Acquisition

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).

The Company:

A single-asset real estate holding company owned by a prominent carwash company in the Midwest. The carwash company is just one subsidiary of a broader investment company with interests in a multitude of industries.

The Financing Situation:

The Company had an executed purchase agreement on a property that it intended to acquire and construct an expansionary carwash location under its existing brand. The Company needed 100% upfront debt financing to close on the acquisition quickly and working capital for the entitlement process before seeking construction financing.

The Solution:

SG underwrote the real estate as well as the personal guarantees of the two founders, who maintained significant outside personal liquidity as well as equity in various real estate and business holdings. The strong personal balance sheets of the guarantors allowed SG to be aggressive with its advance rate on the real estate collateral (>100% LTV when including additional working capital provided) and SG’s capital was non-dilutive.

This transaction underscores SG’s ability and willingness to structure and underwrite collateral based / guarantor-based loans. While many of you know us as a cash flow-based lender, we now provide special situation (balance sheet) loans requiring creativity, flexibility, and speed to close. We also have a strong interest in providing customized solutions for liquidity constrained high net worth entrepreneurs.

Target Company:
Oilfield service provider that specializes in pipeline construction and the fabrication of modularized production facility equipment to midstream operators as well as exploration and production (E&P) companies that operate in the Permian and Eagle Ford Basins.
Financial Profile: Revenue: $50mm | EBITDA: $8mm

Acquiring Company:
An energy-focused holding company that provides financial, technical, operational and strategic management services to its subsidiaries across the globe.

Financing Situation:
Target Company management wanted to sell its oilfield services business for liquidity and to focus on larger infrastructure projects. Given the timing of new infrastructure projects, Target Company management wanted to sell its oilfield services business within 30 days. Target Company management had a personal relationship with Acquiring Company management and presented an exclusive, quick closing acquisition opportunity. Since the Target Company is asset light (primarily just accounts receivable with a progress billing element), an ABL facility was insufficient to close the entire deal and a bank offering a revolver + cash flow term loan would have taken too long.

The Solution:
SG Credit Partners (“SGCP”) was able to get comfortable with the deal based on previous lending experience with Acquiring Company management, strong historical financial performance of Target Company, and industry tailwinds. SGCP provided a $5.0 million bifurcated credit facility to close the acquisition quickly (within 3 weeks) and provide additional working capital. SGCP’s $5.0 million bifurcated credit facility consisted of a $2.0 million interest-only loan and a $3.0 million term loan. SGCP provided this structure to close the acquisition quickly and bridge the Company to a new senior lender. The new senior lender will refinance SGCP’s $2.0 million interest-only loan and SGCP will then subordinate its $3.0 million term loan under its typical second lien structure.

The Company:
Publicly held (OTC) provider of telecom & engineering services and solutions.
Financial Profile (Consolidated): Revenue: $32mm | EBITDA: $2.7mm

The Financing Situation:
The Company was seeking subordinated debt to help finance the acquisition of a telecom staffing company that would expand its geographic footprint and service offerings. Given the consolidated EBITDA profile (<$5mm) of the business, traditional mezzanine debt was not an option and the Company preferred a non-dilutive subordinated debt option that could close quickly.

The Solution:
Super G was able to quickly get comfortable with the acquisition synergies, the Company’s management team, and favorable industry momentum to approve a $1.15mm subordinated term loan that would fill the purchase price funding gap. Super G worked in partnership with Prestige Capital Corporation, who provided AR financing, to close the accretive acquisition.

For more information on Prestige Capital Corporation, please contact:
Stuart J. Rosenthal
Executive Vice President
SRosenthal@prestigecapital.com
201-944-4455
www.prestigecapital.com

The Acquirer:

Simply Color Lab, one of the nation’s top professional photography printers.

The Target:

ShootQ, a SaaS company that provides a complete studio management system made especially for photographers. ShootQ’s virtual management software assists its professional photography users in all facets of the sales process from tracking prospective clients, contract and payment management, to client product delivery, and much more.

The Financing Situation:

Simply Color Lab could not obtain enough availability from its senior lender to purchase ShootQ and fund growth.  Simply Color Lab needed a lender that would underwrite the monthly recurring revenue and cash flow of ShootQ rather than focusing on its assets, or lack thereof.  As with all acquisition deals, a quick close was required as well.

The Solution:

Super G was able to get comfortable with ShootQ’s subscriber statistics and monthly recurring revenue to finance a majority of the purchase price with the remainder coming from Simply Color Lab as equity.  Super G structured a non-dilutive 24 month solution for the acquisition that should be highly accretive as it allows Simply Color Lab to further expand its product and service capabilities to provide its customers with a quality management program that will create more efficient business practices and significant cross-selling opportunities.

The Acquirer:

Independent sponsor seeking 2nd lien capital for acquisition financing.

The Target:

Franchisor of after-school enrichment programs (math, reading, writing, and more) for kids ages 5 – 12.

The Financing Situation:

There was a shortfall between the Target’s purchase price and the equity + senior debt raised by the Acquirer.

The Solution:

Super G was able to quickly get comfortable with the Acquirer’s background, recurring revenue business model, growth plans, and the existing cash flow of the business to finance the gap in the acquisition. Super G structured a non-dilutive solution that was subordinated to the Acquirer’s regional bank. The financing allowed for a successful closing within a few weeks of being approached by the Acquirer.

About Us:

Super G Funding is an alternative lender with over $100MM in committed capital specializing in residual and cash flow loans.  Our mission is to fill the credit void in the lower middle market by providing non-dilutive, senior and subordinated debt solutions to businesses in need of financing for working capital, growth capital, acquisition capital, or special situation financing.  We lend up to $5MM per transaction in the form of a fully-amortizing cash flow term loan with a 6-36 month term (pricing contingent on credit profile).  We are a small, but nimble team and highly responsive. We have over 100+ borrowers around the country and are able to give quick responses and close deals rapidly.