Strategy consulting firm Principia Partners has entered into a partnership with New York-based investment bank Akin Bay Co. that will open up investment banking services to Principia's middle-market clients.
Exton, Pa.-based Principia focuses on the plastics, chemicals and building products industries. The company defines the middle market as businesses with sales between $50 million and $250 million.
It is a move that will help Principia capitalize on what senior partner Lou Rossi calls an evolving mergers-and-acquisitions market and a wave of change in the plastics industry.
``We wanted to get positioned well for that next level of market restructuring in the industry,'' he said in a Nov. 26 telephone interview.
Market conditions are conducive for a partnership like Principia and Akin Bay to facilitate deals, he said.
``There's a lack of liquidity due to the credit crunch,'' Rossi said. ``There's a need for additional financing for growth and for funding of working capital, particularly around raw materials, where you have to maintain a good amount of inventory and those costs have been rising.''
Some business units simply are better in different hands.
``There are privately held companies that are looking for liquidity events, full or partial, in the form of joint ventures, partial sale, or outright sale,'' he said. ``There are also larger companies looking to move assets toward core businesses and away from underperforming assets. Those underperforming assets could have significant value for other strategic or financial buyers.''