Fueling Growth Through Strategic Recapitalization

The Challenge

A successful financial services firm had reached a strategic inflection point. Their existing $55 million credit facility, once sufficient, was now a limitation, constraining their growth ambitions and creating unnecessary interest rate exposure. The leadership team had a clear vision for the future, but their capital structure wasn't built to get them there.

They needed a partner to help them navigate the complex capital markets and achieve an ambitious slate of objectives:

• Upsize the facility from $55 million to $75 million.

• Incorporate a $25 million accordion for future opportunistic growth.

• Generate liquidity for early equity holders.

• Increase the advance rate to improve working capital efficiency.

• Hedge interest rate risk by converting a larger portion of debt to a fixed rate.

The Massena Solution: Orchestrating Success

We acted as the client’s dedicated strategic advisor, orchestrating the entire process from initial analysis to post-close management. Our approach was methodical and market-driven.

1. Building the Blueprint: We began by crafting a detailed pro forma financial model that served as our strategic roadmap. This model wasn't just a spreadsheet; it was a dynamic tool that allowed us to pressure-test scenarios and articulate a powerful, data-driven story. We then authored a compelling institutional narrative, highlighting the company’s strengths and clearly outlining the investment thesis for potential lenders.

2. Creating a Competitive Market: We didn't just find lenders; we created a competitive market for our client's business. Leveraging our deep network across senior banks, private credit funds, and family offices, we orchestrated a disciplined and competitive process. By curating the right group of potential partners and managing all communications, we put our client in the driver's seat and ensured the term sheets they received were aggressive and thoughtfully structured.

3. Ensuring Long-Term Success: Our work wasn't finished when the ink was dry. Closing the deal was the beginning of our post-close partnership. We remained deeply involved, helping the client build and maintain their new borrowing base certificate and ensuring seamless compliance with all financial covenants, eligibility criteria, and concentration limits. We provided the hands-on support needed to manage the powerful new machinery of their credit agreement.

The Result

The client secured a comprehensive financing solution that exceeded their original objectives. The new facility was not just larger; it was smarter.

• Massive Firepower: The recapitalization provided $75 million in committed capital plus a $25 million accordion, arming the company with the fuel for its next stage of growth.

• Enhanced Liquidity & Flexibility: The transaction unlocked significant liquidity for shareholders and improved the advance rate, giving the company greater operational flexibility.

• Fortified Financial Position: By shifting a larger portion of the interest rate exposure from variable to fixed, we helped fortify the company’s balance sheet against market volatility.

• A True Partnership: The client emerged from the process not only with an optimal capital structure but also with a trusted financial partner, equipped with both the capital and the confidence to execute their vision.

This engagement highlights how a strategic, hands-on advisory process can transform a company's financial foundation from a liability into a powerful competitive advantage.