Wood Framing Company Buyout By 2 Employees In Colorado

Two employees buyout a wood framing company they worked at in Colorado for $9.5 million. Here is how we structured a pari-passu deal to close it.

So, these two long-time employees of this wood framing market leader in Colorado wanted to buyout the company from the current owners. The current owners were thrilled to be selling to someone in the organization itself.

One of these employees was in charge of the financials of the company and the other was the lead project manager. These two had the back office and the boots on the ground covered.

They also teamed up with another individual outside the company who was going to take the business to the next level with the amount of experience and track record he had.

You could say they were nitro and he was glycerin! You know what happens next…Bam! Explosion!…and that is exactly what this company will do in the next few years with these three at the reigns!

Now financing a $9.5 million business acquisition is never an easy feat! We put this employee buyout together with our “soon-to-be-famous” Pari-Passu structure.

It took a $5 million SBA 7a loan in the first position along with a conventional loan in the second position of $710,000. This also included $600,000 in working capital because they would need that much to keep the ship on course.

The buyers came in with a little more than $1 million in cash and the current owners actually negotiated a $3 million seller note on the difference because they really wanted these loyal employees to have the business they worked so hard to build.

They knew their life’s work was in good hands! Here is a short breakdown to keep it simple:

• $5 Million SBA 7A Loan
• $700,000 Conventional Bank Note (pari passu position)
• $1 Million Seller Cash Influx (you can call it a down payment)
• $3 Million Seller Note (both buyer and seller wanted this)

See….It’s all in the structure!

And People Say there’s NO Loyalty Anymore…