Founders Advantage Capital entered into a $75 million senior secured credit facility with Sagard Holdings. Sagard Credit Partners will be the lender.

The proceeds from the facility will be used to repay the company’s existing senior indebtedness, to complete further acquisitions and for general corporate purposes. The initial draw at closing under the senior facility is $42 million, with additional draws subject to Sagard Holding’s further approval. The senior facility is expected to close on or about June 16, 2017.

“After considering various capital alternatives, we believe we have found a strategic partner that will be transformational for our long-term growth and success. The strategic relationship with Sagard Holdings provides us with the liquidity and financial flexibility required to prudently execute our business plan of investing in scalable and defensive founder-run companies. The Sagard Holdings team shares our view of building long-term shareholder value through a diverse portfolio of partnerships in founder run, not for sale, high free cash-flow, stable and well managed premium companies,” said Stephen Reid, president and CEO of Founders Advantage.

The senior facility will have a five year term and will bear interest at a rate of LIBOR plus 700 basis points (with a 1.00% LIBOR floor), payable quarterly on March 31, June 30, September 30 and December 31 each year. The senior facility will be secured by a first priority lien on all present and after-acquired assets of the corporation. The borrowings are denominated in U.S. dollars, and the corporation anticipates implementing a foreign currency hedging program to reduce currency risk.

The corporation intends on repaying its existing credit facility with Alberta Treasury Branches with the proceeds of the senior facility.

Sagard Credit Partners, part of Sagard Holdings, is focused on providing debt capital to middle market companies in Canada and the U.S.

Alberta-based Founders Advantage as developed an investment approach to create long-term value for its shareholders and partner entrepreneurs by pursuing majority interest acquisitions of cash flow positive middle-market privately held entities.