Deal Closings

SG Credit Profile: SaaS

The Target: Corporate travel and entertainment software, data integration, and business intelligence (BI) provider for large enterprises and travel management companies.

The Buyer: Enterprise software operating company backed by private equity.

The Financing Situation: The Buyer was seeking a debt facility to supplement the equity contribution made to purchase the Target.

The Solution: SG structured a $4 million term loan to support the closing of the acquisition. SG was able to get comfortable based on the Company’s recurring revenue, strong SaaS metrics, experienced management team, and the strength of the Buyer.

SG Credit Profile: SaaS

The Company: Provider of procurement and spend management software to mid-market businesses.

The Financing Situation: The Company had legacy bank debt from a previous acquisition that was underwritten primarily by cash flow, not recurring revenue. The Company’s growth plan called for re-investing all excess cash flow into growth, which conflicted with the profitability-based covenants of its existing credit facility. The existing bank lender was unable to re-underwrite its loan based on recurring revenue so sought to exit the loan at maturity. The Company needed an experienced tech lending partner who better understood its SaaS business model and could scale with the Company as it executed on its growth objectives.

The Solution: SG structured a $2.75 million term loan to pay off the Company’s existing lender and provide additional liquidity to support its continued growth plan. SG was able to get comfortable based on the Company’s recurring revenue, strong SaaS metrics, and experienced management team.

SG Credit Profile: Cash Flow

The Company: A family-office backed provider of mental and behavioral health services catering to Medicaid patients.

The Financing Situation: The Company was experiencing high growth due to a combination of strong demand and positive regulatory tailwinds. To capitalize on this growth, the Company sought a non-dilutive debt facility to fund expansion opportunities requiring hard upfront costs.

The Solution: SG was able to underwrite the history of profitability, variable cost nature of the business, and positive growth trends. SG structured a $5.0 million credit facility to provide the Company with the immediate capital it needed to open new locations in its pipeline as well as a delayed draw component to scale with the Company.

SG Credit Profile: Cash Flow

The Company: An entrepreneur-owned specialty delivery service catering primarily to the medical industry.

The Financing Situation: The founder of the Company needed growth capital to fund an emerging but unrelated new venture. The founder had previously signed an LOI with another lender that re-traded key deal terms during diligence. Faced with immediate time constraints, the founder needed a new debt provider that could execute quickly and provide certainty to close.

The Solution: Although the new venture on its own could not yet support a debt facility, SG was able to mitigate this by underwriting the cash flows of the Company. Given the Company’s positive growth trend, diverse customer base, and historical cash flow, SG was able to provide substantial covenant flexibility and permitted growth capital advances to fund the new venture. SG closed within three (3) weeks of signed term sheet.

SG Credit Profile: Technology (SaaS)

The Company: A leading online invitation and digital greeting card subscription platform.

The Financing Situation: The Company was seeking non-dilutive growth capital to acquire VidHug, an easy-to-use video platform that enables you to request, collect, and combine videos to create a personalized and meaningful montage for celebrations and holidays.

The Solution: SG was able to get comfortable with the transaction due to the Company’s committed management team, consistent financial performance, recurring revenue metrics, and overall industry trends. SG’s solution allowed the Company to complete an accretive acquisition without dilution and Punchbowl leveraged the acquired platform to launch Memento.com. The Company now offers a comprehensive technology platform for celebrations, holidays, and meaningful life memories.

To learn more, please click here to view the full press release.

For more information about this announcement, please contact Kristen Elworthy at Seven Hills Communications (punchbowl@sevenhillscommunications.com).

SG Credit Profile: Technology (SaaS)

The Company: Provider of B2B and B2C telephony-related security services.

The Financing Situation: The Company was seeking non-dilutive growth capital to execute on sales & marketing initiatives and have the ability to close quickly on accretive acquisitions.

The Solution: SG was able to get comfortable with the transaction due to the Company’s consistent growth in MRR, strong retention metrics, profitability, and experienced management team. Within 3 weeks from signed term sheet, SG provided a $2MM growth capital facility with $1.5MM funded and an additional $500K tranche available based on continued growth.

The Company: Midwest-based specialty retailer of mattresses and accessories. The Company sells through 50+ stores as well as its Company-owned DTC eCommerce channel.

The Financing Situation: The CEO was looking to complete a management buy-out of the Company. The business was owned by a family office that acquired it through a restructuring a few years ago. After negotiating the purchase price, the management team needed additional capital to supplement their equity contribution to complete the acquisition and provide sufficient working capital. A traditional inventory borrowing base alone would not generate enough liquidity to fund the acquisition and support the working capital needs of the business.

The Solution: SG provided a comprehensive solution by funding two tranches of term loans. The first tranche was supported by a borrowing base (advances against inventory) and required interest-only payments until maturity. The second tranche was structured based on the cash flow of the business with required interest and principal payments based on a 36-month amortization schedule. By using a hybrid approach of leveraging the company’s assets and cash flow, SG was able to provide the needed liquidity and did not require warrants or other equity instruments, which would have diluted the buyer’s ownership.

SG Credit Profile: Technology (SaaS)

The Company: Software as a Service platform that provides AI-powered marketing analytics. The platform provides an end-to-end suite of tools that allow clients to research and measure their marketing investments and maximize ROI.

The Financing Situation: The Company’s existing bank credit facility was no longer a strategic fit and the Company was seeking additional non-dilutive capital to help execute on its growing sales pipeline.

The Solution: SG was able to get comfortable with the transaction due to the Company’s strong management team, blue chip customer base, enterprise value, and its supportive cap table. SG provided a $2MM senior secured facility with an interest-only period and modest amortization to payoff the bank and support the Company’s ARR growth with non-dilutive capital.

The Company: Digital signage SaaS platform enabling SMB & enterprise customers to easily create and manage content in real time on any number of displays, anywhere in the world. Ownership: Founders & Management. Run Rate ARR: $3mm+.

The Financing Situation: The Company had been bootstrapped with founders’ capital to date and was seeking a non-dilutive capital solution to (i) continue to grow ARR and in turn enterprise value prior to an institutional equity raise and (ii) bridge to profitability.

The Solution: SG was able to get comfortable with the Company’s earlier stage revenue due to the Company’s proven technology with enterprise clients, strong SaaS metrics, and the founders’ successful track record and continued support of the business. SG provided a $2.2mm senior secured facility with an interest-only period until the Company reaches profitability.

The Company: Privately held independent registered investment advisor (RIA) that provides wealth, asset, and business management services to high-net-worth individuals and families. The Company has a variety of unique services not typical of traditional RIAs including access to alternative investments.
Assets Under Management: $300MM+
 
The Financing Situation: The Company was experiencing rapid growth in AUM and planned to go to market to find a strategic partner that could provide the financial and operational support needed to continue to scale the business. Ahead of that transaction, Company management wanted to secure a non-dilutive loan to help finance operational burn and extend runway. The capital would allow the Company to continue to add AUM and give it time to improve enterprise value ahead of a transaction.
 
The Solution: SG was able to get comfortable with the transaction due to the Company’s sticky recurring revenue business model, projected growth in run-rate revenue supported by a strong pipeline, the enterprise value of the Company, and its clear path to profitability. SG was able to close the transaction within 10 days of a signed term sheet.