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Gibraltar Provides $20MM Acquisition Financing to Sponsor-Backed Farm Supply Company

February 08, 2021, 05:00 AM
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Gibraltar Business Capital (GBC) has created a reputation as the preferred ABL partner to private equity groups. When CriticalPoint Capital needed acquisition financing support, GBC was the natural fit. CriticalPoint Capital is a Los Angeles-based operationally focused private equity firm specializing in corporate divestitures, companies in transition and special situations.

With access to GBC’s credit facility, the CriticalPoint Capital team was able to complete the acquisition of substantially all of the assets of the farm supply distribution division from Southern States Cooperative, one of the largest farm supply retail and service cooperatives in the United States. CriticalPoint Capital re-branded the newly acquired division Agway Farm & Home.

Agway Farm & Home will continue to operate a farm supply wholesale distribution business which serves a network of approximately 1,250 private dealers and retailers throughout the East Coast. The company will continue to supply this network with their seasonal farm and home product needs including home and hardware, lawn and garden, farm, pet and other seasonal supplies.

In this transaction, GBC dug deep into the new company’s accounts receivable and provided flexibility in the inventory valuation requirements in creatively structuring the borrowing base. In addition, GBC provided unique financial covenant flexibility to support the transaction.

“GBC’s innovative team allowed for a creative collateral structuring that resulted in them being selected as our preferred financing partner. We sought a quick process to close the transaction, and GBC delivered their end of the deal by swiftly moving the deal to completion,” said Brad Holtmeier, Partner at CriticalPoint Capital.

GBC’s long standing relationship with the private equity group, its financial covenant flexibility and borrowing base creativity provided the right structure to facilitate a smooth transaction.

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