$1,000,000 Syndicated Term Loan for Management-Led Acquisition

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Problem: The CEO of a local manufacturer owned 10% of the business and had the opportunity to buy out a passive stockholder’s 90% share. Limited collateral availability prevented the company’s bank from fully funding the purchase price – leaving a $1,000,000 shortfall.

The Business Development Company had established an excellent working relationship with the senior bank through previous deals, and the bank’s officer referred the Company to the us to fill the gap. 

Solution: Working together, a mutually acceptable financing package was put together. The bank funded the lion’s share of the purchase price in a first security position. The BDC provided a $1,000,000 mezzanine term loan, dovetailing into the senior lender’s requirements (e.g. loan covenants).

The CEO gained 100% control of the business. Two years after the buyout, the Company’s strong financial performance permitted the CEO to prepay the BDC’s loan.