Midtown veterans Kreger, Renzo join Maxim, aim for top rankings

By Kenneth Lim

Boston, July 2 - Two veterans from Midtown Partners and Co. LLC have joined Maxim Group LLC's PIPEs team with the ambitious goal of carrying Maxim to the top of the league tables.

Richard Kreger, who was formerly a senior vice president in the investment banking department at Midtown, is now senior managing director of investment banking at Maxim with a mandate to lead its PIPEs and registered direct banking practice. Former Midtown vice president Salvatore Renzo also joined Maxim as senior vice president of investment banking.

"Rich brings considerable experience originating and structuring private placements to our investment banking team," Maxim investment banking head Clifford A. Teller said in a press release. "Rich will lead Maxim's efforts in building our PIPEs and registered direct banking practice and further demonstrates Maxim's commitment to broadening and deepening our origination and structuring capabilities. His extensive experience working with entrepreneurial companies seeking private investments in public companies makes him a valuable addition to our existing team."

"Sal has over 15 years of corporate finance and investment banking experience serving private and public companies primarily in the healthcare, technology and homeland security sectors," Teller also said. "His financial management experience serving as the CFO of emerging growth companies clearly brings an added dimension to the capabilities of our investment banking department."

Aiming for the top

Kreger told Prospect News that his goal is nothing short of leading Maxim's 18-person team to the top of PIPEs and registered direct placement rankings in 2008 and to become the top rights offering firm in 2009.

"Right now we're in the top 10," Kreger said of Maxim in the current PIPEs rankings. "Maxim wasn't in the top 10 in the last 10 years. When I was at Midtown Partners I helped to take the firm to the top four. I don't see any reason why, you take me and Sal ... why we couldn't move into the top three very quickly," Kreger said.

The Maxim team is focusing on investment banking services for nationally listed and emerging market companies with market capitalizations of $100 million to $1 billion.

"We're looking to work with the higher-quality companies that could become the next leaders in their emerging industries," Kreger said.

Post-deal performance

Kreger is also putting an emphasis on deals that can perform consistently.

"We are very strong in the post-deal performance of our transactions," he said. "If you look at our competitors ... the post-deal performance of some deals is terrible. Moving forward, at Maxim our goal is to make transactions that post-deal do very well. We want people to say, those guys really did a great job of incubating those companies."

The PIPEs veteran touted Maxim's resources and structure as key pluses.

"The firm doesn't have multiple layers of management to get approval for a transaction," Kreger said. "The buck stops here when it comes to determining whether to take on a client or not. I like the breadth and depth of the firm."

Rights issues for a tough market

Fund raising in the current market can be tough, and Kreger thinks rights issues could be an important tool for companies that are doing PIPEs.

"In a distressed environment the easiest way to raise money is from existing shareholders, and it's non-dilutive," he said. "The rights offering is the secondary that we do for small companies. ... Let's say a company has 2,500 shareholders. We assign each broker 10 shareholders and ask them to call the shareholders and explain to them about the offering so that the rights offering will be successful. If you don't have that kind of bandwidth, you can't carry out a successful rights offering."

Issuers will also place more value on expertise, Kreger said.

"This is the time when companies need to seek our experienced investment bankers who have been through the ups and downs of the market, who know how to roll up their sleeves, understand the capital structure of the companies and are willing to negotiate very hard for the companies," he said. "I pride myself on my ability to understand the businesses and negotiate on their behalf."

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