Venable Closes Two Mezzanine Investments

3 min

BALTIMORE, MD (August 25, 2003) – Two mezzanine financings totaling $7.8 million have been closed by a team of attorneys led by Charles Morton at Venable LLP, part of transactions valued at over $22 million.

“The mezzanine financings were the critical element in completing the transactions,” said Mr. Morton, a partner in Venable’s Mergers and Acquisitions and Business Transactions practices. “In each case, we had to close gaps between what the senior lenders were willing to offer and what the companies were able to raise from their equity investors; we were able to fill those gaps with the mezzanine debt.”

In the first deal, Venable represented a consortium of investment funds in a $6.3 million mezzanine financing for Tennessee-based Praxis Acquisition Co., LLC. The funds were provided by Spring Capital Partners, a leading mid-Atlantic-based mezzanine financing company, along with HSBC Capital (USA) Inc. (a New York-based investment bank affiliated with one of the world’s largest financial institutions), Ironbridge Mezzanine Fund, L.P. of Avon, CT and Summer Street Capital Fund I, L.P. from Buffalo, NY and Longmeadow, MA.

Besides Mr. Morton, partners Neal Strum and Brian O’Connor, along with associates John Ramirez and Vasilios Peros, were involved over the past several months in negotiating and finalizing the agreement.

“We were extremely pleased that Venable was able to help us quickly close this complicated, multi-faceted deal, which involved an unusually large syndicate of geographically-dispersed lenders,” said John C. Acker, Principal of Spring Capital Partners. “It was also helpful to be able to work with exceptional counsel that has a national practice in business transactions, yet is based in the Baltimore area,” he added.

In the second of the two deals, Venable represented TRF Urban Growth Partners, L.P. in a $1.5 million mezzanine investment in Baltimore Dredge Enterprises, LLC, a Baltimore-based dredging company. TRF is a Philadelphia-based company, and this investment was its first south of Philadelphia. Mr. Morton was assisted by Mr. Peros in negotiating and finalizing the terms of the agreement.

“Market conditions are such that in the near term we anticipate a proliferation of these types of financings, ranging in general from $3 to $30 million,” said Mr. Morton. “These mid-market deals are an important engine of growth for well-positioned companies that are moving up in the world. For the companies, the debt is less expensive than giving away equity, and for the lenders, it’s a less risky proposition than funding a start-up venture.”

Mr. Morton was recently recognized as “one of the best lawyers in Baltimore when it comes to advising entrepreneurial firms” by theBaltimore Business Journal. He is a professor in the MBA program at Johns Hopkins University, Vice President of the Maryland Chapter of the Association for Corporate Growth, and a member of the advisory Board of the Small Business Development Centers of Maryland. He is the immediate past chair of the Intellectual Property Committee of the American Bar Association’s Torts and Insurance Practice Section, and works with small, growing businesses and larger established companies across the country.

One of the American Lawyer’s top 100 law firms, Venable LLP has attorneys practicing in all areas of corporate and business law, complex litigation, intellectual property and government affairs. Venable serves corporate, institutional, governmental, nonprofit and individual clients throughout the U.S. and around the world from its headquarters in Washington, D.C. and offices in California, Maryland, New York and Virginia.