Private Equity Backed

The Company:
Sponsor-backed provider of employee healthcare management services.
TTM Revenue: $35mm |  TTM EBITDA: $5.6mm

The Financing Situation:
The Company was seeking additional working capital for (i) seasonality around Q4 employee enrollment, (ii) cushion to continue growth and run an M&A process, and (iii) minimum liquidity to stay in compliance with bank covenants.  The Company’s senior lender is providing an asset-based revolving line of credit as well as a large enterprise value based term loan and could not extend additional credit.  Since the Company would like to pursue a liquidity event within 18 months, a non-dilutive solution was important to management as the business continues to grow and increase its enterprise value.

 The Solution:
Super G was able to work closely with the Company’s senior lender to provide a $2.0 million non-dilutive second lien term loan with a payment schedule tailored to the Company’s seasonal cash flow, growth initiatives, and bank covenants.  Super G was able to get comfortable with the seasonality of the business and total leverage given the Company’s strong financial performance, enterprise value, and experienced management team & private equity sponsor.

The Company:
Private equity backed, outsourced pharmaceutical service provider conducting clinical research.
TTM Revenue: $17mm |TTM EBITDA: $1mm

The Financing Situation:
The Company had a cash flow based term loan with its bank and was in technical default.  Given the combination of lender fatigue, lumpy sales & cash collections due to the timing of contracts, and high monthly payments on the term loan, the Company was seeking immediate relief.  An asset based lender was not a solution due to timing and the term loan take-out amount would not conform to a borrowing base.

The Solution:
Super G provided a $2.0 million senior secured, interest-only bridge loan for a full take-out of the bank and working capital to support the Company’s immediate financing needs – a flexible structure which will allow the Company to operate its business with sufficient liquidity and buy time to run a full process for a new bank relationship.  Super G was able to get comfortable with the sales lumpiness & YTD financial performance given the Company’s strong track record, accounts receivable collateral, enterprise value, and experienced management team.  Super G was able to close quickly (within 2 weeks) which benefited both the bank (removed loan from special assets) and the Company (covenant light loan, working capital cushion, and debt service flexibility).

The Company:

Software as a service platform that provides data management solutions to insurance agencies, government agencies, hospitals and other healthcare organizations. The Company’s service offering includes enrollment and network management, medical credential verification, continuous monitoring of provider data, and claims screening.

The Financing Solution:

The Company was in the process of raising a large strategic equity round and was seeking interim (“bridge”) capital to support its continued growth as well as general working capital cushion to alleviate equity closing pressure.  The Company had an existing senior term loan with an affiliate of funds managed by Fortress Investment Group (“Fortress”) secured by the Company’s intellectual property and all other business assets so traditional working capital solutions such as asset based lending/factoring were not an option due to seniority issues as well as insufficient borrowing base availability.  Additionally, given the anticipated time horizon to a large equity raise, the Company preferred non-dilutive capital versus convertible note/shareholder equity options.

The Solution:

Super G was able to work closely with Fortress to provide a $1.5 million structured working capital solution by carving out specific contracts as collateral and lending against the annual value of those contracts (i.e. Super G was senior secured on specific contracts and second lien on all other assets). This allowed the Company to have much more access to cash immediately then they could with a traditional asset based lender. This unique structure combined with non-dilutive capital were the key points of difference when the Company made its bridge financing decision. In addition to the contract collateral, the key underwriting criteria for this deal was the Company’s unique software offering, the management team, customer stickiness, and ability to service Super G’s debt through operational cash flow in the event an equity raise does not occur.

For more information on Fortress Investment Group, please contact:

Yoni Shtein
Vice President
yshtein@fortress.com
415-284-7415
www.fortress.com

 

The Company:

A sponsor-backed company which engineers, manufactures, and sources customized user-interface and product identification components for customers in the medical, aerospace, industrial, and consumer industries.

The Financing Situation:

The Company was in the process of transitioning from its commercial bank lender to an asset based lender, Marquette Business Credit, and Super G helped complete the financing structure.

The Solution:

Super G was able to get comfortable with the Company’s continued improvements, growth strategy and senior management team. Underwriting and approval process of the 2nd lien loan took place quickly allowing Marquette to present a comprehensive solution to its credit committee.  Super G’s  flexible structured solution, covenant light loan documents, and rapid decision making allowed for an efficient and seamless closing.

The Company: A fully-integrated digital media content company.

The Financing Situation:  The Company was in the process of raising venture capital to fund strategic acquisitions and other long-term growth initiatives.  During this process, the Company needed additional working capital to fund operations in order to maintain its growth trajectory.

The Solution:  Super G was able to quickly get comfortable with the Company’s value proposition, experienced management team, and institutional backer.  Most importantly, the Company demonstrated the ability to sufficiently debt service Super G’s amortizing term loan assuming the venture debt and Series B round did not close.  Super G structured a flexible 2nd lien solution subordinated to the Company’s senior lender, FastPay, a financial platform that provides credit and payment solutions to the global digital media industry.  Super G’s covenant light loan documents and rapid decision making allowed for an efficient and seamless closing.   Post-funding, the Company was able to successfully close its venture debt round.

For more information on FastPay, please contact:

Maytal Shainberg
Sr. Director, Engagement
maytal@gofastpay.com
www.gofastpay.com

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.

 

The Company:

A private equity backed candle manufacturer in the Southwest with distribution throughout the United States and Canada.  They offer a variety of candle types, fragrances, and accessories.

The Financing Situation:

Due to growth the Company had a larger than usual seasonal need during its low working capital cycle in the summer.  The Company’s bank could not increase availability fast enough for production going into the fall busy season.  The Company’s business model is such that it does not generate accounts receivable so alternative lenders such as factors and asset based lenders were not an option for additional working capital and even if there were assets available to lend against, they would not be able to provide enough availability for production due to the heavy seasonality of the business.

The Solution:

Super G was able to get comfortable with the Company’s business model, management team, and heavy seasonality and structured a $2MM tailored solution that matched the Company’s cash flows.  To facilitate a quick closing, Super G purchased the existing note from the senior lender and upsized the loan amount to provide additional working capital for production going into the fall busy season.  This solution provided the Company with flexible capital quickly and positioned the Company to generate a strong fall/holiday season.