Lucky Strike Entertainment owns and operates the leading bowling, entertainment and casual dining chain in the United States and Canada
After successfully financing the opening of 11 locations, Lucky Strike needed to fund its growth objectives and eliminate the reliance on shareholder contributions, equipment leases and landlord allowances to support growth
Challenges
Hurdles in consummating a transaction included:
A complex capital structure comprised of nearly 50 separate equipment leases that historically provided financing for new location openings
Substantial amount of capital needed to fund the opening of five new locations each year going forward
Need to refinance shareholder notes and eliminate personal guarantees securing equipment lease and real estate obligations
Limited operating history
Solution
FocalPoint strategically selected and marketed to both traditional and non-traditional financing sources to provide capital in either or both tranches of the capital structure
This process generated substantial interest in the Company and resulted in numerous proposals from both senior and subordinated debt lenders
Lucky Strike was able to secure financing without principal amortization allowing cash flow from operations to be re-deployed to fund additional growth in new locations
FocalPoint’s intimate knowledge of the capital providers, relationships with key decision makers within each institution and an understanding of the underwriting and approval processes resulted in a strengthened negotiating position. This trust and dialogue with capital providers was crucial in allowing for a significant distribution to repay shareholder notes while securing additional capital to fund growth
FocalPoint formulated a strategy to refinance the Company’s obligations under its equipment leases and then worked with Lucky Strike’s management team to individually contact and negotiate favorable payoffs. The strategy allowed Lucky Strike to generate several million in savings in the prepayment of its leases
