Aerospace

  • Type: Acquisition Financing
  • Structure: Second Lien Term Loan & Equity
  • Date: 2016
  • Location: Seattle, Washington
  • $10,000,000

Situation:

An Oklahoma-based independent sponsor was seeking capital to effectuate the acquisition of an aerospace engineering firm focused on the development, certification and supply of certified performance improvement systems for commercial and general aviation aircraft worldwide.  The independent sponsor brought significant value through their extensive aerospace experience, a solid operational track record and meaningful skin in the game in the form of cash equity invested.

Congruent structured a $10,000,000 investment comprising a second lien term loan and an equity co-investment, providing significant flexibility in order to reduce the debt service burden on the business and instead allow for future excess cash flow to be reinvested for growth.  Congruent’s prior expertise across multiple aerospace transactions was value-add throughout the underwriting process.

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Business Services

  • Type: Growth Capital
  • Structure: Second Lien Term Loan
  • Date: 2016
  • Location: Baton Rouge, Louisiana
  • $15,600,000

Situation:

The Company is a 50-year old, family-owned business that provides various engineering and construction services to the chemical, oil & gas, and power industries. The financing funded the acquisition of a specialty welding firm, which expanded and diversified the Company’s service offering. The family chose to finance the acquisition with mezzanine debt rather than a dilutive equity raise.

Congruent provided a second lien term loan structure that sits behind the senior lender’s asset-based revolver in the capital structure. While the Company is paying traditional mezzanine economics, the family avoided the more expensive dilution that would have come with an equity raise. Congruent is protected through its secured position and covenant protection in the credit agreement.

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Energy & Natural Resources

  • Type: Growth Capital
  • Structure: Second Lien Term Loan
  • Date: 2015
  • Location: Amarillo, Texas
  • $6,000,000

Situation:

The Company is an owner-operated business that provides specialty chemicals to both upstream and midstream operators in the oil and gas industry, with a focus on stimulating production, water treatment, and hydraulic fracturing. The Company sells its chemicals to firms in Texas, Oklahoma, New Mexico, and Colorado. In the midst of a sharp downturn in oil and gas prices, the Company sought approximately $6,000,000 of growth capital to fund a strategic acquisition in the Permian Basin of Texas.

Congruent invested in a second lien term loan, positioned behind the senior lender’s asset-based revolver in the capital structure. Congruent’s capital enabled management to continue their growth strategy and take market share during the downturn in the commodity cycle. Congruent’s position was supported by the Company’s strong customer relationships, superior chemical formulations, and modest leverage.

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Retail & Restaurants

  • Type: Growth Capital
  • Structure: First Lien Term Loan & Equity
  • Date: 2015
  • Location: Grand Rapids, Michigan
  • $25,000,000

Situation:

An owner operator of nine restaurants was seeking to expand into neighboring states throughout the Midwest. The Company had built an exceptional brand in its market with a unique customer experience, award winning food and outstanding service, garnering a loyal following in the region.

Congruent structured a $25,000,000 investment, comprising a first lien credit facility, delayed draw facility, and equity co-investment. The delayed draw mechanism was highly customized to the specific borrower, providing significant flexibility for the Company to draw additional capital as needed for future store growth.

Due to the asset-lite nature of the industry combined with the growth strategy, the Company’s traditional bank lender was unwilling to fund the necessary growth capital. Congruent was able to structure a debt and equity solution that minimized dilution, while still achieving ownership’s growth objectives.

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Technology & Software

  • Type: Minority Recapitalization & Growth Capital
  • Structure: First Lien Term Loan & Preferred Equity
  • Date: 2013 & 2015
  • Location: Dallas, Texas
  • $14,650,000

Situation:

An owner-operated, software-as-a-service provider to automotive dealerships was seeking to refinance an existing senior secured term loan.  The Company, with its long operating history and strong management team, is a leader within its niche, with an approximate market share of over 30%.  The Company sought a lending partner that had the interest and ability to grow with the Company over the coming years.

Congruent initially funded a $5,000,000 senior secured term loan for the refinancing.  After building a strong relationship over the next 18 months, the management team approached Congruent about an exciting new growth opportunity it was considering. After thorough diligence, Congruent upsized its existing term loan and made a preferred equity investment to fund the growth.

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Cable & Telecom

  • Type: Refinancing & Growth Capital
  • Structure: First Lien Term Loan
  • Date: 2013 & 2015
  • Location: Atlanta, Georgia
  • $41,000,000

Situation:

A leading provider of broadband communication services (video, internet, and phone) to a growing suburb of Atlanta, Georgia was looking to refinance its existing indebtedness and raise additional capital to fund the conversion of its network from analog to digital. Creating a digital network was a key growth opportunity for the Company, as it allowed for an increased number of high-definition cable channels and higher speed data products.

Congruent co-invested alongside a long-time partner in a $36,000,000 first lien term loan. Congruent was comfortable with the investment due to the recurring revenue dynamics, growing population in the Company’s local market area, and the sponsor’s equity thesis.

Given the stable financial performance since close and the attractive growth prospects, the lender group upsized the first lien term loan by $5,000,000 in January 2015, to repay a portion of the outstanding subordinated debt and fund an expansion of the Company’s network.

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Distribution

  • Type: Growth Capital
  • Structure: Second Lien Term Loan
  • Date: 2014
  • Location: Dallas, Texas
  • $40,000,000

Situation:

A family-owned, multi-generational, heavy equipment distributor was seeking to expand its reach by acquiring a large distributor in a neighboring territory, thereby creating a combined Company with broad reach and best in class products. The family, having built significant balance sheet equity over the years through retained earnings, elected to raise junior debt capital instead of contributing $40,000,000 of additional equity.

Congruent proposed a second lien term loan structure that would sit behind the senior lender’s asset-based revolver in the capital structure. While the Company is paying traditional mezzanine economics, the family avoided the dilution that would have come with an equity raise. Congruent is protected through its senior secured position and covenant protection in the credit agreement.

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Contractor Services

  • Type: Acquisition Financing
  • Structure: Second Lien Term Loan & Equity
  • Date: 2017
  • Location: Austin, Texas
  • $5,250,000

Situation:

An Austin-based family office partnered with the management team in the acquisition of a specialty electrical contractor that was founder owned since the 1980s. The family office had commitments from senior lenders and was bringing meaningful equity. They approached Congruent about providing a $5,250,000 second lien term loan and minority equity investment.

Congruent worked with the family office and management team to implement a capital structure suitable for the industry. Congruent continues to serve as a value add business partner through direct involvement at the board level, helping to provide oversight and guidance as the Company executes its growth strategy.

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Healthcare

  • Type: Growth Capital
  • Structure: First Lien Term Loan
  • Date: 2017
  • Location: San Antonio, Texas
  • $25,000,000

Situation:

The Company is innovative in the healthcare space, developing, manufacturing, and marketing cardiovascular products. It is backed by a high quality, committed family office with a very significant capital investment and a track record of building businesses in the industry. The Company recently achieved a critical milestone and sought outside capital to aid in further commercializing its proprietary technology.

Congruent structured a $25,000,000 investment comprising a first lien term loan and delayed draw facility. The Company was able to avoid higher dilution from an equity raise while gaining access to additional growth capital. Congruent is protected through a senior secured position on an attractive asset base.

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Niche Manufacturing

  • Type: Refinancing & Growth Capital
  • Structure: Second Lien Term Loan
  • Date: 2017
  • Location: Oxford, Connecticut
  • $5,000,000

Situation:

The Company is an industry leader in the rail maintenance equipment manufacturing space, with an over 70-year history of delivering high quality systems. Current management and ownership have led a transformation of the business, improving its operating position and market position to a point where it is ready to take on growth capital.

Congruent structured a $5,000,000 second lien term loan that sits behind a senior facility. By partnering with Congruent, the Company was able to replace a more expensive capital partner with a mezzanine debt solution, simultaneously bolstering the Company’s balance sheet to appeal to large prospective customers.

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Business Process Outsourcing

  • Type: Minority Recapitalization & Growth Capital
  • Structure: Second Lien Term Loan & Preferred Equity
  • Date: 2017
  • Location: Houston, Texas
  • $7,750,000

Situation:

Founded in 2005, the Company provides project management services to large industrial facilities in support of maintenance operations at downstream oil & gas, chemicals, and fertilizer plants. The Company’s customers consist primarily of large Fortune 500 companies.

The CEO, who is also the Company’s 100% equity owner, was seeking a majority sale of ~60% of his interest in order to diversify his personal wealth and bring in a partner to pursue near-term growth opportunities. Congruent invested $7,750,000, comprising a second lien term loan and a preferred equity investment, in conjunction with one of its strong senior lending partners. This structure satisfied the owner’s personal financial goals and provided the Company with the necessary growth capital, while still allowing the owner to retain control of his business.

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Media & Entertainment

  • Type: Growth Capital
  • Structure: First Lien Term Loan
  • Date: 2012 & 2014
  • Location: San Antonio, Texas
  • $14,800,000

Situation:

A family-owned operator and developer of live entertainment venues was raising growth capital to fund the Company’s capital contribution for two new venues. These venues were being developed in partnerships with local municipalities which were providing a majority of the development capital.  Upon completion, the Company would manage and operate these venues under long-term leases. Management are considered best-in-class operators with sterling reputations in this niche industry.

Congruent initially structured a $9,800,000 first lien term loan with warrants, providing a highly unique and customized structure that allowed for the delay in cash flows from the ramp of the new theatres.

Approximately two years after the initial raise, the Company approached Congruent to upsize the existing facility by $5,000,000 to provide financing for a third venue, under similar terms as the initial funding.  Congruent saw this as an opportunity to expand its relationship with a great Company and management team, expeditiously working to a quick close.

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