Leveraging Assets to Fund an Acquisition
The Company
The Company is a California-based manufacturer of precision machined products using metal alloys and plastics for industrial and commercial applications.
The Situation
In an effort to leverage the business assets to help in the acquisition of this Company, one of our long-time referral partners (working as an intermediary and representing the buyer) brought the deal to us.
The Solution
The buyer was looking to purchase the business assets and the real estate. We proposed on the Accounts Receivable (A/R) and Equipment. While the equipment appraised for less than what was expected, the deal still worked because of how the payments to the seller were structured. Financing for the real estate was taking much longer than our deal so the seller agreed to do the sale in steps and the deal was re-structured. We closed on the business assets first ($1,500,000 A/R Line of Credit and $1,440,000 Equipment Loan) and the sale of the real estate will close later on.
The Result
Prospects for our client are good. The Company has been around awhile and has new contracts coming in 2023. The larger goal is to combine this Company with similar companies also owned by our client which will lead to significant economies of scale.
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.