Rhyno Equity Group

Creating competitive tension among lenders

Background

Rhyno is a private equity firm looking to acquire mid-market manufacturing companies in the GTA. The five partners are strong operators and entrepreneurs.

Rhyno made an offer on a company (its largest acquisition to date) with a tight closing schedule. The five partners approached FirePower to generate multiple proposals from lenders, both senior and junior, so that they could select the most suitable financing structure to support the purchase.

Solution

With Rhyno's focus on the acquisition -  due diligence, managing the relationship with the seller, and preparing for post-closing, the partners wanted FirePower to manage the debt financing process. FirePower's investment banking team prepared a deal package and distributed it to 23 prospective lenders, then ran an auction that generated 8 proposals with significant variance in terms, cost and amortization. Through the auction process and subsequent negotiation, FirePower was able to identify the best lender for RhynoThe key takeaway: while senior banks may look the same, they view risk differently, so it's essential to generate multiple proposals across banks to expose the differences, and then negotiate best pricing and terms.

 

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