OPPORTUNITY: Leveraged Buy Out / Financial Engineering
DESCRIPTION: Acquired 80% of an Inc. 500 Technology company.
BACKGROUND: Company needed working capital. Ownership structure was dysfunctional. Two of four shareholders did not have the means to invest, but did not want to incur dilution.
- Former partners received cash and retained 10% ownership.
- Financed using “unitranche” structure, providing a 12% coupon and 19% ownership to our investors, plus access to $4.5million of working capital.
- Secured additional financing from a Fortune 50 company at a much higher valuation.
- Fortune 50 investor brought a private-label customer base and sales distribution.
PERFORMANCE: Vivaris investors still own control of the company and have an (unrealized) annualized return on their investment of 41%.