We just closed a $10 million logistics acquisition in Florida’s Treasure Coast for a seafood trucking company owner who is ready to retire after 30 years. Here’s the story…
The owner of a very successful trucking company was finally ready to hang them up after 30 illustrious years in business. However, this was no ordinary trucking company. This was, in fact, a very niche logistics company that provided refrigerated trucking for the seafood industry in Florida’s Treasure Coast. It was an industry leader and was the pride and joy of its owner. He specifically wanted someone to come in and take over his life’s work, a legacy buyer who would run it just like he did!
Sam was the Man! He was a successful executive searching for something different and specifically wanted to acquire something in logistics. Now here’s the biggest question. How was Sam going to purchase a $10 million trucking company?
Now, there is a little-known fact in the SBA world. Everyone’s exposure limit is $5 million. You can’t borrow a penny more even if you tried! We were able to implement a loan structure called “Pari Passu” in which we would make a first note at $5M to max out Sam’s SBA exposure limit, and then pair that with a conventional note in secondary, or pari-passu, position for roughly another $2.5M. Sam put in $1M of his own money and a seller’s note of $1.5M covered the remaining balance.
This business did not have a real estate component. Just a bunch of refrigerated trucks and some really good cash flow. Sufficient enough to make us comfortable with providing $7.5M in total loan dollars over a 10-year period for the purchase. 2.5 over prime on the first $5M SBA loan and 2.75 over prime on the second $2.5M conventional loan. All in a day’s work for Ivanhoe Capital Advisors!