A logistics company who has a strong and stable earnings history was looking to transition ownership to the current management team. The value of the Company was north of $20m at the time of the MBO.
The Big 4 Australian banks were unwilling to provide funding for a share buyback in a context where there was no collateral to support the debt (assets were held via operating lease). The management team who were acquiring it had limited means of injecting further equity and did not want to put personal guarantees/ homes up in support.
The Neu Capital team worked with the management team to help them put together a package that was acceptable to the institutional exiting shareholder. This included a combination of specialised debt, convertible notes, and earn out provisions. The funding was provided by a non-bank lender that provided lending based on the Company’s cashflows.
