Middle Market Division - Overview

Our “middle market” division services businesses valued $1 million to $300 million in value.  Our “small market” division generally handles businesses less than $1 million in value. 

While our middle market division is not legally a separate entity, the procedures and processes we employ can be significantly different from those applied in our small market division.  The time required by our intermediaries to effect a transaction may be 5-20 times greater for a middle market transaction, up to 500-1,000 hours.

Only our most experienced and proven intermediaries assist our middle market division client. In addition, have we established relationships with several of the leading mainland based middle market intermediaries to provide investment banking services to larger Hawaii companies. These firms have offices located in major cities throughout the mainland and in international markets, and handle transactions in virtually every industry imaginable, and some in fact are industry specialists. These firms focus on businesses with enterprise values exceeding $5-10 million dollars, and up to $300 million in value.

Most mainland based brokers and intermediaries understand very little about Hawaii’s unique business environment, don’t have any connections or presence here, and their buyer contacts generally have no interest in Hawaii’s market, which they perceive as small and isolated. So they are ill positioned to sell Hawaii firms on their own. However, by partnering with such firms, we add their mainland connections and expertise in larger transactions to our local resources and knowledge to deliver superior investing banking services to middle market Hawaii businesses.

Whether a business is more appropriate served by our middle vs. small market division is not a black and white question, and it is not based only on value.  A variety of other factors are considered, including:

• Likely and/or targeted buyers or sellers are “strategic” (in client’s industry), which greatly increases the risk associated with a confidentiality breach and the complexity of negotiations and valuation (due to potential synergies)
• Annual revenues of the business (> $10 million is generally middle market) and/or number of employees (> 20 typically)
• Depth and complexity of technology, intellectual property and skills required to operate the business.
• Probability that any transaction will be effected as a securities transaction and/or will involve a sale of only a portion of the company’s equity or assets
• The objective is to raise equity or obtain debt financing.

A partial sample of the important differences between the middle and small markets transactions and processes are summarized in the table below.

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