Despite the extremely aggressive Debt / Ebitda ratio, mezzanine finance was attracted. In one hand, this met the company’s funding needs and timing for returning funds and on the other, it provided sufficient investor comfort and reduced risks to an acceptable level.
The key element of the deal was the ability to take Ebitda into account not only by the investing company, but also by Ebitda’s competitors that were purchasable during the transaction. This allowed the return of the Debt / Ebitda ratio to the normal values, which, taking into account the profit growth resulting from the merge, allowed for a good return both for the investor and the company.
Business: Revenue $130M, Ebitda $2M, more than 10K orders per day.
Deal: Attracting $60M to buy competitors.
Deal Industry: Internet, Retail
Deal Type: Private Equity