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Gibraltar Supports Acquisition and Growth for Pharmaceutical Distributor with $25MM Asset-based Loan

December 07, 2022, 07:07 AM
Filed Under: Pharmaceuticals

Once again, Gibraltar's ability to move swiftly, structure creative financing terms and leverage long-standing relationships resulted in a successful financing partnership.

When Prodigy Health, a national drug distributor, was in the process of acquiring Mockingbird Pharma and Cochran Pharmaceutical, Gibraltar was presented with the opportunity to provide a senior working capital facility to support the acquisition and future growth of the newly formed combined entity. GBC’s industry reputation and connections triggered the initial introduction to Prodigy Health and ultimately provided their leadership confidence in Gibraltar’s financing process.

Since 2001, Prodigy Health has distributed high value, specialty biopharmaceuticals to hospitals and hospital-related entities across the U.S., providing 24/7/365 same day service not available from major national competitors. With the acquisition of Mockingbird Pharma and Cochran Pharmaceutical, Prodigy Health adds distribution of brand and generic pharmaceuticals to independent retail pharmacies and regional retail pharmacy groups across the U.S.

In this specific transaction, Gibraltar’s credit team took the time to understand the nature of the company’s inventory and accounts receivable, digging deep to surface innovative ways to unlock more liquidity. As a result, GBC was able to provide advance rates against accounts receivable and inventory that exceed traditional ABL advance rates. This transaction is also particularly unique because the borrowing base includes asset types that are often excluded by the competition.

Gibraltar’s team did the necessary diligence to truly understand the company’s story, including the nuances of the business and the opportunities for growth afforded by the merger. Key credit decision makers were also involved early in the process to provide the investors the confidence necessary to complete the transaction.

“Gibraltar dug in quickly and got all of the needed people involved to understand the unique nuances of our business and the complexity of closing an acquisition in conjunction with a new $25MM ABL credit line,” said Jon Houssian, CEO of Prodigy Health. “Gibraltar’s key decision makers’ involvement from the start gave us confidence throughout the process, and they delivered in a very timely manner.”

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