UMA Enterprises, Inc.’s Acquisition by Long Point Capital

Transaction

• UMA Enterprises, Inc. (“UMA”) is a fast growing full-service importer and wholesaler of a product portfolio of over 8,000 SKUs which are broadly classified as home decor, wall decor, floral accessories and accent furniture
• The founding entrepreneur was seeking an equity sponsor to lead a leveraged recapitalization to gain liquidity and grow the business to the next level

Challenges

• The Company came to market under uncertain economic conditions consisting of:
  • A downturn in the housing cycle
  • Tight credit markets which could negatively impact the amount of senior debt leverage available to potential acquirers
• Volatility in the housing market has impacted some decor retailers, thereby affecting distributor revenues and earnings
• Given the fragmented structure of the supplier base, no single vendor has emerged as a leader in supplying all categories of home decor products

Solution

• FocalPoint was able to maintain momentum despite ongoing negotiations due to the declining state of the credit markets
• FocalPoint approached both strategic and financial buyers in a healthy competitive process
  • Strategic buyers were approached in a collaborative manner, addressing key risks and highlighting specific synergies available to them by acquiring UMA
  • Financial buyers were solicited to sponsor a leveraged recap to maximize liquidity to the owner and reward key management
• Result: A great outcome for all parties
  • The founder retained a healthy minority equity interest, remaining involved in the management of the Company
  • Long Point Capital acquired a premium foundation to grow and build a leadership position in the home décor distribution space