Michael Burgmaier and Nick McCoy have left Silverwood Partners, where they led the consumer products practice for the last six years, to open Whipstitch Capital, a boutique investment bank focusing on the consumer products industry.
The pair have been highly visible and extremely active over the past several years, completing more than 40 transactions. Burgmaier and McCoy are regularly featured speakers across the industry and have issued regular reports on the natural products industry, where many of their deals have taken place. The pair have worked with brands like KeVita, Essentia Water, Brad’s Raw Foods, Blake’s All-Natural Foods and more in recent years.
BevNET had the chance to interview the pair right before they announced the creation of the new firm.
BevNET: There are a lot of consumer product focused investment bankers out there right now; why would an emerging company pick a newly-minted pair like yourselves? Don’t bigger banks have more capabilities?
Whipstitch: Together (we) have over 25 years of combined investment banking experience, have completed over 40 transactions in the consumer sector (almost all food- and beverage-related) and are considered by many to be the most sector-focused, connected and knowledgeable of any of the banks listed. Whipstitch knows how to ask the right questions and go deep – so we can position a company the right way to the right buyer or investor – an essential element to a successful sale or private placement. Larger banks by default mean that work – including contacting buyers and investors, leading material development – gets pushed further and further down the chain. With Whipstitch, Mike and Nick don’t show up at the pitch meeting then disappear; they are there for the duration.
BevNET: Why go out on your own now? What is the difference between this and Silverwood?
Whipstitch: (We) will be the senior banking team working on all transactions at Whipstitch. As Silverwood also has a tech practice, with Whipstitch, clients will benefit from Whipstitch’s ability to have the entire team focus exclusively on the consumer sector all the time. Whipstitch will be able to further develop support resources into sector experts and senior bankers much more quickly.
BevNET: What about the market indicates to you that this is the right time to create a new independent Investment Bank?
Whipstitch: There is currently no independent investment bank solely focused on the innovative consumer sector. We are the ideal team to fill this void. We make the decisions, we lead the practice and we are solely focused.
BevNET: What are the sizes of companies you’re looking to work with?
Whipstitch: With private placement clients, we will look to raise a minimum of $5-10 million from institutional investors but can easily raise $100 million or more. When selling a company, the minimum enterprise value will start at around $15 million, but will generally target nine-digit exit opportunities. Importantly, as an independent firm, Whipstitch will have more flexibility than before to work with smaller companies that are particularly interesting where larger banks struggle to structure such partnerships.
BevNET: How many bankers do you expect to be able to support as an organization over the long term?
Whipstitch: Great question. Whipstitch will never measure its success by the size of its tribe. We will continue to execute as many transactions as possible while providing top tier service to clients and will hire resources as appropriate to accomplish this.
BevNET: What’s your take on the current market? Do you expect deals to increase, decrease, what will indicate which way it goes?
Whipstitch: The current market is robust; it is difficult to predict what will happen in the short term; however, in the long-term, we believe that all of the trends are favorable for at least another 10 to 15 years of consistent growth in the sector as new and emerging [brands] mature into the mainstream.