Sweetening the Deal

The Situation

Following strong sales over the last few years, Island Desserts, a specialty dessert company, wanted to launch a frozen product line as part of an ambitious growth plan. After securing senior debt, the company still needed more funding to accomplish this.

The BDCRI sweetened the deal by providing a $350,000 junior subordinated term loan.

About the Opportunity

Robert Leavitt established Island Desserts after acquiring the assets of another dessert company in 2003. While he moved the company from Rhode Island to Walpole, Mass., most of his 60 employees remained with him.

Bob then assembled a team to propel the company forward. Key among them were a new head of R&D and a sales manager. Both people brought the skills needed to succeed in the style sensitive specialty dessert business.

To reach a wider market, Bob and his team recognized that the company needed to offer frozen desserts to independent food producers. To achieve that goal, it needed funding for working capital, capital investments, and marketing.

Coastway Credit Union provided the senior financing, and asked the BDCRI to fill the funding gap, which, because it was subordinated debt, would help improve the balance sheet and provide the company with all the funding it needed.

Why the BDCRI Got Involved

We provided the supplemental funding, in the form of a six-year, $350,000 subordinated loan, because:

1. The fragmented specialty dessert business means there is opportunity for growth.
2. Bob and his team have a strong growth plan and the proven ability to execute it.
3. Production synergies and an independent distributor network will let the company operate lean.