Electric Product Supplier Acquisition - May 2016

Don Rudnik

Location: Detroit, Michigan
Industry: Electric Product Supplier Acquisition
Revenue: $10 Million annually
Line of Credit: $2,500,000 Revolving Line of Credit
Collateral: All Asset Borrowing Base, $1,900,000 Accounts Receivable, $1,750,000 Inventory

The American Dream
The individual was seeking an acquisition of a company that could best use his sales ability for himself instead for someone else. The seller was second generation that enjoyed first generation hard work and sought to retire. The company supplies the Midwest annual of $10 Million per year but sales were falling more to neglect than other factors. Sterling had approached the buyer once before but the bank decided to liquidate instead of sell in that case.

The Sterling Way - Financing Opportunity
Sterling was approached by the buyer for a loan after completing a Letter of Intent. The issues were a significant size (compared to what had been approved), lack of industry experience and minimal (less than 5% of purchase price) equity.

Sterling performed due diligence on books and records and inventory. This generated $2,000,000 toward sales price and $500,000 of working capital needed to stabilize inventory mix at closing. Part of sales price was seller note.

Unlike a Bank, all relationships with Sterling Commercial Credit are asset based lines of credit with full dominion of funds flowing daily into the loxbox to minimize the cost of borrowing. The asset based lines of credit allows for weekly borrowing and a 52 week relationship with a Sterling Relationship Manger. Sterling prides itself on a relationship based partnership that allows maximum access to working capital for our growing entrepreneur.

Donald M. Rudnik
Business Broker