Daily News: January 5, 2018

CapX Partners Provides $5MM ABL to Javo


High growth trends in the cold specialty coffee and tea manufacturing sectors have fueled Javo Beverage Company’s strong top-line growth and necessitated a plan for additional production capacity. CapX Partners, Accord’s new equipment finance partner, provided a $5 million credit facility that allows for asset monetization of equipment deemed to be non-strategic to the company going forward and the availability to acquire new equipment better suited to Javo’s manufacturing process.

Javo management, along with its private equity sponsor, Falconhead Capital, sourced a corporate orphan asset in Indianapolis that fit Javo’s needs. The 240,000 square foot building and equipment were owned by a global flavor and fragrance business that needed to divest the asset. Javo negotiated a purchase letter of intent and then turned to their senior lender, Accord Financial, for financing ideas to efficiently close the asset acquisition.

Accord Financial’s EVP Terry Keating turned to CapX to review the Javo asset opportunity and determine what capital options could support Javo’s goal of quickly acquiring this valuable asset at an attractive cost.

CapX offered a short term, revolving senior secured credit facility using the fixed assets of Javo’s main manufacturing location as collateral along with the new machinery and equipment that were included in the Indianapolis turn-key asset acquisition. CapX will convert the facility into an amortizing senior secured loan matching the useful life and pro-forma debt service needs of the company.

“We are excited about this new relationship with CapX and the continuation of our-long term partnership with Accord Financial who has supported Javo Beverage as a lender since 2009,” said Dennis Riley, president and CEO at Javo Beverage. “We appreciate Accord Financial’s readiness to support us with the capital needed to fuel our future growth objectives. This expansion into a second facility will support the growth of our existing and prospective customers, further expand our reach to the east coast, and broaden our product portfolio in the coffee, tea, and botanical segment of the food and beverage industry.”

Javo Beverage manufactures and markets coffee, tea and botanical extracts, for food and beverage applications. Javo sells through various channels including foodservice accounts within the healthcare, contract feeders, gaming, and convenience store industries and to manufacturers of ready-to-drink emerging and global brands. Using proprietary extraction methods, Javo has perfected a process that blends years of refined art with the science of extraction.

“Taking the lead from our U.S. asset-based team at Accord Financial, we appreciated Falconhead and Javo’s ascent in the specialty beverage category and how the management team is positioning the company for future growth,” stated Jeffry Pfeffer, managing partner at CapX. “Javo’s management team did an excellent job coordinating CapX, Accord and a new real estate lender to close its acquisition on time.”

CapX Partners is a specialty finance company that focuses on companies looking for debt financing in the $2-$20 million range. CapX provides senior loans and leases and favors manufacturing, distribution, technology, energy and healthcare industries with an emphasis on revenue-producing fixed assets.

Founded in 1978 and publicly traded on the Toronto Stock Exchange, Accord Financial has built its success over nearly four decades of providing responsive and flexible financing solutions to small and medium-sized businesses across the U.S. and Canada.