The company had been searching for strategic acquisitions and methods of expansion to both support its existing customer base and broaden its service and format offerings. After Arandell sourced a corporate asset spinoff in Walton, KY, its bank invited CapX into the asset acquisition opportunity due to CapX’s prior financing relationship with the company and good split lien working relationship with the bank. Arandell simultaneously sought a leasing solution for an automated co-mailer unit.
CapX offered Arandell a tailored capital lease financing with fixed monthly payments of four years and a bargain purchase option. Arandell keeps the depreciation for tax purposes and has a hedge against rising interest rates. CapX also provided a borrower-friendly advance rate that met Arandell’s capitalization plans. A second lien on all other assets allowed by the bank mitigated CapX’s initial risk exposure.
“We were pleased to be invited under the tent again with Arandell and their bank. CapX is always attracted to focused, discipline management that has a sound strategy and executes. The second plant location for Arandell will create a number of revenue opportunities and put the company in a new competitive landscape,” remarked Jeffry Pfeffer, managing partner at CapX Partners.