CASE STUDY
The Client:
A privately held packaging and printing company with nationwide operations stood at the forefront of serving both consumer and industrial markets, counting multiple Fortune 500 companies among its clients. With a reputation for quality and reliability, the company secured a transformative multi-year contract with a blue-chip customer, promising significant growth. To fulfill this contract, they required a $22 million investment in advanced digital press and finishing equipment—a critical step to scale operations and solidify their market position.
The Challenge:
The path to seizing this opportunity was fraught with financial and logistical hurdles. Operating with a tight debt service coverage ratio of 1.2x, the company had little room to take on additional leverage. With no cash reserves and limited liquidity, funding the $22 million equipment purchase seemed daunting. The equipment’s 12-month lead time further complicated matters, creating cash flow and timing pressures. Additionally, management faced the dual challenge of securing their senior lender’s approval for new debt and navigating a complex ownership transition by buying out preferred equity shareholders. Failure to align these elements risked losing the contract and stalling the company’s growth trajectory.
Solution:
First National Capital stepped in as the architect of a tailored financial solution, orchestrating a $22 million equipment financing package that aligned with the company’s strategic goals. By structuring progress payments, First National ensured vendors were paid throughout the equipment’s build and installation process, preserving the client’s liquidity and keeping the project on schedule. To ease the ramp-up phase of the new contract, First National built in flexible terms to balance cash flow while production scaled. Working closely with the incoming equity group and the senior lender, First National aligned debt and equity objectives, facilitating a seamless ownership transition and a balanced capital structure. By collaborating directly with the equipment vendor, First National instilled confidence in timely payments, ensuring delivery stayed on track. The result was a smoothly executed deal that empowered the company to fulfill its landmark contract and position itself for long-term success.
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