7th largest commercial receivables-based financing company in the US. $600 million in purchases per year. $60 million average portfolio size. $10 million annual sales. $50 million debt.
- The Company was the 7th largest commercial receivables-based financing company in the USA, providing over $600 million of purchases per year with a $60 million receivables portfolio.
- After an external fraud wiped-out the Company’s equity, the company’s lenders entered into a forbearance agreement which required (1) a Chief Restructuring Officer to run operations, (2) an infusion of outside capital and (3) refinancing of the existing credit facility.
- The company also required a third party review of its internal underwriting and credit policy procedures and fixed costs.
- Ownership engaged MorrisAnderson as CRO and as investment banker to refinance senior secured debt, raise equity capital and/or sell the business.
- Morris Anderson implemented an employee reduction program of 25%, a concurrent quality improvement plan in certain key positions, a portfolio review and clean-up, a complete revamping of the credit process, and a selective client portfolio optimization process.
- Challenges included lenders with differing interests, two lenders with a 100 cent basis and a third with a 72 cent basis, and management that did not want the recapitalization and fought the process after the business operated profitably.
- The Company returned to operating profitably within 90 days.
- MorrisAnderson secured a $50 million three year credit facility and a change of control infusion of $8 million of new equity capital.
- Prior ownership remained in the capacity of executive management with an ongoing share of future profitability.
- The company is now called Greystone Commercial Services, LP.