Full Market Tender & Raise New Debt
$23.5m Commercial Facilities
Service
Business & Corporate Finance, Debt Advisory, Market Tender
Funding Amount
$23.5m
Funding Purpose
Refinance + Growth Capital & Working Capital
Industry
Real Estate Services
The Scope
- Our client was looking to raise capital (debt or equity) for a high growth technology business and at the same time review their $19.95m commercial facilities for a well-established real estate services business.
- The client was unsure if the technology business would be able to raise debt due to the stage in its business life cycle and believed the real estate services business was paying a premium for its funding.
- After a preliminary review we determined there would be scope for the technology business to raise debt and we also confirmed the client’s belief that their facilities were ‘outside of market’ in terms of pricing and structure.
- We recommended a full market tender of the real estate services business in conjunction with exploring debt options for the technology business.
- Nexus were engaged to manage the whole tender & debt exploration process including selecting financiers (including appropriate bankers), presenting funding requests, managing pricing & structure negotiations and assisting with closing the transaction.
What We Did
- Prepared separate comprehensive information memorandums illustrating the strengths of each business and their competitive advantages.
- Highlighted the rationale behind the tender and mapped out the short and medium term objectives for the real estate services business.
- Prepared forecast modelling for the technology business to determine appropriate levels of growth capital & working capital and stress tested modelling based on multiple downside scenarios.
- Distributed the IMs to appropriate Banks, carefully selecting the right Banker to ensure the tender received the required skill and attention.
- Fielded queries from Bankers in relation to the business & its financial performance to assist with their preparation of credit paper.
- Compiled detailed dashboard for the client to review which summarized all key details of each Offer, the pros and cons, and our recommendations.
The Result
- We received four credit endorsed Term Sheets from Banks within two weeks of submitting the IMs with two Banks willing to fund both the real estate services business and the technology business.
- The real estate business Offer saved the client over $1m in cash per annum through ~$400k interest saving and an additional ~$600k in reduced amortization through conversion of P & I facilities to interest only.
- The significant cash saving has opened up a number of opportunities including the ability to bring forward acquisitions, accelerate growth and increase borrowing capacity.
- The technology business Offer achieved $2.5m in Growth Capital and additional $1m in Working Capital.
- This has enabled the business to accelerate expansion plans without diluting equity in a volatile equity market.
- We managed the process end to end with minimal impost on the client to enable them to focus on their businesses.
- In the words of our client – ‘Nexus made the process of borrowing $20m easier than financing a $70k vehicle.’
