Publisher of Test Prep Materials Passed Celtic Capital’s Test
The Company
The company is a New Jersey-based publisher of test preparation materials for grades K through 12 – both hard copy and via software licensing. Sales are made to public schools and public school districts.
The Situation
The company was in default of its bank loan so the bank made an agreement with the business owner to bring in a turnaround company. A new lender took out the bank and the old management team was replaced with new blood. New products were developed that unfortunately did not produce as expected. Revenues continued to decline to the point that two years later, a new CEO and management team took over and changed the outlook of the company so that it’s basically now a startup. The owner had been relying on a temporary credit line but wanted a more permanent working capital solution. With banks’ unwillingness to touch this deal, a consultant brought it to Celtic Capital.
The Solution
Every piece of material produced by the company has a separate copyright and by taking a lien on each one, we were able to back up the receivables and provide the company with a working capital line of $1,400,000.
The Result
With our Line in place and a new management team who has made quite a few adjustments, the books are clear and clean, and the company is no longer operating at a loss.