Greenscapes Home and Garden Products, Inc.: Debt Financing
Industry/Sector: Lawn and Garden Products
Deal Type: Debt Financing
Client Profile: Based in Calhoun, Ga., Greenscapes Home and Garden Products, Inc. designs and sells innovative home and outdoor products, including landscape fabric, edging, frost protection, rubber mulch, bug zappers and stone care cleaners. The company, founded in 2000 by current president Sage Ralston, markets to Lowe’s, Home Depot, Wal-Mart and other big-box retailers.
Client Objectives: Ralston positioned his company for growth within the home and garden space by licensing certain products to sell under two of the industry’s leading brand names, Scotts and Black Flag. Due to the seasonal nature of the company’s products, the Company required additional financing before and during “high season.” Ralston and his management team sought to finance the company through debt as opposed to equity. Ideally, they wanted a limited or no personal guarantee of the debt. The team explored options offered by traditional commercial banks, but they were unable to find a partner that met the needs of Greenscapes.
The Process: Greenscapes engaged FourBridges in May 2011 to complete a “Bridge to Capital” analysis. As part of the service, FourBridges created a detailed monthly financial forecast; identified the capital required to fund the company’s business plan; determined whether the financing could be completed with debt; researched potential capital sources; and performed a market-based valuation.
After surveying the market, FourBridges recommended that Greenscapes obtain an extension from its current lender and seek additional financing within the next six months. The process was restarted with the goal of selecting a new senior lender and an increased line of credit. FourBridges updated the company’s financials and memorandum, and they received interest from several parties. Ultimately, Cole Taylor Business Capital, the asset-based lending division of Chicago-based Cole Taylor Bank, was selected as the lender.
The Result: Cole Taylor provided a $25 million senior credit facility to Greenscapes that included seasonal overadvances. FourBridges was also able to negotiate a limited guarantee that reduced to half after 12 months and expired after 24 months.
Before engaging FourBridges, Ralston and his team were unaware of Cole Taylor as a lending option; utilizing FourBridges’ extensive, nationwide network allowed Greenscapes to connect with a partner they had never considered. Cole Taylor offered a creative solution that fit the company’s financing needs, and both parties anticipate a long and successful relationship.