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Phoenix Capital Resources Secures $43MM for Producer of Engineering Thermoplastics

September 24, 2013, 08:02 AM
Filed Under: Manufacturing

Phoenix Capital Resources acted as the exclusive investment banker to a leading undisclosed North American manufacturer and compounder of Nylon 6, Nylon 6/66, Nylon 6/9, specialty nylons, polycarbonate and other polymer products (the “Company”). The Company engages primarily in the production of engineering thermoplastics through polymerization and compounding.  The Company is also involved in resource recovery of recycled products and de-polymerization, for use by manufacturers as the primary material for the production of fiber, injection molded and extruded plastic products. 

The Company was a former Phoenix Management Services client and had a long-term relationship with the firm.  Due to the success of this relationship, the Company again reached out to Phoenix to explore their refinancing alternatives.  Over the course of a year, Phoenix worked with the Company to secure and expand its U.S. revolver from $16MM to $20MM with PNC and replace the factoring facility in Canada with a new $10MM ABL line from PNC.  Additionally, Phoenix was able to obtain a new $13MM term loan from VERITAS Financial Partners secured by the Company’s Canadian real estate and equipment. 

At the outset of the engagement, the Company had $34.5MM in total debt outstanding and had a debt to EBITDA ratio of 6.63X.  At close, the Company actually secured $36.7MM in total debt and had a 6.3X funded leverage ratio.  However, the Company went from less than $1MM in availability to nearly $9MM in opening availability post closing.  Moreover, the Company’s annual debt service was reduced by nearly $1MM due to the interest savings associated with replacing the factoring facility with a more traditional ABL facility and the more favorable amortization schedule associated with the new secured term loan.

The transaction was led by Vincent J. Colistra and Patrick J. Hughes from Phoenix.  Vincent J. Colistra, Senior Managing Director of Phoenix, remarked  “This financing provides transformational capital to the Company.  The $9MM in newly secured liquidity will allow the Company to operate more efficiently, fund deferred CapEx and compensation and pursue higher margin business as a result of being able to maintain higher inventory levels.”

For over 25 years, Phoenix has provided smarter, operationally-focused solutions for middle market companies in transition.  Phoenix Capital Resources provides seamless investment banking solutions, including M&A advisory, complex financial restructurings, and private placements.

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