First Capital provided a $9 million asset-based lending facility to Sheffield Manufacturing, in conjunction with its acquisition by Hancock Park Associates and Next Point Capital. The senior credit facility consists of a working capital revolver collateralized by accounts receivable and inventory, and a term loan collateralized by machinery and equipment. The financing was used to support the acquisition, refinance existing debt and provide for ongoing working capital needs.
Sheffield is a leading manufacturer of precision-machined components for the aerospace industry, supplying parts for premier commercial and defense customers such as Boeing, Lockheed-Martin and Northrop Grumman. Hancock Park Associates is a Los Angeles-based private equity firm with over $400 million invested in middle market companies since 2002. Next Point Capital is a private equity firm which supports management buyouts, balance sheet restructurings and corporate divestitures focused in the lower middle market.
“We are happy to have closed this deal with Hancock Park and Next Point, and to develop a long-term relationship with a quality company like Sheffield,” said Mark Orlando, senior vice president at First Capital. “We worked hard with management to understand the business and were flexible in evaluating alternative capital structures in order to effectively close the transaction.”
Gene Ruddy, CEO and president of Sheffield Manufacturing, Inc., stated, “We are excited to have First Capital as our lending partner to support our current business and long term growth strategy. The First Capital team took a unique approach to best understand our company’s history and future opportunities, in order to offer a preferred credit solution which we could not find elsewhere.”
Mark Mickelson, founding partner of Next Point Capital, indicated, “First Capital’s ability to think through issues and structure complex transactions sets it apart from other run of the mill asset based lenders. The entire deal team worked diligently throughout the process to address various issues that came up and resolve them to successfully close the transaction.”
Mike Fourticq, partner of Hancock Park Associates, said, “I was impressed with First Capital’s creative approach to the transaction and flexibility to get the deal done. We’re pleased to have them as our financing partner to support Sheffield’s business and look forward to more opportunities to work together.”
This transaction was sourced by Mark Orlando and will be serviced by First Capital’s Western Region located in Los Angeles and managed by ABL Western region manager Matthew Grimes.
First Capital provides working capital financing ranging from $2 million to $25 million primarily to growing and middle-market businesses with annual sales ranging from $10 million to $250 million. Credit facilities are typically in the form of asset-based lines of credit.