Snack Food Manufacturer Gets a Tasty Deal from Celtic Capital
This company is an Oregon-based manufacturer of snack food products, predominately flavored popcorn.
Starting in 2016, the company began having some issues stemming primarily from the realignment of its customer base. The culmination of the business then suffering significant losses was the company’s breaking bank covenants. At that point, the bank asked the company out.
Celtic Capital was referred in as we’re known for handling complicated deals…and this one was complicated; for many reasons:
- There was a real estate component (the bank held the mortgage on the building in which the company was housed)
- There were many lenders involved (a friendly group with subordinated debt that had to be partially re-paid at funding; an equity group who, when the company missed its first payment became unfriendly and wanted a pay-down before it would subordinate; and the state who had a blanket lien on all assets)
- The company (behind with trade creditors) needed excess funds put into the trade in order to realize its turnaround plan
Fortunately, the company had a very good CFO who, with our help, handled negotiations with all of the lenders some of whom were very demanding in their payoff requirements. The deal required quite a bit of back and forth for which Celtic Capital hung in and worked out a deal to everyone’s benefit. We provided a $2,617,000 facility consisting of a $1,250,000 Accounts Receivable Line of Credit, a $150,000 Inventory Line of Credit and a $1,217,000 Equipment Loan.
Celtic Capital’s facility enabled the owners to pay back all of its lenders and still gave the company the excess cash it needed for its trade creditors. The company is on track in its turnaround plan and expects 2018 results to come in as projected.
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.