Case Study: Acquisition Financing

We have worked with companies to achieve many business objectives and favorable outcomes for company owners.

Objective

A precision manufacturer was seeking to make a substantial acquisition with the goal of broadening its customer base and production capabilities. This acquisition was critical to the strategic plan of the company’s owners, filling a capability void, increasing the overall scale of the business, and making the company more attractive to financial and strategic acquirers. The company was already leveraged from a senior debt perspective and needed to preserve borrowing capacity for integration and ongoing capital improvements. The owners of the business already had an equity partner, but were reluctant to go back to that funding source for equity capital due to the dilutive effects.

Solution

Ironwood provided subordinated debt and attractively priced minority equity to facilitate the acquisition. Ironwood worked closely with the senior lender to ensure that the company had ample liquidity and a cushion on financial covenants which allowed management to successfully integrate the acquisition. Ironwood introduced the company to lean manufacturing experts who advised the company on integration and overall operational improvements.

Outcome

The company continued to grow both organically and through acquisition and was ultimately sold to a financial buyer with the original owners achieving significant multiple expansion as a result of its scale. The owners retained a meaningful stake in the business post-sale.