Founded in 2008, SILICON operates in the US, UK, Japan, Australia, New Zealand, and Malaysia, and is trusted by corporations across Europe, Japan, Australia, and the US. The company specializes in sourcing hard-to-find materials, including:

• Rare earths
• High-purity oxides, fluorides, and specialist chemicals
• Specialty metals
• Advanced materials and semiconductor inputs

Through the partnership, SILICON and KLEAR support high-consequence supply chains by aligning operational sourcing with financial execution, helping clients manage complexity, mitigate geopolitical risk, and maintain continuity across global operations.

Under the partnership, clients benefit from:

• End-to-end visibility across sourcing, funding, and delivery
• Access to verified global supply options, including pricing, lead times, and alternative jurisdictions
• Secure and confidential procurement structures, including importer of record services
• Managed execution across procurement, logistics, and risk
• Transparent, cost-based sourcing fees

The partnership is expected to support more than $100 million in new contracts in 2026, representing a growth trajectory exceeding 225 percent compound annual growth for SILICON.

Chris Hale, Chief Executive Officer of KLEAR, commented:

“The partnership with SILICON brings together operational sourcing and capital intelligence in a way that directly addresses the challenges facing critical minerals supply chains. Clients gain clarity, confidence, and control across both execution and finance.”

Reece Adnams, Chief Executive Officer of Eaton Square, added:

“This partnership strengthens SILICON’s ability to support multinational clients operating in complex, high-risk supply environments. By integrating sourcing and finance, we are enabling more resilient, predictable, and accountable supply chains.”

How the Partnership Works

Clients provide specifications for required critical minerals or advanced materials. SILICON identifies verified global supply options, presenting pricing, lead times, and alternative sourcing locations. In parallel, KLEAR structures the appropriate payment and finance strategy to support execution. Eaton Square manages procurement, confidentiality requirements, logistics coordination, and delivery, applying a transparent sourcing fee based on product cost.

Supporting Energy Infrastructure and Advanced Manufacturing

Critical minerals are central to energy infrastructure, advanced manufacturing, and national security. The SILICON and KLEAR partnership is designed to address supply concentration, geopolitical exposure, and execution risk by providing integrated operational and financial oversight across high-value supply chains.

A senior European supply chain and energy infrastructure partner at Deloitte noted that platforms integrating sourcing execution with intelligence-driven finance are increasingly critical to maintaining resilience and agility in global supply chains.

Global Operations and Expansion

SILICON operates across the United States, United Kingdom, Europe, Japan, Australia, New Zealand, and Southeast Asia, supporting multinational clients across energy, industrial, and advanced manufacturing sectors. The partnership with KLEAR further strengthens SILICON’s platform as it expands its presence in Europe and continues to support globally distributed supply chains.

About SILICON

SILICON is Eaton Square’s global sourcing platform, supporting multinational clients with the procurement and execution of critical minerals, specialty metals, and advanced materials across complex and regulated supply chains.

About KLEAR

KLEAR is a capital intelligence platform providing financial visibility, liquidity management, and payment intelligence for complex global trade and procurement environments.

About Eaton Square

Eaton Square is a global M&A advisory and capital services firm with over 100 senior professionals across North America, Europe, Asia, and Australia. The firm advises on mergers and acquisitions, capital raising, and strategic growth initiatives for technology, services, and industrial businesses.

Cartika was advised by Andrew Light, Managing Principal (North America) at Eaton Square, alongside Nelson Bonito of Bridgecom.

A Strategic Partnership in Cloud Infrastructure

Founded in 2000, Cartika is a Toronto-based Infrastructure as a Service (IaaS) and managed hosting provider, delivering public cloud, private cloud, virtual server, and dedicated server solutions to businesses across Canada and the United States.

Over more than two decades, Cartika has built a strong reputation supporting both Linux and Windows environments through a centralized control interface that enables customers to deploy, scale, and manage cloud servers, load balancers, VPNs, backups, DNS/CDN, and other critical infrastructure services. As of 2025, more than 95% of Cartika’s revenue is recurring, serving a base of 200+ customers.

Earl & Partners acquires and operates fundamentally strong, often founder-owned businesses that are overlooked by traditional investors. The firm focuses on long-term value creation through operational support and strategic growth initiatives.

Positioned for Continued Growth

The IaaS sector continues to benefit from strong structural tailwinds, including cloud migration, increasing data and compute requirements, and growing demand for AI-optimized infrastructure. Cartika’s established platform, recurring revenue base, and mid-market focus position the business well for its next phase of growth under Earl & Partners’ ownership.

Looking Ahead

Earl & Partners will work closely with Andrew Rouchotas, CEO of Cartika, who will remain actively involved in the business going forward. Clients can expect continuity of leadership, supported by enhanced strategic and operational resources as Cartika enters its next chapter.

“Australia, North America, and Europe continue to see strong cross-border interest in high-quality technology and infrastructure businesses,” said Andrew Light, Managing Principal at Eaton Square. “Cartika represents the type of resilient, founder-led platform that aligns well with entrepreneurial capital seeking long-term value creation.”

For more information, contact:

Andrew Light
Managing Principal, North America
Tel: +1 647 985 2639
Email: andrew.light@eatonsq.com

About Earl & Partners
Earl & Partners is an entrepreneurial investment firm founded by partners with backgrounds in investment banking, M&A, restructuring, and operational leadership. The firm focuses on acquiring and operating businesses across North America in tech-enabled services, SaaS, healthcare, niche manufacturing, and value-added distribution.

About Cartika
Cartika delivers enterprise-grade infrastructure, compliance support, data security, and managed backup and disaster recovery solutions, serving mid-market organizations seeking reliable, flexible cloud infrastructure without building it in-house.

About Bridgecom:
Having assisted in financings all over the world, BridgeCom Consulting Group provides Capital Advisory Services, with a specialization in debt placements, to SME business clients and commercial real estate developers/owners in North America and internationally.

Now, we’re taking that same spirit of innovation and global reach into a new frontier.

As we’ve worked with global technology and investment leaders, one challenge has stood out: while AI is moving faster than anyone imagined, the supply chains behind it are lagging. Critical GPUs, servers, and rare materials are increasingly difficult to source.

That’s why we created Silicon.

Silicon is an AI-native sourcing partner within Eaton Square that helps customers find hard to source inputs from rare earths, advanced metals through to advanced GPUs.

From day one, AI has been a co-creator in shaping our business model, brand, and even our first AI agents. Our goal is for 80% of our work to be completed by AI—while always guided by human experience and judgment.

This blend of AI and human expertise allows us to move faster, uncover new opportunities, and adapt as the AI landscape evolves.

Who We Help

Our clients are organizations that need fast, discreet access to critical AI technology and materials, including:

• Hyperscalers & cloud platforms
• Advanced material manufacturers & chipmakers
• AI start-ups & scale-ups
• Private equity & strategic investors
• Aeronautical, robotics & industrial builders

These are serious buyers with urgent needs—and Silicon puts us right at the center of their growth.

How We Help

Silicon sources rare materials and critical infrastructure behind the world’s most advanced AI systems, including:

• AI hardware: Servers, GPUs, accelerators, networking systems
• Edge & embedded systems: Ruggedized boards, compact compute, on-device chips
• Strategic materials: Rare earths, high-purity metals, specialty alloys and substrates
• Hard-to-find components: Legacy parts, controlled-use items, made-to-spec inputs
• Data center infrastructure: High-capacity cabling, cooling, and security systems

With Eaton Square’s global reach behind it, Silicon offers the speed and intelligence of AI combined with the credibility of an international advisory platform.

We’re excited to bring Silicon to the world and invite you to learn more at www.siliconesq.com.

And if you know anyone who needs help with sourcing, please connect them with us at contact@eatonsq.com

At Eaton Square, we regularly speak with both buyers and sellers of services firms. One thing is clear: the features that sellers believe are valuable are not always aligned with what buyers are actually looking for.

Here are seven buyer priorities that sellers of services businesses often underestimate—and how to better prepare your firm for a successful sale.

1. Recurring Revenue Over Project Work

Buyers love predictability. A firm built on long-term contracts or recurring revenue models (like managed services or retainers) is typically valued higher than one relying on ad hoc projects.
Tip: Highlight contract terms, renewal rates, and the percentage of revenue that is recurring in your financials.

2. Strong Client Retention and Diversification

Having a few high-value clients may be profitable—but it can also raise red flags for buyers concerned about concentration risk. They want to see long-standing relationships and a diverse client base.
Tip: Show client tenure and satisfaction metrics. Prepare for questions about what would happen if your top one or two clients left.

3. Documented and Scalable Processes

Is your business built around you—or a repeatable, scalable system? Buyers want to know your firm can continue to operate smoothly without heavy reliance on founders or a handful of senior team members.
Tip: Invest in documenting standard operating procedures (SOPs), workflows, and training materials before going to market.

4. Proprietary IP or Tools

Intellectual property—even in the form of frameworks, databases, software, or methodologies—can be a key value driver. These assets make your offering more defensible and difficult for competitors to replicate.
Tip: Catalog and explain any IP you’ve developed. Be clear about ownership rights and legal protections.

5. A Capable, Committed Team

People are your greatest asset—but also a potential risk. Buyers want to understand whether key staff will stay on post-transaction, and whether there’s a leadership bench ready to step up.
Tip: Outline retention strategies, team structure, and succession planning. Have employment contracts and incentive plans ready.

6. Clean, Transparent Financials

Service firms sometimes underinvest in robust financial reporting. That’s a mistake. Buyers want to understand the true earnings power of your business—free from one-time expenses or owner perks.
Tip: Work with your accountant or advisor to present adjusted EBITDA, normalized costs, and a clear picture of cash flow.

7. A Growth Story

Past performance matters—but buyers are really buying the future. They want to see a credible path to growth, whether that’s through new services, markets, geographies, or client segments.
Tip: Prepare a clear, concise growth narrative supported by data. Highlight your pipeline, competitive advantage, and market trends.

Final Thought: Sell a Business, Not Just a Job

Many services business owners have spent decades building deep expertise and client trust—but they’ve also unintentionally built a company that revolves around them. To buyers, that’s a risk. The key to a successful exit? Start viewing your firm as a transferable asset, not just a successful practice. That means strengthening systems, teams, and recurring value well before you enter a transaction.

Thinking about selling your services business?

At Eaton Square, we specialize in advising owners of consulting, engineering, IT, and professional services firms on how to prepare for and navigate a successful exit. Let’s talk. Contact us for a confidential conversation.

The Waiting Game

For the fifth consecutive month in 2025, we see no changes to its Market-At-a-Glance metrics, a striking contrast to the volatility roiling public and syndicated debt markets. Despite geopolitical tensions, tariff uncertainties, and fluctuating recession odds, private market conditions remain steadfastly issuer-friendly; leverage multiples, pricing, and terms in June mirror January’s levels, which were among the most competitive since 2007. Consistency in pricing, leverage, and liquidity is not a reflection of market confidence, however, but rather a symptom of inertia. The long-anticipated resurgence in M&A activity remains elusive; deal flow continues to underwhelm, with new money transactions (acquisitions, growth capital, and leveraged recaps) still lagging historical norms. For market professionals this June, “the waiting is the hardest part.”

Public Markets Volatility Versus Private Market Stability

The public markets tell a different story. The ICE BofA U.S. High Yield Index Option-Adjusted Spread (OAS) spiked to 485 basis points on May 15th before settling at 325 basis points by June 5th, a 33% swing in just three weeks (source: FRED). Investment-grade bonds (ICE BofA U.S. Corporate Index) saw spreads climb from 93 basis points to 130 basis points and back to 95 basis points over the same period, reflecting a 40% fluctuation (source: FRED). Recession odds, per Polymarket, peaked at 60% in early May but have since moderated to 35% by mid-June. These gyrations correlate with ongoing trade policy uncertainties, yet the private market remains unmoved.

Ample Liquidity, Limited Opportunities

The resilience of private market liquidity stems from two persistent drivers: an unprecedented $570 billion in private credit dry powder (source: PitchBook, June 2025) and a continued scarcity of new money deal flow (M&A, leveraged buyouts, and growth capital). PitchBook notes that private debt dry powder grew by 0.6% from May’s $566.8 billion, with fundraising holding steady despite a sluggish M&A environment. New money issuance in Q2 2025 accounted for just 12% of leveraged loan volume, compared to a five-year average of 30% (source: Bloomberg). This imbalance—abundant capital chasing limited opportunities—keeps lenders aggressive, offering competitive pricing and terms.

Why M&A Activity Remains Slow

M&A activity, or more correctly stated, the lack of M&A activity, continues to be the prime culprit for the current private market doldrums. Bloomberg reports that Q2 2025 saw only 350 private equity exits valued at $160 billion, down from Q1’s 402 exits at $186.6 billion. The backlog of unsold portfolio companies now exceeds 12,500, with 4,000 held for over five years (source: PitchBook). Since 2019, the average hold period (i.e., years to exit from date of first investment) has increased from 7 years to 8.2. According to E&Y Parthenon, “For U.S. deal volume over $100m, Q1 [2025] showed early positive signs relative to 2024, surpassing last year’s levels by about 9% in total (6% for corporate M&A and 16% for PE). However, slower monthly momentum in dealmaking activity at the end of Q1 along with slower expected GDP growth, persistently elevated policy uncertainty and heightened financial market volatility, will challenge dealmaking through the rest of the year. We estimate that total US deal volume (PE plus corporate M&A) will only rise 1% in 2025, following a 19% advance in 2024… In our pessimistic scenario—where GDP growth and corporate profits are weaker, inflation hotter and interest rates higher—deal volume is expected to contract by 6% in 2025.” Getting more granular, there is an increasing body of data supporting even a sharper decline in M&A activity through year-end:

• Q1 2025: Deal counts declined sharply (down -19%) from Q4 2024, despite an increase in announced deal values
• April 2025
  • US M&A activity declined overall.
  • Deal volume exceeding U.S.$100 million fell 18.7% from March.
  • Deal volume is down 24.8% year-over-year (YoY) for deals exceeding US$100m.
  • Corporate M&A deal volume (>$100 million) dropped 30.5% YoY.
  • Private equity deal volume (>$100 million) fell 3.6% YoY.
  • U.S. M&A deal activity decreased 1.6% from March.
•  February 2025: Saw the fewest monthly deals announced in the past four years (3,208 deals).

Leveraged Recaps Gain Ground

This scarcity of actionable financings amplifies opportunities for leveraged recapitalizations, as sponsors seek liquidity without exiting at depressed valuations. Lenders are responding with leverage tolerances up to 4.75x LTM EBITDA for issuers above $25 million in EBITDA and pricing and terms typically reserved for accretive transactions. Even lower middle market issuers (EBITDA < $10 million) can achieve aggregate leverage multiples of 4.0x in a leveraged recap scenario. But the foundation underpinning these market conditions is fragile. Should inflation re-accelerate or recession fears materialize, the private market will not be immune. Lenders are already preparing for a potential down-cycle, with greater scrutiny of covenant structures, increased diligence, and a renewed focus on cash equity contributions.

Conclusion: A Fragile Standstill

In short, the private market is in a state of suspended animation—waiting for clarity, waiting for deals, and waiting for the next macroeconomic shoe to drop. Until then, the music plays on, but the tempo is slowing… and “The waiting is the hardest part.”

Tone of the Market

As we hit the halfway mark of 2025, the private market remains a bastion of stability in a world of economic turbulence and geopolitical volatility. Despite tariff tantrums, recession whispers, and traded market rollercoasters, private credit spreads and leverage multiples are as steady as a metronome. Private credit dry powder, still at a record $566.8 billion, continues to fuel aggressive terms, while a drought in new money deal flow—acquisitions, LBOs, and growth capital—keeps lenders hungry for opportunities. M&A deal flow in particular has gone from weak to downright anemic, with the deal count down 35% year-over-year. Pricing, leverage, and terms in June are virtually identical to January’s and among the most issuer-friendly since pre-Great Recession days. Yet, to many market participants, this issuer-friendly environment feels like a calm before the storm; interest rates have “been higher for longer,” and cyclical sectors struggling under the combined burden of inflationary tariffs and increased capital costs could face an inflection point leading to increased defaults. Though such a situation may not precipitate a full-blown “credit meltdown,” at the very least, it could lead to a more pronounced “risk-off” issuance environment.

Minimum Equity Contribution

The level of new cash equity in a deal remains a primary focus point for all leveraged buyouts. Regardless of enterprise multiples, lenders remain fixated on a minimum 50% LTV (i.e., equity capitalization of 50% of enterprise value), and actual new cash in a deal should also constitute at least 75% of the aggregate equity account. While lenders will certainly give credit to seller notes and rollover equity, the cash equity quantum continues to be an essential and primary underwriting consideration. The good news is that non-bank lenders, private credit funds, insurance companies, BDCs, and SBICs are all potential sources of equity capital as well as debt capital, and in many cases, are more than happy to shore up and backfill the equity account directly.

Equity Investment

Liquidity for both direct equity investments and co-investments is robust in the new year, and in most cases, more competitive debt terms can be achieved where there is an opportunity for equity co-investment. Importantly, equity investment can take a variety of forms (preferred, common, warrants, even HoldCo notes) depending on the unique requirements of a given deal. Interest in independently sponsored deals continues to be strong as well, but investors will require that the independent sponsor has real “skin in the game” (i.e., a meaningful investment of their own above and beyond a roll-over of deal fees). While family offices remain the best source of straight common equity, credit opportunity funds, insurance companies, BDCs, and SBICs will actively pursue providing combined debt and equity tranches.

Securities offered through SPP Capital Partners, LLC: 550 5th Ave., 12th Floor, New York, NY 10036. Member FINRA/SIPC

Stefan Shaffer
Managing Partner and Principal

Stefan has over 30 years of experience in the private market includes hundreds of transactions in North America, Asia and Europe. Prior to becoming a principal at SPP Capital, Stefan was a Vice President in the Private Placement Group at Bankers Trust Company where he was responsible for origination, structuring and pricing of private placements for the Capital Markets Group, both nationally and internationally.

sshaffer@sppcapital.com
Ph: +1 212 455 4502

Factors That Increase  The Value Multiple

At Eaton Square, we’ve seen firsthand how value multiples are closely tied to a buyer’s perceived risk. The lower the risk, the higher the multiple. So, while many owners focus on achieving a particular sale price, the more strategic approach is to focus on making the business more desirable—and de-risking it for the buyer.

Below, we outline key factors that can help increase the value multiple buyers are willing to pay.

1. Strengthen Your Financial Foundations

Buyers need clarity and confidence in the numbers. Cleaning up your financials means more than tax minimisation—it means aligning internal records with external reporting, tightening key ratios, and eliminating non-core or personal expenses from your accounts. While advisors can assist with recasting earnings, only you can ensure your financial systems are clean and reliable.

2. Build a Standalone Leadership Team

If your business relies heavily on your personal involvement, it may struggle to attract premium buyers. Establish a leadership team with defined roles, decision-making authority, and formal agreements in place. A capable, independent team signals that the business can thrive under new ownership.

3. Reduce Customer Concentration

No single customer should account for more than 10% of revenue. High dependency creates perceived risk. Broaden your base by expanding into adjacent markets, acquiring new clients, and deepening your bench of suppliers and partners.

4. Reach Scale

Smaller businesses—particularly those with less than $5 million in revenue or $1 million in EBITDA—are often overlooked by institutional buyers due to the effort required post-acquisition. Consider organic or strategic growth before going to market.

5. Document Core Processes

Clear documentation across operations, finance, HR, and sales demonstrates that your business is organised and replicable. This also facilitates buyer due diligence and can support financing efforts.

6. Expand Strategically

Growth in revenue, product offerings, or geographic markets increases both perceived potential and transferable value. Show buyers that there is a well-executed strategy in place—not just ambition.

7. Demonstrate Agility

Markets shift. Buyers value companies that have shown the ability to respond, pivot, and capture new opportunities. Document examples of how your business has evolved or innovated in recent years.

8. Highlight Your Track Record

A consistent performance history increases confidence in future earnings. Use historical data to illustrate how the business has weathered market changes and continued to deliver results.

9. Know Your Market Position

Be prepared to educate buyers about your industry and your position within it. Market share, growth prospects, and competitive advantages are all key factors that influence valuation.

10. Build Your Brand

Buyers are drawn to businesses with strong reputations, not just strong revenue. Invest in your brand visibility—within your niche, not necessarily with the general public—and position your business as a trusted leader in its field.

11. Formalise Your Plans

Have a clearly articulated business plan, backed by financial forecasts and documented goals. This helps buyers see how the business can be scaled under their ownership.

12. Recognise Hidden Assets

Beyond revenue and profit, intangible assets like IP, proprietary systems, long-term contracts, or strategic alliances can significantly impact value. Make sure these are documented and well-positioned in your sale process.

13. Streamline Non-Core Functions

Many successful sellers outsource logistics, payroll, or manufacturing to keep their operations lean. This not only reduces complexity but allows buyers to see how core capabilities can be leveraged without distraction.

14. Maximise Cash Flow

Ultimately, buyers are buying future cash flows. Work on improving operating margins and net profit. Show clear, sustainable pathways to continued profitability.

15. Improve Presentation

A clean, well-maintained operation—physically and administratively—sends a strong message. Sell or retire idle assets, tidy up the workspace, and ensure your business is presented in its best light.

The Best Time to Start Is Now

Preparing your business for sale takes time—often 12 to 24 months or more. The earlier you begin, the greater your ability to shape how your business is perceived and valued by buyers.

At Eaton Square, we help business owners take a structured, proactive approach to improving value ahead of a transaction. By addressing the factors above, you’re not just improving your multiple—you’re creating a more resilient, attractive business for the right buyer.

If you’re considering a sale in the next few years, now is the time to prepare. Speak with one of our advisors to understand where you stand—and where you can go.

*This article originally appeared on IBG Business website.

John Johnson
Principal

John Johnson is a Principal at Eaton Square. He serves M&A clients by marshaling strong community, regional and national relationships combined with a rich professional background in business sales and purchases. John and his Oklahoma-based firm have managed projects for the owners of hundreds of private family and entrepreneurial businesses.

john.johnson@eatonsq.com
Ph: +1 (918) 749-1616

Confidentiality isn’t just a matter of good paperwork—it’s a disciplined approach that should guide every stage of the process, from initial outreach to due diligence.

A Costly Misstep: When Confidentiality Fails

Consider the case of a large conglomerate selling two subsidiaries. The sale of the first business went smoothly, led by an M&A advisor who managed the process professionally. However, the second sale took a different turn.

A prospective buyer—a direct competitor—approached the seller’s CEO, asking to bypass the broker and negotiate directly. The buyer refused to sign a confidentiality agreement, claiming it was too restrictive. Against their advisor’s counsel, the CEO shared sensitive financial and operational information in the hopes of expediting the deal.

The result? The buyer walked away and immediately began poaching employees, undermining customer relationships, and spreading damaging rumours about the business’s viability. Ultimately, the subsidiary’s performance suffered—along with its value.

This real-world scenario is a powerful reminder: confidentiality isn’t just a legal formality. It’s a business-critical safeguard.

Why Protecting Confidentiality is Essential

Maintaining confidentiality protects more than just proprietary data. It ensures:

• Stronger buyer interest. Top-tier buyers are more likely to engage when the process is well-managed and professional.
• Preservation of value. News of a sale—or failed sale—can destabilise relationships with employees, customers, and lenders.
• Regulatory compliance. Disclosures must be carefully managed in line with privacy, labour, and competition laws.
• Business continuity. Disruption or mistrust within the team can derail day-to-day operations and distract leadership.

Put simply, poor confidentiality can erode value long before a deal is closed.

The Role of a Professional Advisor

This is where experienced M&A advisors bring unique value. An effective advisor:

• Ensures NDAs are signed and enforceable.
• Controls the timing and flow of information to buyers.
• Maintains discretion throughout the process.
• Shields the management team from unnecessary distractions.

By creating a structured, controlled environment, advisors enable sellers to share the right information with the right buyers—at the right time.

Professionalism Protects Value

Selling a business is not just a transaction—it’s a strategic process. And confidentiality is a core part of that strategy. A disciplined, well-managed sale process protects sensitive information, preserves value, and helps secure the best possible outcome for the seller.

After a lifetime of achievement in business, many senior professionals approach retirement or semi-retirement with a familiar question: What’s next? For those who’ve led, scaled, advised, and steered organisations, the transition away from full-time work can feel like the end of a powerful era. But it doesn’t have to.

At Eaton Square, we’ve long recognised that leadership doesn’t switch off with a retirement date. Experience, networks, and insight remain valuable assets—and for the right people, there remains a profound opportunity to stay connected, informed, and influential. That’s why we created the Eaton Square Associate Network.

Eaton Square Associate Network

The Associates Network is a low-commitment, high-value community designed for retired or semi-retired executives who want to maintain professional identity, remain intellectually engaged, and contribute meaningfully—without the demands of operational delivery. It’s not about going back to the 60-hour week; it’s about staying part of the conversation, on your own terms.

Eaton Square is an international M&A and capital services firm operating across 25 offices in nine countries. With over 150 senior professionals globally, our platform is purpose-built for cross-border transactions and capital services across sectors such as IT, engineering sciences, professional services, industrials, mining and emerging technologies. Our clients range from founders of $20–$200 million businesses to global corporations seeking to grow through acquisitions.

The Associates Network extends our global platform by welcoming experienced professionals—former CEOs, partners, business leaders, and senior advisers—into a trusted circle. Associates are individuals with deep networks and a desire to stay close to the industries they helped shape. They play a critical role in expanding our reach, surfacing quality opportunities, and deepening our industry insights.

Benefits of the Associates Network

Membership in the network brings several privileges. First, there’s the intellectual stimulation and professional alignment. Associates are invited to participate in quarterly briefings, webinars, and industry talks. These sessions are led by Eaton Square Principals and external experts, designed to sharpen understanding of capital markets, sector trends, and the evolving landscape of M&A.

Of course, the network also offers financial recognition. When Associates refer opportunities—whether it’s a founder considering an exit or a company exploring acquisition—they work closely with an Eaton Square Principal to qualify and progress the lead. If the referral results in a closed transaction, the Associate receives a share of the fees. It’s a win-win: value for clients, recognition for relationships, and no operational complexity.

Being part of the Associates Network also means becoming part of a global professional community. From Sydney to San Francisco, Toronto to Tokyo, our Associates and Principals connect across borders. These aren’t just networking opportunities—they are relationships rooted in shared values, mutual respect, and decades of collective experience. The strength of the network lies not just in what we know, but in how we share it.

Join the Eaton Square Associates Network

At Eaton Square, we don’t see retirement as an ending—it’s an evolution. The Associates Network is designed to honour what seasoned professionals have built over their careers, while creating new pathways to contribute, connect, and stay engaged.

If you’re a senior leader looking for a new way to stay active professionally—without returning to the rigour of deal delivery—Eaton Square offers a home. A place to be intellectually curious, commercially connected, and part of something distinctive.

To explore joining the Associates Network, visit www.eatonsq.com. We’d be delighted to welcome you into our global conversation.

A Steady Private Market in an Unsteady World

For the fourth consecutive month this year, we are not making any changes to its Market-At-a-Glance metrics. While the mere maintenance of the status quo would hardly be noteworthy in most economic environments, given the magnitude of the shifts in pricing and yields in the traded debt markets (public, 144A, and syndicated loans) for the same period, it is actually quite remarkable. The lack of private market volatility in 2025 in the face of heightened geopolitical tensions, unprecedented economic uncertainty, and an on-again/off-again trade war between the two largest economies in the world has many private market participants wondering why “Nothing Changes Around Here.”

Public Credit Spreads Swing—Private Terms Hold Firm

To be more specific, the CE BofA U.S. High Yield Index Option-Adjusted Spread on March 24th was ~305 basis points; by April 7th (five days after “Liberation Day”), that spread increased to 461 basis points; by May 6th, that spread declined to 315 basis points (an ~51% swing both up and down within ~43 days). For investment-grade bonds (ICE BofA U.S. Corporate Index) for the same period, spreads went from ~90 basis points up to 120 basis points and back down to 93 basis points (still a 33% spike up and drop back in about a month and a half). Not surprisingly, these dramatic swings in pricing correlate precisely to the odds of a recession of the U.S. economy as well; by April 7th, consensus odds for a recession (U.S. Polymarket 2025 Recession Odds) surpassed 65% before declining to approximately 37% by mid-May.

Private Markets Show Unusual Stability

With all this noise in the general economy and heightened volatility in the traded exchanges, you would think there would be a corresponding unsettling in the private market, but that really never materialized. To the contrary, as a general proposition, pricing, leverage multiples, and general terms in May are nearly identical to where they were in January—and lest we not forget, pricing and terms in January were among the most aggressive and competitive they have been since 2007. As noted in our January Update, “It is hard to imagine a more favorable environment for financing middle-market issuers than the private market in Q1 2025. Credit spreads have compressed to their lowest levels in years, and leverage multiples for larger issuers have expanded to levels not seen since just before the Great Recession.”

Excess Liquidity, Limited Deal Flow

Importantly, the drivers for these “excess liquidity” conditions in May are literally identical to those in January, but simply more pronounced. The two most significant drivers are the magnitude of private credit “dry powder” (i.e., untapped capital available for deployment into new deals) and a dearth of “new money” deal flow (i.e., M&A transactions, LBOs, growth capital, and leveraged recapitalizations). As per Pitchbook, “Halfway through 2024, private debt dry powder sat at $566.8 billion—a new high—and is on track for its second consecutive year of growth. The dry powder is through June 30 due to late reporting from GPs and LPs. The asset class’s robust fundraising supported the growth over the past couple years. Despite the slight fundraising slowdown in 2024, dry powder’s ascent has not been affected as it has in other asset classes, such as PE. Moreover, dry powder’s share of AUM now sits at 31.1%, which aligns with each of the last two years.” In short, the “supply” side of the equation is robust; however, the “demand” side of the equation remains woefully below expectation.

A Perfect Storm for Private Equity

The Wall Street Journal recently published “Private Equity World Engulfed by Perfect Storm,” noting that “even before President Trump’s tariff chaos, buyout firms had been struggling to sell their portfolio companies and return money to anxious investors. Now recession fears and market turmoil have brought dealmaking to a near standstill.” As per data cited by Pitchbook, “Wild stock-market swings related to tariffs threaten to upend private equity’s plans to exit from investments as the industry sits on a backlog of more than 12,000 U.S. companies, including about 3,800 that have been held for five to 12 years… The year started relatively strong with an estimated 402 exits during the first quarter worth some $186.6 billion, up from 332 exits totaling $88.2 billion the same period a year earlier, but the preliminary data also show that while exit value has been increasing quarter on quarter, the number of exits in the first quarter declined from the fourth.” Until we see a meaningful uptick in PE exits and M&A activity in general, market conditions will continue to favor issuers as commercial banks, non-bank senior direct lenders, credit funds, SBICs, BDCs, and insurance companies all compete for a diminished supply of new money deal flow. Continued economic uncertainty only exacerbates the situation.

An Opportune Moment for Recapitalisations

There is one particular beneficiary of the current incongruity between capital and deal flow; specifically, equity sponsors that are seeking liquidity for their LPs yet are reluctant to exit and transact at current enterprise multiples. Timing is exceedingly opportune for leveraged recapitalizations. SPP’s ongoing outreach to lenders confirms a heightened interest in recaps, with pricing and terms historically reserved for accretive uses of capital (acquisitions and growth capital). That translates to pricing without the “premium” associated with a non-accretive use of capital, expanded leverage capacity, and increased “adjustments” to EBITDA for covenant compliance businesses. Investors will still scrutinize leverage as a percentage of enterprise value (i.e., the residual “LTV” or loan to value) as well as traditional underwriting considerations (size, sector, supplier/customer concentration, and cyclical vulnerabilities).

Conclusion: Issuers Still Have the Upper Hand

The takeaway this month is pretty straightforward; given the lack of overall transaction activity and an abundance of capital earmarked for deployment, with base rates and credit spreads remaining among their most competitive levels in the last five years, this is still very much an issuer’s market, and luckily, issuance conditions are not likely to deteriorate anytime soon. After all, “Nothing Changes Around Here.”

Minimum Equity Contribution

The level of new cash equity in a deal remains a primary focus point for all leveraged buyouts. Regardless of enterprise multiples, lenders remain fixated on a minimum 50% LTV (i.e., equity capitalization of 50% of enterprise value), and actual new cash in a deal should also constitute at least 75% of the aggregate equity account. While lenders will certainly give credit to seller notes and rollover equity, the cash equity quantum continues to be an essential and primary underwriting consideration. The good news is that non-bank lenders, private credit funds, insurance companies, BDCs, and SBICs are all potential sources of equity capital as well as debt capital, and in many cases, are more than happy to shore up and backfill the equity account directly.

Equity Investment and Co-Investment

Liquidity for both direct equity investments and co-investments is robust in the new year, and in most cases, more competitive debt terms can be achieved where there is an opportunity for equity co-investment. Importantly, equity investment can take a variety of forms (preferred, common, warrants, even HoldCo notes) depending on the unique requirements of a given deal. Interest in independently sponsored deals continues to be strong as well, but investors will require that the independent sponsor has real “skin in the game” (i.e., a meaningful investment of their own above and beyond a roll-over of deal fees). While family offices remain the best source of straight common equity, credit opportunity funds, insurance companies, BDCs, and SBICs will actively pursue providing combined debt and equity tranches.

Dividend Recapitalization Liquidity

Though continued volatility and a perceived credit down-cycle could inhibit and even terminate dividend recap activity, for the time being, the market remains dividend recap-friendly, especially where the recap is combined with a more accretive use of capital, such as an acquisition or specified growth capital initiative. As a general proposition, non-bank lenders are readily available to fund leveraged recaps, with leverage tolerances exceeding 4.5x LTM EBITDA for larger middle-market issuers (>$25 million of LTM EBITDA), while commercial banks remain reticent to fund recapitalization financings absent exceedingly low leverage (<2.0x LTM EBITDA) and LTV metrics (<30% TD/Enterprise Value) combined with a historical credit relationship.

Securities offered through SPP Capital Partners, LLC: 550 5th Ave., 12th Floor, New York, NY 10036. Member FINRA/SIPC

Stefan Shaffer
Managing Partner and Principal

Stefan has over 30 years of experience in the private market includes hundreds of transactions in North America, Asia and Europe. Prior to becoming a principal at SPP Capital, Stefan was a Vice President in the Private Placement Group at Bankers Trust Company where he was responsible for origination, structuring and pricing of private placements for the Capital Markets Group, both nationally and internationally.

sshaffer@sppcapital.com
Ph: +1 212 455 4502

This decision—more critical now than ever amid global economic uncertainty and evolving trade policies—can define the legacy and financial outcome for owners. With tariffs, interest rates, and market volatility influencing valuations, timing truly is everything.

Our Principal Bob Latham wisely observes, “Owners rarely sell too early, but far too often, they hold on too long.” And the consequences can be stark. Health issues, market disruptions, or unexpected regulatory shifts can rapidly erode the value of a business built over decades.

One vivid example from recent experience: a business owner in his late 60s had planned to grow his company for another decade but was suddenly struck by illness. The business lost its guiding force, and its value to heirs declined sharply. This underscores a sobering reality—no matter how strong your company seems, unforeseen events can derail even the best-laid plans.

How can owners protect their wealth and legacy? Two key practices stand out: a personal health check and a thorough scan of the business horizon.

Business Health Check

Just as personal health is vital for individuals, regularly assessing the health of your business is crucial for long-term success. Monitoring key indicators like cash flow, customer retention, operational efficiency, and market position helps you spot risks early and seize growth opportunities before they become urgent. Proactively evaluating your business’s “wellness” ensures you’re prepared to make strategic decisions—whether that means scaling up, pivoting, or preparing for a sale.

Scanning the Horizon

Even a thriving business isn’t immune to external forces. Interest rate hikes, inflationary pressures, changing tax laws, or shifts in buyer appetite can swing valuations dramatically.

Right now, for example, rising interest rates and inflation are headwinds for some sectors, while strong buyer competition in others sustains high valuations. Owners who actively monitor these market dynamics can anticipate windows of opportunity—or risks—to act decisively rather than react too late.

What Moves Business Values?

Factors that boost business value:

• Consistent profit growth
• Recurring revenue and diversified customer base
• Strong, stable management teams
• Favorable tax environments
• Robust economic confidence
• Healthy owner focus and energy
• High buyer demand and capital availability

Factors that can diminish value:

• Declining or volatile sales/profits
• Market downturns or competitive disruption
• Owner health issues or leadership instability
• Rising interest rates and taxes
• Shrinking pools of qualified buyers
• Legal or regulatory challenges

The Good News for Sellers Today

Despite uncertainty, current market conditions still favor sellers. Acquisition capital is plentiful, and motivated buyers are competing for quality companies. But this window won’t remain open indefinitely. Baby Boomer retirements and economic shifts will soon swell supply and likely shift power toward buyers.

Final Thoughts

Smart owners recognize the urgency of timing. They do the hard work early—monitoring their health, scanning market trends, and partnering with seasoned M&A advisors who understand their business and can navigate complexities.

At Eaton Square, we guide owners through these critical decisions with insights grounded in over a thousand successful, well-timed transactions worldwide. Whether you’re holding and growing or preparing to sell and move on, understanding timing and market dynamics is your best tool for maximizing value and securing your legacy.

Thinking about your next move? Reach out to Eaton Square today to start your personalized business readiness review.