Next time (I know...) you are in an Apple ($AAPL) store, I want you to look at the tables. Seriously, look at them.
Why? It’s time for another mezz thread (this time with some pictures!)
Why? It’s time for another mezz thread (this time with some pictures!)
Local company does about $75 Million a year (sales) of high-end wood work. Think corporate offices and the Sun Valley lodge...
Oh, the other half of their business is they do every table in every Apple store - worldwide.
Oh, the other half of their business is they do every table in every Apple store - worldwide.
More than a few years ago they are doing a large corporate office for a Fortune 500 company in Oklahoma City. If you’ve been to Oklahoma City you know the building I’m talking about.
Long story short, that deal goes bad and the local supplier ends up losing $1.5 on that deal.
Long story short, that deal goes bad and the local supplier ends up losing $1.5 on that deal.
Now, losing $1.5 Million on one project creates total chaos on small business cash flow and financials. In this case is NOT happy and decides to cut the company off.
(Side Note: SKOL @Vikings )
(Side Note: SKOL @Vikings )
I get a call looking to replenish their working capital for a year.
The company is a total mess. Operations are decent, but there is no cash, has ALL the collateral locked and is unwilling to play ball, and there are severe family squabbles.
The company is a total mess. Operations are decent, but there is no cash, has ALL the collateral locked and is unwilling to play ball, and there are severe family squabbles.
This is a fourth generation business so the owners are sixteen cousins.
Half the cousins are suing the other half of the family.
Half the cousins are suing the other half of the family.
However, isn’t interested (literally) in one asset. The company has a new contract with Apple to do new tables in support of the pending Apple Watch rollout.
How big? Well, each of those tables cost > $20,000 ... each.
How big? Well, each of those tables cost > $20,000 ... each.
So, will I lend a couple million into a $20 Million contract with the biggest corporation on the planet? Sure.
I become the central hub of a 4 way negotiation (company, bank, and both sides of the family who are refusing to talk to each other).
I become the central hub of a 4 way negotiation (company, bank, and both sides of the family who are refusing to talk to each other).
We get it done!
One year deal (I put some penalties in place to make sure it stayed out there for a year); and everyone is happy.
(Side Note 2: SKOL @Vikings )
One year deal (I put some penalties in place to make sure it stayed out there for a year); and everyone is happy.
(Side Note 2: SKOL @Vikings )
Final Note: 21.4% IRR for a one-year hold.
This deal got the business back on their feet and they are doing great.
A successful deal all the way around!
This deal got the business back on their feet and they are doing great.
A successful deal all the way around!
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