A wire and cable supplier engaged Virtas as financial advisor to improve the performance of the company, to drive EBITDA growth, to structure a credit facility in alignment with the business plan, and to initiate a search process to identify and place a senior secured ABL credit facility with a new lender.
Client Background
The company is a national supplier of wire and cable to the utilities and renewable energy industry. Its lender’s line of credit cap negatively affected liquidity required to support the growth of the company.
Scope of Services
- Development/implementation of performance improvement tactical plan
- Viability assessment of underperforming subsidiary
- Establish communication cadence with the lender
- Financial, operational and management due diligence
- Pricing/margin/costing/purchasing analysis
- Develop sensitivity analysis proforma financial projections and cash flow model
- Negotiation of bridge loan financing and over advance provisions from lender
- Capital structure and placement of a senior secured credit facility with a new lender
Significant Milestones
- Secured $7.5m bridge loan (over advance) with existing lender
- Assisted management with executive search and replacement of CFO
- Successful implementation of pricing/margin and purchasing plan for the subsidiary
- Increased sales and achieved breakeven EBITDA in subsidiary within three months
- Successfully arranged an $80m senior secured credit facility with new lender
Value to Client
- Company provided a new, non-recourse credit facility (previous loan was with recourse) at a reduced rate and much larger cap allowing for significant additional availability on borrowing base
- Strategic operating improvements led to a 47% increase in revenue and a 475% improvement in overall trailing 12-month EBITDA