Dealmaker Insights Reed Smith

In our latest episode of our Private Equity Spotlight series, Reed Smith partner Nick Gibson is joined by Matthew Carlos, a principal at New Water Capital, for a deep dive into the unique aspects of Lower Middle Market Private Equity.
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Transcript: 
Intro: Hello, and welcome to Dealmaker Insights, a podcast brought to you by Reed Smith's corporate and finance lawyers from around the globe. In this podcast series, we explore the various legal and financial issues impacting your deals. Should you have any questions on any of the content, please contact our speakers.
Nick: Welcome back to Dealmaker Insights, the Reed Smith podcast series spotlighting the private equity industry. I'm Nick Gibson, a private equity M&A partner in the Chicago office of Reed Smith, and I'm excited to welcome Matt Carlos of New Water Capital as our guest today. I've really enjoyed getting to know Matt and his team who have focused and thrived in the lower middle market. Matt wears a lot of hats at New Water Capital, and that's one of the topics we'll dig into a bit today. But first, I'll turn it over to Matt and let him introduce himself and New Water Capital. Great to have you here, Matt.
Matt: Thanks, Nick. Appreciate you having me and happy to chat through the latest and greatest of New Water here. So I can dive right into a quick background on myself and on New Water. So I'm a principal here at New Water Capital. Been with the guys now for over seven years. Joined back in January of 2017. The fund officially started in 2016 and was originally a spin out of Sun Capital Partners. So Jason and Brian spent around a decade together at Sun. Saw Sun grow from a few hundred million under management, multiples of billions. I'm sure as as you know. And the rationale or the reason to spin out and do their own thing, create New Water, was to refocus on the lower middle market. And we've incrementally refined that for us to be really focused on what we call blue-collar industries. So manufacturing, industrial services, packaging, distribution. That really covers the majority of what we're focused on. From an end market perspective, we're a bit more agnostic. So if you look at in our portfolio. It's food and beverage, it's industrial technology, auto, packaging, you name it. And so we do tend to be more operationally focused and much more opportunistic. So we've got an in-house ops team, ex-CEO, CFO, COO type folks who work exclusively for New Water, so not consultants on hired guns. And so they are invaluable in dropping into our portfolio companies and help them think through next steps. So there's just creating KPIs, budgeting, walking the shop floor, look at efficiencies, and or just being a shoulder to cry on, quite frankly, as we go through growing pains or integration. And so really a valuable part of the team, but it helps kind of differentiate what New Water does in the market, which is really focused on where we can help portcos grow, improve, and. Get to the next level.
Nick: That's great. Can you talk about the various hats that you wear in your role particularly, and maybe how that differs in approach from other private equity firms?
Matt: Sure. Yeah, we are a lean team. And so because of that, like you mentioned earlier, we do wear a lot of hats. First and foremost, I think other private equity funds that are our size and focus in our industries, I think it's very typical for those firms or a lot of our brethren these days to have a designated business development arm. We at New Water do not at the moment. I think at some point in the future, hopefully we will be large enough to where it's needed. But at the moment, we don't. And so what that means is that myself and the other folks on the deal team here, we will kind of pass the hat or pull straws to just do the best we can to attend as many events and conferences, to be doing city visits visits, and meeting with intermediaries and bankers and lenders as much as we c

In this episode of our Private Equity Spotlight series, life sciences and healthcare partners Carol Loepere and Nicole Aiken-Shaban discuss the new state laws requiring notices and consent from state regulatory authorities prior to completing healthcare transactions.
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Transcript: 
Intro: Hello and welcome to Dealmaker Insights, a podcast brought to you by Reed Smith's corporate and finance lawyers from around the globe. In this podcast series, we explore the various legal and financial issues impacting your deals. Should you have any questions on any of the content please contact our speakers.
Carol: Welcome back to Dealmaker Insights. I'm Carol Loepere, a partner in Reed Smith's Healthcare and Life Sciences Group and I'm joined today with my partner Nicole Aiken-Shaban. We both help companies navigate regulatory considerations for deals in the health care space. Today, we're discussing recent enactment of state laws requiring notice and in some cases approval from state regulatory authorities prior to completing a health care transaction. These are notable as they are separate from long-standing laws regarding changes of ownership or CHOWS as they're often referred to at the state level, governing state licensure and certificate of need. And also they're different from federal laws governing health care transactions such as Hart- Scott-Redo and Medicare, Nicole. Why are we seeing these laws? What are they designed to achieve?
Nicole: That's a great question, Carol. There are a number of different motivations and some states are focused on local concerns as a group. However, these laws broadly are meant to address a perceived gap in oversight for the majority of health care providers within a state that have not historically been subject to more intense certificate of need and or licensure processes. Uh think about hospitals and other hospices or entities like that. In that latter bucket, one question I have asked myself is why now as our listeners likely know, health care is a priority at the federal level right now with increased scrutiny on antitrust and anti competitive enforcement efforts, there's also a related effort to target private equity investment specifically in health care, both by federal agencies, Congress and also the press. Not surprisingly, that focus has trickled down to state legislative action when you take that focus and combine it with the proliferation of nontraditional providers that occurred during the pandemic. Just a couple of years ago, a number of states have started to look to exert more oversight over the provision of health care and who's providing it in their borders. Carol, what is a snapshot of the current landscape of these laws?
Carol: As of April 2024 there are 14 states with health care transaction notice and or approval requirements. Some of these have been on the books a long time while others are brand new and some are just taking effect later this year. One of them is Indiana and we'll talk a little bit about that later. Importantly, though there is legislation pending in several other states including California, for example. So it's very important to check state law as well as pending legislation and regulations that are implementing these laws as you consider health care transactions in various states. Before we discuss a couple of examples of these laws, Nicole, are there certain characteristics or themes that people should keep in mind in reviewing these laws?
Nicole: Yes, I know we are both a fan of lists and for our listeners, I've put together three key points to keep in mind when assessing these laws. First, they are very fact dependent. Many laws have threshold limits that define material transactions or the types of transactions and affiliations subject to the laws. They have varied effective dates, sometimes different effective dates within the same state based on the type of transaction. And there is specific language in those laws on their a

With the recent explosion of antitrust developments in the United States, members of our Corporate and Antitrust & Competition teams have come together to produce a three-part series that discusses the practical impact of these developments for our clients. In this third and final episode, Reed Smith partners Anatoliy Rozental and Ed Schwartz team up to talk about merger planning during these times of uncertainty.
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Transcript:
Intro: Hello and welcome to Dealmaker Insights, a podcast brought to you by Reed Smith's corporate and finance lawyers from around the globe. In this podcast series, we explore the various legal and financial issues impacting your deals. Should you have any questions on any of the content please contact our speakers.
Anatoliy: Hi, everyone and welcome back to Reed Smith's podcast series, Dealmaker Insights. I'm Anatoliy Rozental, Private Equity M&A partner based in our New York office. With the explosion of developments in the U.S. antitrust space. I’ve teamed up with our antitrust and competition team to chair a three part series where we will be discussing the practical impact of recent developments and key priorities for our clients. Our third and final episode, I'm honored to be joined by my partner Ed Schwartz, who was a member of the global antitrust competition team and who is at the forefront of some of these antitrust battles. Ed, thank you so much for joining me today.
Ed: It's a pleasure to be with you today. Anatoliy.
Anatoliy: Thank you, Ed. So let's dive right in. We've all heard and read so much about the changes in antitrust enforcement under President Biden, especially when it comes to mergers. We've also heard that these changes have made it more difficult to get deals through both the DOJ and the FTC. So do merging parties really need to approach the merger enforcement process differently today than they did even four years ago?
Ed: I think they do Anatoliy. Look, we all know that President Biden came into office with a mandate which I think can more accurately be described as a dictate from the progressive wing of the Democratic party to bolster antitrust enforcement, especially with regard to mergers and beginning with the appointment of Lina Khan to chair the FTC and the appointment of Jonathan Kanter at the antitrust division. We've seen the White House act on that mandate. And each of them Khan and Kanter has implemented changes at their respective agencies that have made getting many deals through the agencies more challenging. Now, the good news is that we have not seen a dramatic increase in the number of cases being investigated through a second request or being challenged in court. And that was expected by many of us. We've seen fewer in fact, particularly at the FTC. And there are a lot of reasons for that, that I don't really have time to get into, but still for parties who are trying to navigate the merger enforcement process deals that potentially raise anti-competitive concerns. And I'm talking about deals where there is a significant horizontal overlap between the parties or maybe because it's a vertical transaction which could be seen as potentially threatening to rivals of either the buyer or the seller. These parties do need to adjust their strategies for dealing with the antitrust agencies to adapt to the changes that we've seen.
Anatoliy: So, what do you think are the biggest changes in merger enforcement that you've witnessed that are impacting parties today? They're trying to navigate the merger enforcement process?
Ed: Well, it's a lot, but maybe I can speak first in broad strokes. Uh I think the changes made by the agencies fall into three broad categories. First, the agencies have broadened the scope of deals that the agencies consider to be potentially anti-competitive. Second, they've implemented changes that couldn't make getting a deal through more difficult and take longer if the agency decides to investigate. And three, th

With the recent explosion of antitrust developments in the United States, members of our Corporate and Antitrust & Competition teams have come together to produce a three-part series that discusses the practical impact of these developments for our clients. In this episode, Reed Smith partners Anatoliy Rozental and Chris Brennan discuss new U.S. merger guidelines.
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Transcript:
Intro: Hello, welcome to Dealmaker Insights, a podcast brought to you by Reed Smith's corporate and finance lawyers from around the globe. In this podcast series, we explore the various legal and financial issues impacting your deals. Should you have any questions on any of the content through this series, please contact our speakers. 
Anatoliy: Hi, everyone and welcome back to Reed Smith's podcast series, Dealmaker Insights. I'm Anatoliy Rosental, private equity and M&A partner based in our New York office with the explosion of developments in the US antitrust space. I've teamed up with some of our antitrust and competition team to chair a three-part series where we'll be discussing the practical impact of recent developments and key priorities for some of our clients. For our second episode, I'm joined by Chris Brennan, who is a partner in Reed Smith's global antitrust  and competition team and whose practice is at the forefront of these antitrust battles. Chris, thank you so much for joining me today. 
Chris: Thanks, Anatoliy. Always good to work with you and especially for today's discussion which focuses on a major development on how our clients evaluate and plan for merger clearance issues in the US. 
Anatoliy: So let's, let's jump right in. You know, this episode is focused on the US Department of Justice and the Federal Trade Commission's 2023 merger guidelines. So to start at the beginning for our listeners who may not be familiar with the history, you know, I understand that the first guidelines were issued way back in 1968 and there have been several iterations since then. The 2023 guidelines consolidate, revise, replace the various versions of the merger guidelines issued by the FTC and DOJ. And can you give us a brief background of what these guidelines represent? 
Chris: So, the stated purpose of these guidelines is to help the public business leaders, practitioners that would be you and I and courts understand how the agencies consider certain issues when investigating mergers. The ideas is that they reflect the agency's current approach to merger enforcement and provide you and me and the larger community insights into how those mergers are going to be analyzed at least for the current agency leadership. And just so we're all on the same page. US law requires companies to file a notification that's known as an HSR filing to the FTC and DOJ for a proposed merger that at least for this year in 2024 is valued at or above 119.5 million. Once that filing is submitted, the agencies have 30 days to decide if they want to further investigate and potentially challenge the merger and critically the parties cannot close the deal while that process is playing out. So while these guidelines are non binding, you should think of them as the playbook for DOJ and FTC personnel that review those filings and that playbook is how agency leadership expects them to analyze a merger during the 30 day review period, and whether to let that deal close or to pump the brakes and investigate further. 
Anatoliy: Got it. So are the 2023 guidelines, another incremental change or is this something more groundbreaking? 
Chris: So it's definitely groundbreaking, but potentially not in the normal sense of that phrase. The agencies have touted these guidelines as necessary to address quote unquote the modern economy. Yet many of the legal authorities that the agencies rely on for significant changes in these guidelines are based on pre 1980’s case law and many of those authorities have been ignored or rejected by courts over the last 40 years

In our latest Private Equity Spotlight series, Brian Murchie, senior client development advisor at Reed Smith, is joined by Rush Harvey, Director, Private Capital Advisory at Raymond James, to discuss the unique perspective Rush and his team bring to the market, and the state of the fundraising and secondary markets.
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Transcript: 
Intro: Hello, welcome to Dealmaker Insights, a podcast brought to you by Reed Smith's corporate and finance lawyers from around the globe. In this podcast series, we explore the various legal and financial issues impacting your deals. Should you have any questions on any of the content through this series please contact our speakers.
Brian: Welcome back to Dealmaker Insights. Excited with the new series spotlighting the private equity industry. My name is Brian Murchie. I'm the Client Development Advisor at Reed Smith. My personal background is I started out at Platinum Equity on the business development team for seven years. From there, I moved into in an investment banking role. I was with Stifel in a West Coast sponsored coverage role. And then from there, I moved over to Raymond James also as a managing director in a sponsor coverage role and excited for Rush Harvey, who's a good friend of mine and a, and a, and a former colleague at Raymond James, who's in a private capital advisory side. I think he brings a very unique perspective given where he sits in the market and the state of the market. So welcome rush and excited to have you on here How are you doing,
Rush: Brian I'm doing awesome. Thanks so much for having me today.
Brian: Great. I think you bring a very interesting perspective. Rush just given your background and kind of where you sit in the market. Could you discuss your transition from being a former LP to to the private capital advisory side?
Rush: Sure, thanks Brian. It's been a journey that's for sure. I was a limited partner my entire career up to joining Raymond James on the private capital advisory side about two years ago, most recently managing the endowment with the team at Kansas State University Foundation and then at the Texas A & M University Foundation. So go cats and gig em’  Aggies. And it's been a great transition to the private capital advisory side to bring an LP perspective to how we do business, how we serve our clients and ultimately how we try to be a source of relevant deal flow to limited partners.
Brian: and Rush I, I did notice you have a recent article out there that you published. Uh could you kind of  discuss that? Like I know it discusses, you know, your background and kind of your entrance into the private capital advisory space. But if there's anything there you could touch on, it would be helpful.
Rush: Yeah. Happy to Brian and, and thank you for reading. I appreciate that. The title of the article is Reflections From the middle seat. So in, in the current role we are serving GPs, sponsors and also limited partners, LPs. And so we want to be as helpful as possible to both. And, you know, sitting in the middle seat on the airplane usually isn't the most fun, depending on who you sit next to. But in the current role, I'm having tons of fun because the market needs support in regards to fundraising. It's such a tough fundraising market right now. So GPS need a partner to help them navigate and we're trying to be a good partner in the market. But limited partners, they need good deals and they wanna work with folks, they trust and you gotta earn their trust. So sitting in between LPs and GPs, I have a pretty unique perspective. You know, being an LP understanding the hard work it takes to execute a process to get a deal done, to find the right partner to help you serve your institution, to enhance your mission. For me at two public land grant university cities. The mission was so important, thinking about those kids that we served and the scholarship dollars we tried to generate and making those private capital commitmen

With the recent explosion of antitrust developments in the United States, members of our Corporate and Antitrust & Competition teams have come together to produce a three-part series that discusses the impact of these developments for our clients. In this first episode, Anatoliy Rozental, a private equity partner in the firm’s Global Corporate Group, is joined by Michelle Mantine, chair of our global Antitrust & Competition team, to talk about recent developments at the intersection of private equity and antitrust law.
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Transcript:
Intro: Hello, welcome to Dealmaker Insights, a podcast brought to you by Reed Smith's corporate and finance lawyers from around the globe. In this podcast series, we explore the various legal and financial issues impacting your deals. Should you have any questions on any of the content through this series please contact our speakers. 
Anatoliy: Hi, everyone and welcome back to Dealmaker Insights. I'm Anatoliy Rozental, private equity and M&A partner based in our New York office uh with the explosion of developments in the US Antitrust space. I've teamed up with our antitrust and competition team to chair a three part series where we'll be discussing the practical impact of recent developments and key priorities for our clients. For our first episode, I honored to be joined by my partner Michelle Mantine, who chairs our global antitrust and competition team and who is at the forefront of some of these antitrust models. So, let's dig right in, we are here to talk about recent developments at the intersection of private equity and antitrust law. What is happening that makes this conversation so important? 
Michelle: Well, this month alone, the federal agencies that enforce the antitrust laws signaled an intensified look into the purported financialization of health care markets. Citing concerns regarding health care consolidation and private equities role in the marketplace. Specifically on March 5th, regulators hosted a public workshop, private capital, public Impact an FTC workshop on private equity and health care. And during that workshop, the agencies announced a cross government inquiry into the impact of private equity investment and other forms of what they refer to as corporate greed in the health care sector. Speakers from the agencies touted enforcers recent enhanced scrutinizing of private equity firms and their involvement in health care. The workshop featured remarks from agency officials as well as panels of economists, academics and health care workers. Now across the board, the speakers denounced private equity’s role in health care leaving little room for discussion of the possible benefits, clinical or otherwise of private capital investments in the health care market. Now that very same day, just before that workshop began, the agencies issued a request for information or RFI looking for information regarding consolidation in health care markets. Again, citing concerns that acquisitions in this space may generate profits for private equity firms at the expense of patient care and worker safety. As the Federal Trade Commission's chair, Lina Khan, expressly noted private equity companies should be on notice of these efforts by the antitrust agencies specifically that the agencies are on the lookout for strategies and things that they see that could be problematic under the antitrust laws. They're focused on, in their words, protecting the American public from anti competitive and unlawful tactics. 
Anatoliy: Certainly worrying for some of my um private equity clients in this space, aside from Lina Khan and the FTC, what other agencies are involved and how are they going to work together to, to regulate private equity firms? 
Michelle: Yeah, beyond Lina Khan and the FTC, the antitrust division of the Department of Justice, the DOJ is really uh sort of alongside the FTC spearheading this effort. Now, both of those agencies, the FTC and DOJ are in char