Financing Schwab Sales' Growth

Transaction

• Schwab Sales specializes in renting earth moving equipment to contractors and developers in the Southwest
• According the Rental Equipment Register, Schwab Sales would be ranked among the 30th largest equipment rental companies in the United States
• The owner sought personal liquidity and a partner to finance growth

Challenges

• Hurdles in consummating a transaction included:
  • Lack of depth in the senior management team
    • No Chief Financial Officer
  • Back-office accounting and information systems in need of an upgrade
    • Lack of audited financials
  • Perceived risk in housing and construction cycle
  • Transaction required senior debt financing

• FocalPoint introduced a New York based hedge fund
  • Negotiated terms and transaction structure for equity investment
  • Recruited a temporary CFO to facilitate the transaction and to upgrade the financial and accounting systems
• FocalPoint ran a competitive process for a new debt facility and ultimately selected three lenders to share a $95,000,000 revolver
  • Lenders with industry experience
  • Aggressive advance rates against collateral base
  • Flexible structure