Negotiation of New Financing Arrangements

12/20/2011

One of three owners of a franchise system Larkin Hoffman represented wanted to “cash out.”  Larkin Hoffman first assisted in negotiating an agreement with one owner to sell his interest, then negotiated the venture capital financing that redeemed that shareholder.  Two years later, the team assisted the franchisor in simultaneously closing three transactions to refinance the venture capital financing with bank financing and equity. 

After two years of growth, the franchisor had increased its cash flow to put itself in a position to refinance the venture capital financing three years before its maturity.  Led by Chuck Modell and Dan Kadlec, Larkin Hoffman assisted the client in securing bank financing and assisted in a simultaneous closing of the transaction by which the bank financing replaced the venture capital financing (and provided a new credit line to the franchisor), and a new equity investor contributed funds that allowed the remaining shareholders to take a significant dividend, thus rewarding them for their efforts, and putting the company on a solid financial footing for future growth.