Using Equipment To Finance an Acquisition
The Company
This Company is a Colorado-based manufacturer of plant-based food products (Company #1.) Its products are non-seasonal and consist of items including spreads, butters, hummus and dips.
The Situation
Company #1 is about 20 minutes away from another plant-based food manufacturer (Company #2.). The owners of both entities know each other well and are friendly. When the owner of Company #1 was afforded an opportunity to acquire Company #2, he was referred to Celtic Capital for an equipment loan to finance the acquisition.
The Solution
The equipment appraisal revealed significant value in Company #2’s equipment, further bolstered by the unencumbered equipment of Company #1. The combined value enabled Celtic Capital to provide a $790,000 equipment loan to seal the deal.
The Result
Celtic Capital’s equipment loan was the final piece of the acquisition. Timing was key as the closing of the acquisition occurred on the funding of the equipment loan.
Upon funding, Company #2’s bank loan was paid off and the combined entity had money for working capital. The owner is currently assessing ways to remove redundant overhead and with his forward-looking vision, is confident that the combined entities will do very well.
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.