NDS, a portfolio company of Churchill Capital, engaged principals of FocalPoint to raise capital in order to:
Repatriate a portion of its initial investment
Finance a “no money down” acquisition
Challenges
Hurdles in consummating a transaction included:
Churchill’s desire to finance the new acquisition through 100% senior debt financing combined with their desire to repatriate its sub debt
In addition, the sellers of TargetCo were being cashed out
Due to the rapid growth of NDS, the historical “proforma” credit statistics were extremely aggressive
Integration risk of a new subsidiary
Solution
We addressed these issues by:
Developing a highly comprehensive financing memorandum and financial model that addressed the integration risk, clarified the size of the “air ball” and time required to bring the loan into conformance with ABL statistics, and supported the acquisition rationale with compelling reasons for the deal
Creating a competitive process that forced senior lenders to compete for the business
Broadly shopping the deal to the senior lender community
Preparing the management team for a comprehensive investor presentation
Ultimately, we delivered a financing solution that satisfied Churchill’s specific interests and also proved to be one of the most profitable platforms in their portfolio
