Debt Recapitalization Advisory
Highly successful, 2nd Generation family-owned business decides to explore a RECAPITALIZATION as a way to provide personal wealth diversification and increased investment in new business opportunities.The company specializes in application software serving over 10,000 clients both domestically and internationally across a variety of industries.
Situation – “Dividend Recapitalization & Growth Capital”
The company has traditionally avoided financial leverage and had little to no debt when Schwartz Heslin Group started its process. The company wished to secure financing to:
1. Secure Growth Prospects
- Build and develop a pipeline for early adopters.
- Secure competitive positioning for global expansion and scalability.
- Maintain access to capital for regional and/or strategic acquisitions to accelerate growth.
2. Meet Shareholder needs
- Allow for increased shareholder investment in new business opportunities.
- Provide personal wealth diversification for shareholders.
- Meet the liquidity needs of a 3rd generation family ownership transition.
The SHG PROCESS
- Worked with management to determine key qualifications and parameters of a capital raise.
- SHG met with major banks and made sure the company’s non-negotiable needs were clearly presented.
- SHG made sure lenders understood the solidity of the business’s growth and secure earnings future.
- We solicited and confirmed interest, reviewed term sheets, commitment letters and performed negotiations on behalf of the company.
- We ensured shareholders knew the possible costs of removing covenants and guarantees and moving outside the conventional term loan format.
Together we helped create a scenario where the chosen syndicate of lenders gave our client the flexibility and freedom from certain covenants and pledges that typically come with private lending at high rates with a package of conventional bank rates. SHG continues to work with the client in an advisory capacity.