Consumer & Retail

Chicago, IL – June 7, 2022 – Stonegate Capital, a division of SG Credit Partners (“SGCP”), a family-office backed lender providing capital to lower middle market businesses and entrepreneurs, is pleased to announce the closing of a senior debt investment in Van Leeuwen Ice Cream, a leading brand of premium ice cream products in the U.S.

Founded in 2008 by brothers Ben and Pete Van Leeuwen and Laura O’Neil, Van Leeuwen began as a single ice cream truck and quickly grew into a nationally recognized brand known for its made-from-scratch dairy and vegan ice creams which are available online, in stores, and at 30+ scoop shops across the country. The company sources high quality ingredients and uses simple recipes to create the best ice cream for all.

“Innovation has been at the center of the company’s success having first ascended as a leader in ice cream, to the development of unique and wildly popular flavors, to the most recent launch of their ice cream bars,” said Dan McCallum, Director at Stonegate Capital. “Van Leeuwen’s approach to making the best products with the best ingredients was an ideal fit for our investment philosophy to support mission-driven market-leaders.”

“Stonegate Capital has been a valued partner since we started our relationship in early 2022.  They consistently show a deep understanding of the complexities and flexibility needed to assist a high-growth and innovative company in the ice cream space.  They have become an invaluable member of our extended team as we balance both our scoop shop and wholesale channels growth,” said Ben Van Leeuwen, CEO and Co-Founder of Van Leeuwen Ice Cream. 

Stonegate has significant experience investing in the emerging food and beverage space. Current and past investments include Clio Snacks, Country Archer Provisions, Purely Elizabeth, Simple Mills, Van Leeuwen, and Zevia.

About Van Leeuwen

Van Leeuwen is a leading brand of premium ice cream products in the U.S. Based in Brooklyn, NY, Van Leeuwen’s products can be found online, in stores, and at 30+ scoop shops across the country. Van Leeuwen is a mission-driven organization on a quest to make good ice cream from good ingredients that makes you feel good. For more information and to browse Van Leeuwen’s products, please visit www.vanleeuwenicecream.com.

About Stonegate Capital / SG Credit Partners

Stonegate Capital, a division of SG Credit Partners (“SGCP”), is a family-office backed lender providing capital to lower middle market businesses and entrepreneurs requiring tailored credit solutions. Stonegate and SGCP provide structured credit solutions ranging from $2 Million – $20 Million primarily via three credit verticals: Software & Technology, Consumer Products, and Lower Middle Market. The firm has collectively deployed over $500MM+ of capital to lower middle market businesses across a variety of industries. For more information, please visit www.sgcreditpartners.com.

Stonegate Capital is excited to announce it has closed on a senior debt investment in Clio Snacks. Founded in 2015 by Sergey Konchakovskiy, Clio offers a line of handheld Greek Yogurt Bars and Granola & Yogurt Parfait Bars that combine the benefits of whole milk Greek yogurt – which are high in protein and probiotics – with an irresistible cheesecake-like texture and decadent dark chocolate coating. Clio recently launched three new innovative additions to its refrigerated, handheld bar portfolio: Chocolate Greek Yogurt Bars, Vanilla Less Sugar Yogurt Bars and Vanilla Almond Granola & Yogurt Parfait Bars.

“Clio is an innovative fresh snacking brand and we are ecstatic about our partnership with the Company. We pride ourselves on aligning with the high-growth, entrepreneurial backed market, and this thesis aligns perfectly with Clio’s exciting market disruption in the healthier for you snacking space” said Jordan Hoppe, Director at Stonegate Capital. “We are certainly looking forward to being a collaborative partner in Clio’s already impressive growth story.”

Stonegate Capital, a division of SG Credit Partners, is a private credit investment firm with a unique approach to providing financing solutions to established lower middle market businesses with a heightened focus on emerging brands within the food and beverage, consumer products, and e-commerce spaces.  Recognizing that each company has unique and specific needs, Stonegate focuses on aligning senior credit facilities to the growth and liquidity requirements of a business.

Please visit the Company’s website for additional information:

www.cliosnacks.com

For additional details regarding Stonegate Capital’s investments, please contact us directly at:

www.sghcap.com

Jordan Hoppe: 312-971-8136 | jhoppe@sghcap.com

Evan Waggoner:  336-512-6388 | ewaggoner@sghcap.com

Dan McCallum: 312-971-9445 | dmccallum@sghcap.com

Ryan Woody: 312-971-1551 | rwoody@sghcap.com

Andrea Hedrick: 773-562-8477 | ahedrick@sghcap.com

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.

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.

The Company: Sponsor-backed e-tailer of aftermarket auto parts focused on a niche of the broader aftermarket industry. The Company sells through its Company-owned DTC eCommerce channel as well as through 3rd party marketplaces. Revenue: $37MM | EBITDA: $1.4MM.

The Financing Situation: Over the past few years a series of events negatively impacted the financial performance of the Company including a heightened tariff environment in 2019. The Company was forced to recapitalize its balance sheet and restructure operations to right-size the business. The Company successfully executed its recapitalization in early 2020 by securing a temporary bridge working capital facility with an opportunistic lender. The bridge loan was off strategy for the new lender so it was seeking to exit the credit.

The Solution: SG was able to get comfortable with the Company’s proven operational turnaround, proforma profitability, inventory and receivable working capital assets, and supportive stakeholders including the sponsor, CEO, and key vendors. SG’s unitranche loan structure included a $1.4MM collateral based, interest-only term loan A driven by a borrowing base (AR and inventory) and a $700K term loan B structured around proforma cash flows. SG was able to close the deal within 2 weeks of a signed term sheet.

The Company: Southeast based consumer credit and identity solutions software-as-a-service provider, majority owned by founder & CEO Ed Margolin. Visit Fraud Protection Network’s website to learn more.

The Financing Situation: The Company had previously financed its growth with a combination of equity and convertible notes.  With new product rollouts and strategic partnerships in 2020 creating accelerated growth, the Company was seeking non-dilutive capital to finance its working capital needs and extinguish convertible notes in order to preserve equity.

The Solution: SG was able to quickly get comfortable with the transaction due to the rapidly growing monthly recurring revenue, strong industry retention rates, and overall financial health of the company.  SG structured a covenant-lite $2.5MM loan with a tailored repayment schedule around cash flow that bought out the convertible notes to avoid further dilution and provided additional liquidity for the Company to continue its growth trajectory without equity support.

This transaction demonstrates SG’s ability to underwrite SaaS / recurring revenue loans. While many of you know us as a cash flow based lender, we now provide non-dilutive SaaS / recurring revenue loans requiring creativity, flexibility, and speed to close. Click HERE for a link to our SaaS / recurring revenue one pager to learn more.

The Company:
Privately owned wholesaler of licensed toys, collectibles, and housewares.
Revenue: $22mm | EBITDA: $2.8mm

The Financing Situation:
The Company needed additional working capital to purchase inventory in advance of the holiday busy season. The Company has a flexible asset-based credit facility from FSW Funding (“FSW”), however, given the seasonality of revenue, the Company’s current accounts receivable balance did not provide sufficient availability to purchase the inventory needed for its busy season.

The Solution:
Super G was able to quickly get comfortable due to historical financial performance, strong management team, and funding into the Company’s busy season. Super G provided a non-dilutive $1.0mm second lien loan behind FSW with repayment structured around seasonal cash flow, which enabled the Company to purchase inventory to meet seasonal demand. The transaction closed in less than two weeks.

For more information on FSW Funding, please contact:
Adam Keck
Senior Vice President
akeck@fswfunding.com
480-440-2496
www.fswfunding.com

The Company:
Family office backed designer, marketer and manufacturer of specialty dancewear.
Revenue: $18mm | EBITDA: $2.4mm

The Financing Situation:
The Company had recently established an inventory based credit facility with Crossroads Financial to fund general working capital needs and was in need of additional liquidity during its low season (April to October) for inventory purchases and general operating expenses. Given the recent inception of the relationship and low inventory asset base due to seasonality, Crossroads Financial was not comfortable providing an out of season over-advance stretch piece.

The Solution:
Super G was able to get comfortable with the business due to historical performance, strong recurring customer base and consistent seasonal trends. Super G provided a non-dilutive second lien loan with repayment structured around seasonal cash flow, which successfully bridged the Company through its low season to busy season collections (November – February). The transaction closed in less than two weeks.

For more information on Crossroads Financial, please contact:
Lee Haskin
CEO
lhaskin@crossroadsfinancial.com
561-997-8626

Jarrett Levy
Business Development Officer
JLevy@crossroadsfinancial.com
561-997-8627

The Company:
Privately owned manufacturer of premium artisanal Greek yogurt, handmade from a proprietary family recipe.

Financial Profile: Revenue: $21MM | EBITDA: $2MM

The Financing Situation:

The Company had engaged a middle market investment bank to secure a large round of growth equity capital. During this process, the Company required additional working capital to help complete the opening of a new manufacturing facility that would increase production capacity and in turn boost revenue, leading to a much higher valuation.

The Solution:
Super G provided a 2nd lien, non-dilutive $2.1MM term loan behind the Company’s existing bank credit facility, which consisted of an accounts receivable-based line of credit and an equipment loan. Super G quickly closed its loan which enabled the Company to complete the transition to its new facility and created more time for the Company’s investment bank to run a complete process and secure the best deal possible. Super G worked in partnership with the Company’s bank to structure the transaction on terms acceptable to all parties.

The Company:
A sponsor-backed company that formulates and distributes impression fragrances.

The Financing Situation:
The Company recently transitioned from a commercial bank lender to an asset based lender, Bibby Financial Services.  The Company required a seasonal-over-advance to build inventory and maintain vendor relationships in order to fulfill anticipated sales order growth for the holiday season.

The Solution:
Super G was able to get comfortable with the Company’s operating history, 2016 growth initiatives, management team and seasonal cash flow.  Underwriting and approval process of the 2nd lien loan took place quickly allowing Bibby to reduce its over-advance position and providing the Company with enough liquidity to meet immediate seasonal production demands.  Super G’s covenant light loan documents, cooperative process with existing senior lenders and rapid decision making allowed for an efficient and seamless closing.