Case Study: Management Buyout

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

Objective

A highly experienced operating executive was seeking to acquire a chain of convenience stores in a secondary market. Despite his impressive resume and compelling strategic plan to bring sophisticated and proven merchandising strategies to an unsophisticated and undermanaged chain, he was struggling to line up the junior capital required to consummate the buyout. Most financial partners contacted passed due to the relatively small amount of personal capital available to be invested.

Solution

Ironwood took the time to understand the executive’s strategy and ultimately assisted in structuring a senior debt, subordinated debt and seller financing package that made the transaction possible with minimal equity investment from the entrepreneur. Ironwood invested subordinated debt to close the initial transaction and also provided follow-on financing for tuck-in acquisitions of additional stores. Ironwood consulted for the business and worked side by side with the new owner to maintain profitability and preserve liquidity during the economic meltdown.

Outcome

Despite difficult market conditions, the company grew revenue and EBITDA every year during the term of Ironwood’s investment and was ultimately sold to a large strategic buyer at a premium valuation.