A mid-sized food and beverage company was a successful operator in the Pacific Northwest and was seeking to grow through strategic acquisitions. The controlling shareholders did not wish to dilute their ownership interest, so additional third-party equity capital was not a desired solution.
A E78 professional negotiated a 2-year, $25 million credit facility that would allow the company to quickly execute acquisitions for cash, then convert acquisition borrowings to secured term debt. Bank covenants were geared toward key drivers so as not to constrain the company’s ability to either borrow or grow. Additional benefit was realized through the renegotiation of merchant processing and ancillary bank service fees.
Company management was able to quickly execute on a number of strategic acquisitions that allowed them to more than double locations and enterprise EBITDA in 2 years. Additionally, management vertically integrated to control food quality at all locations. The owners benefited from the enhanced enterprise value without dilution of ownership or control and both protected and enhanced their brand.