Concord Financial Advises PE Fund in Obtaining $11.1 Million
A private equity fund acquired a California-based manufacturer of aftermarket automotive condensers and coils in 2009. Within a year of the acquisition, the company lost its largest customer which accounted for 25% of sales, negatively impacting profitability and EBITDA. The equity group supported the business during the downturn with additional capital, but the incumbent lender decided to not renew the credit. Despite the fact that the private equity fund was familiar with the senior debt market and had multiple relationships, it recognized the value of having an outsourced debt placement agent and engaged Concord Financial Advisors to run the process.
Concord performed a situational analysis and prepared a detailed memorandum highlighting the successful ongoing turnaround, strong collateral base and committed ownership. Concord was able to leverage its relationship with a nationally recognized asset-based lender and secure an aggressive structure for the company, including an over advance and quarterly covenants.
The private equity fund obtained $11.1 million in senior secured credit facilities consisting of a $10 million revolving line of credit, a $376,000 M&E term loan and a $624,000 overadvance. Proceeds were used to refinance existing debt and support working capital.
“Concord allowed us to run a streamlined marketing process of our credit. Even though we had relationships with most of the viable lenders, Concord was able to act as an effective intermediary and secure an above market deal for our portfolio company. We are extremely satisfied with our new senior lender,” said the vice chairman of the New York-based private equity fund.
Concord Financial Advisors is a financial intermediary specializing in private placements of senior and subordinated/mezzanine financing for lower middle-market companies.