that don’t necessarily have tangible assets but do have strong cash flow and enterprise value and solid growth prospects to be able to get financing to grow and innovate. We plan to fill that gap.”
Decisive Technologies is a value-added reseller of IT hardware, and BriteSky Technologies is a Canadian, managed cloud services provider (collectively “Decisive”). Decisive needed additional capital to accelerate its expansion plans. The shareholders were adamant that a new institutional partner should share their values and vision for the company, and FirePower was engaged to find an acquirer for a majority stake and negotiate a deal structure that met all of the shareholders’ objectives.