Principal Investments

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Creative investment solutions backed by our operational and financial expertise

Our experienced professionals have deep investment and operational expertise with the ability to leverage the resources across our platform in order to identify attractive investment opportunities and deliver financial and operational improvement. Our team develops creative solutions for distressed companies or divisions that exhibit challenging market dynamics. Solutions may include recapitalization, direct equity investment, debt investment, active minority investment and buyouts.

We apply a private equity approach to investing and operating businesses, which drives cash generation and allows us to leverage our small- and mid-cap industry experience and deal flow.

Our unique access to the firm's infrastructure, capital and close relationships with lenders and other financial institutions enable us to have a wide field of view on investment opportunities, thus providing us the ability to self-source proprietary opportunities. We seek to control or influence the operations of our investments to deliver financial and operational improvements that will maximize free cash flow, and therefore, shareholder returns.

Our team has the ability to address a broad variety of transaction types ranging from solutions for clients looking for capital or more efficient back-office operations to public corporations looking to maximize shareholder value or release non-core assets.

Investment Criteria

  • $5-$100MM+ investment size
  • Strong potential for growth of stable, recurring free cash flow
  • Specialize in distressed, orphaned and contrarian situations
  • Ability to control or influence operations of target
  • Partner with key stakeholders and management teams to maximize value
  • Focus on value through synergies in organizational structure and operations
  • Strategic add-on investments for existing portfolio companies
  • Board representation

Transaction Types

  • Buyout and control investments
  • Direct equity & debt investments
  • Special situations
  • Activist situations
  • Liquidation opportunities
  • Corporate divestitures & carve-outs
  • Recapitalization
  • Distressed & turnarounds

Equity Investments

  • Signed a definitive merger agreement between B. Riley Principal Merger Corp's 3rd principal SPAC and FaZe Clan. The transaction is expected to close in Q2 2022.
  • Provided M&A financing for The Arena Group Holdings (AREN), formerly theMaven, to facilitate their acquisition of theStreet.com and a license to operate Sports Illustrated's media business. In addition, B. Riley purchased a sizeable minority position in the equity and took two board seats, helping the company uplist to the NYSE in January 2022.
  • Led $150M financing for global supplier of energy and environmental technologies and services, Babcock & Wilcox, Inc. [BW], in April 2019 to allow company to exit legacy contracts and focus on growing their core business. During 2021, B. Riley served as lead book-running manager for Babcock Wilcox Enterprises, Inc.'s common stock transaction (ticker BW), led two senior notes transactions and a preferred stock transaction. Currently, B. Riley owns approximately 30% of the company's common shares and has one board seat. The share price is $7.21* compared to $3.50 at the end of 2020.
  • Established an SPV alongside Exela Technologies Inc. (XELA) to catalyze a global restructuring of the company's capital structure in November 2021.
  • In September 2021, B. Riley Securities acted as the sole bookrunner in the $114 million IPO of DoubleDown Interactive (DDI) with shares priced at $18.00 per American Depository Share (ADS). Demonstrating meaningful support of its client, B. Riley Financial announced just 11 days later, it would commence a cash tender offer to acquire 2,000,000 ADS of DDI at the original IPO price of $18.00 per ADS.
  • Provided a refinancing solution in June 2021 for Cadiz Inc. (CDZI), a publicly held natural resources company that owns 70 square miles of property and water resources in Southern California.
  • Led and backstopped a refinancing of the full capital structure of Synchronoss (SNCR) in June 2021. B. Riley currently owns approximately 15% of the Company and has a board seat.
  • Took EOS Energy Enterprises, Inc. (EOSE) public in November 2020 via a B. Riley-sponsored SPAC, and currently owns approximately 10% of the company with two board seats.
  • Took Alta Equipment Group Inc. (ALTG) public in February 2020 via a B. Riley-sponsored SPAC and currently owns approximately 16% of the company with one board seat.
  • Led multiple equity and debt transactions for Global Ship Lease (GSL), as shares have increased from approximately $6 per share 3 years ago to $26* per share.
  • Acquired debt of global Cloud/UC and managed service provider Lingo of Kentucky and Tempo Telecom.
  • Established fashion brand portfolio, Brand Investment Portfolio, in partnership with Bluestar Alliance in October 2019 to hold majority ownership of assets and intellectual property related to licenses of six brands. Participated in investment in Bluestar Alliance's acquisitions of the Hurley and Justice brands.
  • Acquired significant ownership stake in data storage company, Quantum Corporation [QMCO], in 4Q 2018.
  • Acquired VoIP cloud-based communications company, magicJack Vocaltec, in November 2018, offering potential operational synergies with United Online.
  • Provided debt capital to manufacturer and distributor of decorating and celebration products, Signature Brands, in October 2018.
  • Acquired significant ownership stake in franchise platform company, Franchise Group, Inc. [FRG], in July 2018. Advised on and financed multiple M&A transactions, as shares have increased from approximately $11 per share to $43* per share.
  • Acquired significant ownership stake of retailer, bebe stores, inc. [BEBE], in January 2018 and assisted in bebe's transformation to online-only retailer.
  • Acquired United Online, holding company of internet access and services providers NetZero and Juno, in July 2016.

*as of 2/28/22.

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Specialty Lending

Our team is dedicated to providing opportunistic and responsive capital to the underserved middle market. We originate and underwrite senior secured to asset-rich companies across a wide array of industries by leveraging our deep in-house asset valuation expertise to deliver capital solutions that traditional lenders are typically unable to provide. Our customized solutions support a range of growth, refinancing, recapitalization and restructuring needs.

Investment Strategy

We leverage significant in-house asset valuation expertise to gain meaningful insight into collateral values: this singular perspective on real-time market trends and values enables us to extend beyond standard structures to assign value to traditional and non-traditional assets that other lenders are generally unwilling to finance. Our typical transaction ranges from $10 million to $100 million, with the ability to underwrite larger transactions.

We work collaboratively with management teams to develop optimal credit solutions and often work in partnership with institutional investors, such as commercial and regional banks, private equity funds and family offices to deliver comprehensive, creative solutions tailored to each company's unique situation.

Transaction Types

Our customized capital solutions support healthy and distressed companies by providing an alternative source of capital to meet a wide range of near-and long-term objectives:

  • Working capital
  • Corporate acquisitions
  • Recapitalizations
  • Growth capital
  • Refinancing
  • Restructuring/turnarounds

Transaction Structures

We provide secured debt financing in various forms:

  • 1st and 2nd lien secured loans
  • Unitranche loans
  • Debtor-in-possession (DIP) financing
  • FILO (first in last out) loans
  • Bridge facilities
  • Hybrid/cash flow loans