Republic Partners with Equity Sponsor to Provide $4.5MM ABL Facility

A private equity group chose the Republic Business Credit West Coast team to complete a leveraged food manufacturer buyout. The facility was provided to a California-based natural food manufacturing company that sells into Whole Foods, Sprouts and several boutique stores across California.

The private equity sponsor originally acquired the company through a leveraged buyout of a distressed company. The product category, management team and significantly reduced price made it a rare opportunity to complement their portfolio of companies. Republic partnered with the equity sponsor to provide an asset-based loan in less than thirty days.   

Republic Business Credit provided a $4.5 million Asset Based Loan with an accordion up to $7 million to support the company’s projected growth. In addition to the revolver, Republic structured a $3 million equipment term loan that leveraged their existing manufacturing equipment and a $1 million sub-limit for new capital expenditures.

Republic’s COO, Matthew Begley said, “We are excited to partner with the management team and the private equity fund to support the manufacturers growth in the food space.”

Republic’s initial funding provided for the necessary runway to implement the full turnaround plan while reducing the size of the check the fund needed to close the transaction. After just a few months since commencing their facility with Republic, the company is on pace to be cash-flow positive for all of 2020. 

“Republic is a proud supporter of the manufacturing industry and relieved to see about 22,000 jobs were created per month in 2018, nearly 500,000 in the past 30 months alone according to a recent Forbes article”, says Robert Meyers, President of Republic, “Manufactures often turn to Republic over the cumbersome SBA 504 or SBA 7A Loan process, ideally, if time permits the entrepreneur can even utilize both.”