Investor Relations

Press Release Details

P10 Holdings Announces Transformative Acquisition and Changes to Its Capital Structure

January 16, 2020

P10 Holdings, Inc. (OTC: PIOE, or “P10”), owner of RCP Advisors 2, LLC and RCP Advisors 3, LLC (“RCP Advisors”), has signed a definitive agreement to purchase Five Points Capital, Inc. (“Five Points”), a leading lower middle market alternative investment manager focused on providing both equity and debt capital to private, growth-oriented companies and LP capital to other private equity funds, with all strategies focused exclusively in the U.S. lower middle market.  Since its founding over two decades ago, Five Points has successfully raised and deployed in excess of $1.5 billion on behalf of institutional and high net worth clients.

“We could not be more excited to welcome Five Points into the P10 family,” said Co-CEOs Robert H. Alpert and C. Clark Webb. “With the addition of the Five Points team and investment strategies, P10 and its subsidiaries are uniquely positioned to offer a comprehensive suite of lower middle market private equity investment strategies to limited partners around the globe.”

RCP Advisors Co-Founders and Managing Partners Fritz Souder and Jeff Gehl added, “We believe the combination of RCP Advisors and Five Points creates an irreplaceable franchise in North American lower middle market private equity, offering a full suite of market leading products and services to private equity GPs and LPs alike.”  

Five Points will operate as a wholly owned subsidiary of P10 and will continue to be managed by its existing team.

Five Points Founder and Managing Partner David Townsend added, “With common cultures, extraordinary long term track records, and a singular focus on the lower middle market in North America, we see tremendous opportunity in the years ahead alongside RCP Advisors.” 

Terms of the Transaction

As consideration in the deal, Five Points will be receiving cash and convertible preferred equity (“convertible preferred”) in a newly formed limited liability company owned by P10, which will own both RCP Advisors and Five Points (“Holdco”).   

The cash portion of the transaction is expected to be funded by current P10 cash on hand, alongside the issuance of additional convertible preferred to Keystone Capital, Inc., a leading private investor based in Chicago, IL.  Alongside its investment, a Keystone representative will join the Holdco Board of Directors.

The Convertible Preferred is expected to yield 1% per year in cash and be convertible at the holders’ option into common equity at Holdco.  The convertible preferred contains certain put rights and governance rights at Holdco.  While the convertible preferred converts into Holdco common equity—and not P10 common stock—the conversion ratio into Holdco common equity, relative to P10 ownership of Holdco common equity, equates to a conversion price of $3.00 per share at P10.

RCP Exchange

As part of the transaction, all RCP Partners have elected to convert approximately $10 million of their tax receivable agreement into $10 million worth of convertible preferred in Holdco.  This action is designed to further align P10, RCP Partners, Keystone, and Five Points.   

Pro-Forma Financial Impact

Upon the closing of the transaction, a total of $60 million of convertible preferred will be issued and outstanding, convertible into approximately 18% of Holdco assuming full conversion, with P10 retaining the remaining 82% of Holdco.  Moreover, P10 expects its long-term liabilities to be reduced by $10 million upon closing of the transaction, reflecting the exchange referenced above.

Five Points is expected to contribute in excess of $10 million of adjusted EBITDA in its first twelve months under P10 ownership, with 100% of revenues generated from long-term, contractual management fees with an average duration approaching 10 years.


Closing requires approval from the Small Business Administration and consent from the limited partners in Five Points funds.  We expect the transaction to close during the first half of calendar 2020.

Raymond James acted as exclusive financial advisor to Five Points on this transaction.

Ownership Limitations

P10’s Certificate of Incorporation, as amended, contains certain provisions for the protection of tax benefits relating to P10’s net operating losses. Such provisions generally void transfers of shares that would result in the creation of a new 4.99% shareholder or result in an existing 4.99% shareholder acquiring additional shares of P10.

Important Cautions Regarding Forward-Looking Statements

This press release includes forward-looking statements that relate to the business and expected future events or future performance of P10 Holdings, Inc. and involve known and unknown risks, uncertainties and other factors that may cause its actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Words such as, but not limited to, "believe," "expect," "anticipate," "estimate," "intend," "plan," "targets," "likely," "will," "would," "could," and similar expressions or phrases identify forward-looking statements. Forward-looking statements include, but are not limited to, statements about P10's ability to implement their business strategy, and their ability to consummate the contemplated transaction. The future performance of P10 may be adversely affected by various risks and uncertainties, including, without limitation, future capital requirements, regulatory actions or delays and other factors that may cause actual results to be materially different from those described or anticipated by these forward-looking statements. For a more detailed discussion of these factors and risks, investors should review P10's annual and quarterly reports. Forward-looking statements in this press release are based on management's beliefs and opinions at the time the statements are made. All forward-looking statements are qualified in their entirety by this cautionary statement, and P10 undertakes no duty to update this information to reflect future events, information or circumstances.