Teamshares, a New York-based technology-enabled acquirer of small and midsize businesses, has secured a $225 million preferred equity investment from accounts advised by T. Rowe Price Investment Management. The financing will primarily fund additional acquisitions as Teamshares expands its portfolio of established businesses. The agreement also allows the company to issue up to an additional $75 million in preferred equity to other institutional investors, potentially increasing the financing to $300 million.
The investment is structured as newly designated Series A perpetual, nonvoting, nonconvertible preferred stock.
Unlike common equity financing, the structure does not issue additional common shares or provide preferred investors with conversion rights into common stock.
However, the preferred shares carry dividend and redemption obligations and rank ahead of common shareholders in the company’s capital structure.
Teamshares intends to use the proceeds to accelerate its programmatic acquisition strategy, which focuses on purchasing established small and midsize businesses from retiring owners.
The company combines business acquisitions with a technology platform designed to identify potential targets, support acquired businesses, and manage a growing portfolio of operating companies.
Teamshares focuses on businesses generating approximately $500,000 to $5 million in annual EBITDA.
Its strategy involves acquiring these businesses, integrating them into the Teamshares operating platform, and helping employees earn ownership stakes in their operating companies.
The latest financing provides substantial additional resources to pursue acquisitions while preserving existing common equity ownership.
The company expects the funded capital to reduce financing uncertainty as it pursues its 2026 and 2027 acquisition growth targets.
Management plans to combine the preferred equity proceeds with senior acquisition debt and seller notes to finance future transactions.
This approach is intended to provide additional flexibility as Teamshares structures individual acquisitions.
The company has developed a substantial acquisition pipeline through its proprietary software.
According to CEO Michael Brown, the platform identifies more than 15,000 size-qualified businesses actively available for sale annually.
Teamshares also reported that it has signed additional letters of intent beyond the $30 million in aggregate EBITDA under LOI previously disclosed during its recent earnings call.
The company expects to begin deploying the new financing into acquisitions relatively quickly.
The Series A preferred shares carry an initial 16% annual cash dividend rate.
That rate can decline to 14.5% if Teamshares achieves specified deleveraging and EBITDA thresholds. The company may also elect to pay dividends in additional preferred equity rather than cash, subject to a higher rate.
The investment was issued with a 1% original issue discount, reducing the cash funded relative to the preferred shares’ stated amount.
The preferred stock ranks senior to common equity but junior to the company’s debt obligations.
Teamshares may redeem the shares at any time, although redemptions during the first two years are subject to a make-whole provision. Thereafter, the applicable redemption premium declines over time.
Preferred shareholders can require redemption beginning on the seventh anniversary of issuance.
The investment is expected to strengthen Teamshares’ financial position as it evaluates refinancing existing indebtedness and obtaining additional acquisition financing.
Management believes the new capital will allow it to pursue additional transactions while developing a more flexible balance sheet.
Founded in 2019, Teamshares operates subsidiaries across more than 40 industries and 30 states.
Its businesses generated more than $500 million in consolidated revenue during the trailing 12 months ended June 30, 2026.
The new financing follows Teamshares’ entry into the public markets and represents an expansion of its access to institutional capital.
Support: Goldman Sachs served as exclusive financial advisor, while Mayer Brown provided legal counsel to Teamshares. Nelson Mullins Riley & Scarborough served as legal counsel to T. Rowe Price Investment Management.
KEY QUOTES:
“We are grateful to attract top-tier investors like TRPIM as we set out to scale in the public markets. Teamshares has a vast inbound funnel of high-quality SMEs, with over 15,000 size-qualified, actively-for-sale companies per year through our software. We have subsequently signed additional LOIs beyond the $30 million of EBITDA under LOI disclosed on our recent earnings call, and we plan to start deploying this fresh balance sheet capital quickly into high-quality acquisitions with durable cash flow at attractive returns on invested capital.”
Michael Brown, CEO Of Teamshares
“The returns on our acquisitions are attractive relative to our blended financing cost and we believe that spread can drive meaningful earnings growth and incremental cash flow. Also, this investment strengthens our capital position and provides an important foundation for optimizing our capital structure over time, including enhancing our ability to access debt financing on attractive terms.”
Brian Gaebe, CFO Of Teamshares
