Source Capital
Non-traditional middle market investment banking
Tombstones
Fiscal Year 2006 Transactions
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Senior Debt Placement |
Friends Business Source
Findlay, Ohio
Friends is an office supply distributor covering the Findlay, Lima, Toledo, Columbus and Cleveland markets. The company sought increased availability from its working capital and an increase in its current long-term financing. Source completely recapitalized and simplified the client's balance sheet by bringing in two new lenders, while renegotiating the incumbent bank's current financing arrangement. The end result was a simpler capital structure, $350,000 of additional free cash, 15% cash flow savings, and a new relationship with a lender who truly understood the company's business.
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Senior Debt Placement |
Tracewell Systems, Inc.
Westerville, Ohio
Tracewell is a highly-specialized designer of customized, integrated electronic solutions, primarily for prime defense contractors. Management approached Source to restructure its current, restrictive financing arrangement with its smaller regional bank, which had reached its lending capacity. Source arranged a lender, which put together a creative debt arrangement, including temporary purchase order financing. Getting the capital it needed, Tracewell was able to win a contract with a major prime defense contractor, which would potentially boost its revenues by 40% in the coming year.
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Strategic Distribution Agreement |
Wright Tool
Barberton, Ohio
Wright Tool is a distributor of high-quality hand tools. Wright chose Source to find potential partners, which manufacture high-quality tools for distribution through its national dealer channels and catalog. Source found Bolttech, a manufacturer of highly-specialized pneumatic torque wrenches and approached its management team. A meeting was set for introductions and shortly after, a distribution agreement was negotiated and executed.
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Venture Equity and Senior Debt Placement |
Onward Coatings Company, LLC**
Highland Heights, Ohio
Onward Coatings is a start-up company licensing a technology to revolutionize the chrome industry. Source was brought in to raise the capital needed for a pilot plant, which would demonstrate to the OEMs the production capabilities of an automated process to apply this technology. Source arranged and presented to potential investors, along with finalizing the business plan with management. Included in the capital raise was negotiating a strategic partnership with the Dutch, global paint company, Akzo Nobel. Finally, Source worked with its intellectual property partner, yet2.com, on negotiating the final licensing arrangement with the patent holder.
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Senior Debt Placement |
Strong Tool Company
Euclid, Ohio
Strong Tool is a leading distributor of carbide-cutting tools. The company was unable to find traditional financing and was not getting the support it needed from its incumbent bank. Management used Source to access alternative financing in order to execute a major strategic shift and to provide additional working capital for growth opportunities.
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Senior Debt Placement |
Paul's Do-It Best Lumber
Garrettsville, Ohio
Paul's Lumber is a retail and wholesale distributor of building and Do-It-Yourself supplies. Accessing the capital markets in the retail industry is difficult. However, Source was able to arrange a new lending relationship for the company through an alternative funding source. This new relationship provided the permanent working capital support needed to strengthen the company's product lines and enhance its facilities.
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Senior Debt Placement |
American Commodore Tuxedo
South Euclid, Ohio
American Commodore Tuxedo is a chain of twenty retail stores and wholesale distribution for tuxedos and other formal wear. The company sought to move its lending relationship while it was undergoing a strategic transition to alleviate its seasonality. Source was able to establish a new lending relationship, along with stronger treasury management solutions, all in the course of three weeks. This allowed management to focus on its operations and new plan while Source negotiated the funding at a significantly lower cost of capital.
* Source Capital, LLC acted as the exclusive financial advisor to the above transactions.
** Source Capital, LLC has a material equity interest in this client as a result
of the above transaction.