When a portfolio company of a California-based private equity firm sought to refinance and upsize its existing asset-based lending facility, the company partnered with Republic Business Credit, which provided a $5 million direct-to-consumer asset-based loan with full availability on retail inventory, wholesale inventory, merchant accounts and direct to consumer proceeds.
The portfolio company is a national confectionary manufacturer that goes to market through an omnichannel approach. The company interacts with customers across its retail, e-commerce, direct-to-consumer and wholesale footprints. The company provides products across its chocolate, bakery, candy and branded products, as well pre-packaged offerings.
The California-based private equity firm acquired the confectioner and sought a new lending partner to complement its management team and growth strategy. The portfolio company sought additional support for its 50-plus retail storefronts and more investment in e-commerce opportunities.
While the COVID-19 pandemic has presented a foot traffic challenge, the private equity firm and the management team at the confectioner leveraged the opportunity to strengthen storefront leases and expand into high growth areas around the United States.
The facility from Republic Business Credit increased availability across the confectioner’s warehouse and retail inventory locations. Republic Business Credit worked alongside the private equity sponsor and management team to build covenants that addressed the seasonality of the business while recognizing the significant capital contributions already invested toward the company’s success. Republic Business Credit provided more availability, cheaper pricing and a better utilization-based fee structure in the hope of reducing borrowing costs during off-season periods.
“As the private equity firm was evaluating new lending relationships, they were impressed with our valuable insight and experience in the consumer products industry,” Robert Meyers, president of Republic Business Credit, said. “We took the time to truly understand their confectionary seasonal business model and structure a customized credit facility to meet their borrowing needs.”
“We are pleased to build on the successful turnaround story and provide the necessary credit facility to further expand the company’s retail, wholesale and e-commerce business strategy,” Jason Carmona, executive vice president and western regional manager at Republic Business Credit, said. “We are excited to support the continued growth of the company in years ahead and to continue assisting with additional portfolio companies of the private equity group.”
