Rivet Pty Limited, (previously McAleese) had undergone a significant period of restructuring, having entered voluntary administration and then exited by way of a DOCA through which specialist investment funds had acquired the equity. The previous CEO and major shareholder sought to refinance the funds and reacquire the business. With less than a year having passed since the administration, traditional finance was a challenge, and the business continued to focus on stabilising performance.
Gordon Brothers was engaged to reduce the cost of funding and provide additional flexibility by removing the risk of default hair-triggers, noting performance was still stabilising. Through a detailed analysis of the equipment base, Gordon Brothers and Gordon Brothers Finance Company were able to provide the borrower an asset based financing facility.
The company was able to access increased leverage under an extended term relative to what would be available on a more traditional earnings or cashflow multiple, in addition to a sculpted amortization profile. With a primary focus on asset value, minimal cashflow or performance covenants were required, providing the business with comfort that any volatility in earnings would not have material consequences.
The previous CEO was able to reacquire the equity of the business and exit investment fund ownership.