Business Perspectives

Last week, the data analysts at Pitchbook published some interesting dealmaking observations about the B2C sector. They noted the significant, yet relatively steady role private equity firms have played in retail, particularly over the last five years. In that time, the publication credited the investment firm I am Co-CEO of Sun Capital Partners, as one of the most active dealmakers.

Certainly, from our perspective, B2C businesses have proven attractive. It’s a sector that has traditionally responded very well to deep operationally-focused firms, like ours. However the Pitchbook data suggests that steady trend may be slowing this year, with completed private equity transactions behind the normal pace.

Some may wonder whether B2C appetites have changed. From my perspective, it’s not a reflection on the health of the sector, per se, but rather due to high market valuations. The same can probably be written for any number of sectors at the moment. Just because a firm has the operational expertise that could be additive to growing a business, doesn’t mean it’s a wise investment. When we and the seller can agree on the right valuation and price, today, like always, we are prepared to move forward quickly to close the transaction. In fact, our affiliates have completed four B2C business acquisitions so far this year; the most recent being a Midwest based convenience store chain.

Since our founding, affiliates of Sun Capital have completed approximately 100 retail and restaurant transactions, including ten convenience store acquisitions. Businesses such as these play to our operational strengths. Our firm has strong expertise in the convenience store and retail sectors through a number of past and current affiliated portfolio companies. And despite the current trend data showing that B2C investment may have begun a dip downward, this is a sector that we’ll continue to look at.

Marc J. Leder, Co-Chief Executive Officer of Sun Capital Partners, Inc., has been engaged in leveraged buyouts, investment banking, and business operations for more than 25 years. Learn more about him and his work here.