Queuing Products Company

A UK-based queuing products company with $13 million in revenue and $1.6 million in EBITDA purchased their US distributor with $25 million in revenue and $2.5 million of EBITDA.  The founder of this company approached Attract Capital to structure the debt capital and raise the acquisition financing.  The founder did not want to invest cash equity but sought to finance 100% of the purchase price through rolling over the existing equity value of the business of $6 million.   The acquisition purchase price was $20 million.  The acquisition was strategically important to create a stronger competitive position for this company. 

In the first part of the engagement, we raised a $23 million acquisition financing facility to refinance existing loans and fund the acquisition purchase price.   We created a debt structure of senior debt and mezzanine debt providing low-cost financing along with long term principal repayment.  In structuring this facility, we advised the client on financial presentation of cost savings and operational efficiencies from the acquisition.  Our presentation methodology increased EBITDA from $4.1 million to $5.7 million on an adjusted basis and unlocked the level of acquisition financing needed.   We ran a full lender outreach process and contacted fifty lenders.  We managed the process, negotiated the terms and selected the best lenders for our client to engage with.   We provided high levels of diligence and transaction support to close the acquisition financing.  The successful lender was able to gain comfort in the credibility of the rollover equity value. 

Through our advice and financing solution, the client made a highly accretive acquisition where 100% of the acquisition financing was debt capital, not diluting the founder’s ownership stake.

In the second part of the engagement, we served as a Director on the Board of the company and advised on financial reporting, add-on acquisitions and the strategic road map.

The Company recorded strong growth over the two and a half years following the acquisition.  Revenue grew 12.5% per year from $38 million to $51 million and EBITDA grew 15.7% per year from $5.7 million to $8.2 million over the period.   This had a very positive effect on the underlying equity value of the company.

In the third part of the engagement, we were mandated to sell the business.  We ran a complete private equity outreach process, negotiated the value and selected the best investors for our client to focus on.  The company sold at an equity value of $50 million, resulting in 8.3 times increase over the starting equity value and a ROI of 233% per annum over the 2.5-year hold period.

In total, Attract Capital has raised $103 million for this company over a 2.5- year period consisting of the initial acquisition financing of $23 million and the enterprise exit value of $80 million.