The case study below highlights how we worked with a value added distributor of specialty pavement products to refinance their existing debt, support growth and facilitate the sale of their business.
The company was in high-growth mode and actively seeking to expand into new markets. However, their existing financing constrained them, as it was made up of high-yield debt products that did not adequately correspond to their asset base. The company came to The Credit Junction to refinance their facilities and unlock liquidity capital captured in AR, Inventory and M&E.
By leveraging our loan to increase revenues and further establish themselves in the regional market, the company drew increasing attention from competitors. Within a year of their relationship with The Credit Junction, the company was acquired by a larger competitor at an attractive EBITDA multiple.
ABOUT THE COMPANY
HQ Location: South Atlantic, United States
In Business For: Nearly 10 Years
Annual Revenues: $5M Management: Experienced leadership, but new to pavement industry
Customer Base: Supplier to commercial pavers and builders
CHALLENGES FOR THE COMPANY
Large A/R Balance: Company A/R balance was disproportionately high in comparison to sales due to their recent rapid growth phase.
Over Leveraged: Company was paying high rates to borrow short-term capital needed to fund their growth.
Seasonal Business: Company had much slower sales during Q1 than the rest of the year.
Working Capital: Company wanted to grow its business with additional equipment. Company also wanted to rationalize its capital stack.
THE TCJ SOLUTION
The Credit Junction worked closely with the company and its management to craft a financing solution that met both their short and long term needs.