The Situation
A leading food and beverage container manufacturing company (the “Company”) recently upgraded its largest plant with new, more efficient manufacturing lines and sought sale-leaseback financing after the upgrades were completed. The Company was looking to improve efficiencies in its largest plant. Due to industry shifts in some of its end markets, it was critical for the Company to invest in more efficient manufacturing capabilities in order to compete and maintain its longstanding customer relationships.
The Company was looking for sale-leaseback financing to fund the plant improvements. The Company approached an equipment finance company (the “Originator”) who was familiar to Atalaya but with whom we had not yet worked on a transaction. Because of the large size of the financing request, the Originator reached out to Atalaya to syndicate a portion of the equipment financing.
The Solution
In Q4 2019, Atalaya closed on $16.5 million of equipment financing for the Company, with the Originator also funding some additional dollars. Leveraging the Originator’s lease documents, we were able to move quickly to fund the Transaction by year-end, which was important to the Company.
We were able to expeditiously underwrite the Company, the plant, its key customer relationships and the equipment being financed. Additionally, we liked that the Company was aligned with its lessors, given its meaningful upfront investment in the soft costs associated with the build-out.
The Result
The Company was pleased with the overall execution and the Originator was seemingly impressed by our ability to close on a tight timeline. The sale-leaseback financing provided liquidity to the Company and today, the updated plant can produce nearly 50% more tons of output on an annual basis.
Additionally, due to the mutually positive working relationship on this initial transaction, Atalaya expects to work with the Originator on other equipment financing opportunities in the future, including future transactions with the Company.
