$4.175M Sale Leaseback as Acquisition Financing for Foodservice Equipment Provider Add-On

Background:

The Ascension team represents the private equity owner of a leader in foodservice equipment solutions who provides a full range of services, including design, build, contracting, manufacturing, installation, and equipment. With over 1,000 completed projects totaling over $1 billion in construction value, the Company’s customers include renowned casinos, hospitals, hotels, restaurants, and academic institutions. The Company was executing an add-on acquisition of a commercial kitchen supply and design company, who would further the company’s vertically integrated competitive advantage and extend its buying power.

Client Objective:

The private equity sponsor partnered with Ascension given the team’s uniquely robust experience closing sale leasebacks simultaneously with OpCo acquisitions. By structuring a sale leaseback into the transaction, the sponsor was able to use the proceeds directly in the deal’s cap stack, significantly reducing their out-of-pocket equity requirement for the add-on.

Solution:

The Ascension team ran a competitive investor outreach process amongst its curated list of private and institutional investors. The team considered the sensitive nature of the transaction and the rapid timeline while focusing on maximizing the economic and lease terms for the company and identifying groups with the strongest certainty of execution, given the expedited nature of the transaction. After multiple rounds of bidding, Ascension and the sponsor selected an active, sophisticated institutional investor who Ascension has previously worked with, successfully closing within the required timeframe, simultaneously with the acquisition of the OpCo.

To learn more about the benefits of executing a sale leaseback simultaneously with your OpCo acquisitions, reach out to Chelsea Mandel and the Ascension team by filling out the form below.