Celtic Capital Funds Buyout for Contentious Owners
The Company
This is a Massachusetts-based precision machine shop utilizing the latest technology to deliver high-value machining, assembly and brazing services to customers in numerous industries including Defense, Automotive, Medical, Aerospace, HVAC and Transportation.
The Situation
The two main shareholders were at odds with each other. The majority shareholder believed that the Company’s problems and losses were a result of the efforts of the minority owner. The majority owner wanted to get back to the core business and focus on the bottom line, so he reached a deal with the minority owner to buy him out.
The Solution
The lender financing the accounts receivable, and inventory brought in Celtic Capital to finance the equipment which would fund the buyout. As both the majority and minority shareholders were also partners on the building in which the Company was housed, our biggest challenge, given the contentiousness between the owners, was getting a Landlord Agreement signed. We worked through the issue and provided a $616,000 Equipment-Only Loan which, when coupled with the other lender’s facility, provided the funds to pay off the Company’s existing bank line and a couple of other small loans, and fund the buyout agreement.
The Result
The existing owner brought in someone to help run the Company. Both are bullish on what they can do this year and expect bottom line results to be 15%-20% over the COVID years.
About Celtic Capital
Companies looking for working capital to cover operating expenses, fund growth, increase buying power and take advantage of vendor discounts and rebates turn to Celtic Capital. With an appetite for the more complex transactions, Celtic Capital has a history of success in crafting creative, flexible asset based financing solutions from $500,000 to $5 million with no financial covenants.
As an independent lender, working with companies nationwide, Celtic Capital is willing and able to alter price and deal structure and expand lines of credit to handle its clients’ increased revenues; and when cash flow is an issue, will look toward providing an inventory facility to help offset lost cash flow.
If you know of, or are, a business in need of non-traditional financing, contact Mark Hafner at 800.742.0733 or mhafner@celticcapital.com, or visit us at www.celticcapital.com.