Affiliate Companies Turn to Celtic Capital to Realize Its Turnaround Plan

The Company
This deal involved two affiliate companies in Washington under common ownership. One of the companies manufacturers and distributes rock crushing equipment (components and parts); the other manufactures and sells cast metal parts used in the industry.

The Situation
One of the companies was self-sufficient and had no financing needs. The other company’s bank chose not to renew its credit line due to concern over prior managers’ attempts to sabotage the business for personal gain. Fortunately, the owner recognized what was going on before any damage had been done and replaced the individuals involved with a new, stronger management team. The exiting bank referred the owner to Celtic Capital.

The Solution
Both companies were brought into the deal as assets from both were required to make the deal work. New management had only been with the troubled company for a few months and was attempting to get things turned around and cleaned up. Though banks found it difficult to look past the prior bad acts, Celtic Capital recognized the efforts and positive approach taken by the owner and provided the business with a $1,000,000 A/R Line of Credit and a $250,000 Inventory Line of Credit to pay off the bank and provide additional working capital in support of the new team’s turnaround plan.

The Result
Though there was an equipment component to the deal, the owner opted not to move forward with it. The only other piece in play was to get the real estate re-financed. Mark Hafner, Celtic Capital’s President and CEO, referred the business owner to a resource for the re-fi. With that in progress, and all other issues resolved, the business is running better and the owner is seeing the results of the turnaround plan.