Providing Comprehensive M&A and Capital Formation Services to Life Science Companies

Bathgate Capital Partners has formed a specialty group which focuses on Life Science Companies. Randy Swenson, PHD, MBA and Thomas J. Gargan, MD, lead the group in providing a full range of financial services to small and mid cap companies. Together they combine more than 40 years of investment banking, venture capital, consulting, and operational experience. They provide a full range of financial services including: Strategic and Financial Advisory Services, Investment Advisory/Due Diligence, Capital Formation, Private Equity and Debt Capital, Valuation, and specialize in Mergers and Acquisitions.

Merger/Acquisition

We assist in all aspects of a transaction including preparation of an offering memorandum describing the company and its operations, identify and contact potential strategic and financial buyers, negotiate the transaction structure and valuation which best suits the client company, and manage the due diligence and closing process.

We add value to the transaction as we take the time to truly explore and understand the dynamics of the business and the overall market and the industry. We can anticipate potential issues and craft creative solutions to achieve a successful transaction that meets the objectives of the client.

Capital Formation

In our capital formation planning, we first determine if the company can attract traditional debt financing; typically the least expensive, dilutive form of capital. If traditional debt is not an option, we will then explore other hybrid forms of debt (i.e. convertible, mezzanine, and participating debt) and equity financing.

Typical capital instruments we utilize to raise capital include:

I. Equity:

• Common Stock: BCP works with individuals, institutions and, in certain circumstances, members of BCP, to place common stock for our clients.
• Preferred Stock: Normally this equity instrument carries preferred rights over the common stockholders' rights. These rights typically are in the form of liquidation rights, dividend distributions, and claims to certain assets of the company.

• Senior debt: This form of debt is usually an asset-based borrowing vehicle. An example would be a revolving line of credit secured by the accounts receivable and inventory of the borrower. Also, senior debt can take the form of leases and real estate mortgages.
• Mezzanine/Participating debt: This form of debt usually has a second lien position behind a senior lender. It is normally based upon a lending formula based on cash flow. Companies that do not have a significant amount of hard assets to borrow against often use this debt vehicle, but typically have a history of cash flow.
• Convertible debt: This debt vehicle is most often used in situations where the company is seeking equity capital, but due to certain circumstances, the lender is uncomfortable with the current balance sheet. The advantage to a company of convertible debt, is if the company performs, and stock value increases, the lender will convert the debt into common stock at a pre-determined, negotiated price. If the lender converts its debt, the company is relieved of the obligation to retire the debt, and can use the cash flow designated to this debt retirement for growth.
• Bridge Financing: This type of debt financing is used in situations where the company requires additional capital to "bridge" it to a new source of capital. This new source of capital is typically a sale of the business or assets, or a new capital injection into the business. Bridge financing tends to be a more costly form of debt financing as the lender's repayment is conditioned upon a future event outside the normal course of business.

Randy Swenson, Ph.D., MBA , Director of Life Sciences

Dr. Swenson has more than 20 years of experience working with companies in the Life Science arena. He has developed the worldwide manufacturing strategies for two pharmaceutical companies, and served as the strategist and corporate finance leader for two Fortune 500 Life Science roll-ups. During his consulting career with Mercer Management Consulting, he has consulted to more than 20 Life Science companies. Prior to joining Mercer, he was a technology analyst for Hillman Ventures, working with a team of Venture Capitalists on early-stage financing in biotechnology and technology.

Dr. Swenson has previously been Director of Private Equity at Bathgate Capital Partners providing consulting, interim management and risk capital to small and emerging companies in Colorado. During this time, he has helped found 3 biotechnology companies in Colorado and supported numerous capital formation efforts.

Thomas J. Gargan, M.D., F.A.C.S, Director of Life Sciences

Dr. Gargan is a senior executive and Harvard educated surgeon with exemplary leadership, entrepreneurial and analytical skills in building and advising companies in life science (medicine and healthcare), technology, marketing and real estate. He has over 20 years of operational and venture capital experience. He is respected for strong interpersonal skills, integrity team building, vision, creativity and resourcefulness. Dr. Gargan built an international surgical practice and ambulatory surgery center, was chief of service for a major teaching hospital, and created a private foundation for the care of indigent children. He has helped launch over 5 "new" technology companies, he has served as a general partner, limited partner, consultant, manager and advisor for a local investment bank and real estate developer in Denver. He has served on either the Board of Directors or on the Board of Advisors for over ten new businesses, and has been the life science advisor for CTEK, a Denver-based business incubator.

A former plastic surgeon and entrepreneur, Dr. Gargan specializes in advising, consulting and providing analysis for early stage companies in strategic planning, capital formation and exit strategy.