Company Overview
Founded in 1950, George F. Kempf Supply Co., Inc. (“Kempf”) is a building supply company serving the Greater Philadelphia area, northern Delaware and central New Jersey markets. The Company primarily supplies drywall, insulation, acoustical ceiling tiles, metal studs and lumber directly to construction contractors. The Company’s products are primarily used for commercial construction projects.
Situation
In 2013, the Company sustained losses largely due to working capital constraints that forced the Company to turn down significant sales opportunities and prevented the Company from capturing significant early payment discounts from its suppliers. The lack of working capital, inability to accept payment terms in excess of 60 days and loss of supplier discounts constricted the Company’s ability to operate at peak levels. The prolonged stress of these factors caused the Company to engage Griffin to orchestrate a refinancing and restructuring package to maximize the available liquidity and working capital required to return to normal operations.
Solution
Griffin managed a competitive capital raising process to privately place the senior credit facilities. Griffin obtained multiple financing offers, negotiated terms with the prospective lenders and was successful in securing financing collateralized by Kempf’s assets, including a new term loan facility. In order to maximize liquidity, Griffin simultaneously negotiated a restructuring of the existing lenders facility, including an increased mortgage facility. This additional liquidity was crucial to the success of the company, providing the ability to fund its growth and capital needs in the coming years. The Company ultimately selected HVB Capital Credit, LLC as its senior lender for the transaction, and the transaction closed on March 31, 2015.
For more information on this transaction, contact Thomas G. Whalen, Senior Managing Director, at 610.205.6115 or Glenn S. Bernabeo, Senior Managing Director, at 610.205.6034.
