Branded Bicycle Manufacturer and Marketer
$25 million Revolver and Term Loan
A Michigan based private equity group was attempting to purchase a US based manufacturer and marketer of bicycles. Francisco arranged for an asset based lender along with another bank to extend a $25mm facility with a significant overadvance against collateral.
The overadvance was possible in the face of stagnant cashflow based on the appraised value of the intangible brand name. Six months later the lenders increased the facility to $50mm to allow for the acquisition of a Chinese bicycle manufacturer. Another overadvance was facilitated based on the synergies that the acquisition allowed. A related $7mm facility was arranged for one of the company’s retail customers to factor the bicycle manufacturer’s receivables. This allowed the client to take the training wheels off and increase their sales significantly, further leveraging the acquisition.
Written By: fcateamDate Posted: 1/26/2011Number of Views: 2716