Hello all - trying to structure a deal, and could use some assistance thinking through financing and structure options. First time I've done a deal that came w/ real estate attached to an operating business. Not sure how to properly think through options...Here are the key points:
OpCo: - manufacturing company - Revenue: 50 M - EBITDA: 1.5 M - $5 M inventory - $5 M A/R - 3 owners (33% each) - 2 want to exit; 1 wants to roll 100% of proceeds
Real Estate - 3 buildings in North American (500k sq. ft. industrial) - estimated value 3 M for real estate on stand alone basis
Seller Valuation: 12 M
Current thinking is that if seller rolls ~$3M (post taxes), and we contribute additional $1 M for total $4M equity, then raise 8M debt. We will have a detailed plan to present to lenders where we believe we can get company to $4M EBITDA within 24 months, maybe 36 if we are slow to execute. Business has been under-managed.
Would appreciate any thoughts on how to structure. I feel like there is a way to use real estate as asset and either borrow less or put less equity in.
thoughts please.....
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Thanks Jack. Yes, we are thinking about this route. I'm not sure how to calculate this asset into the model. Also, trying to think through whether we do a sale/leaseback to close in conjunction with opco deal, or whether we should wait until we close then explore the sale/leaseback option.
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