Acquisition & Growth Financing Case Study
The BusinessSambaSafety's patented technology and advanced workflow management deliver a full range of driver risk management solutions for fleets and insurance customers.
Cerca Group, LLC, a private investment firm, originally approached Main Street looking for debt and equity financing to help facilitate the acquisition of SambaSafety. In 2011, attracted to the company’s SaaS based revenue model, Main Street made an initial debt and equity investment in SambaSafety of $3.95 million.
After Main Street’s initial investment, Main Street’s investments grew to total debt investments of $26.4 million and total equity investments of $2.1 million as Main Street provided additional funding to support SambaSafety’s significant growth opportunities. During Main Street’s involvement, SambaSafety grew its employee base from 30 to over 130 people and significantly increased revenue and profitability. By participating in the equity and providing 100% of SambaSafety’s debt requirements, Main Street was able to structure the transactions to align interests among all parties including the equity sponsor, the current management team and Main Street. Throughout the partnership, Main Street was able to provide critical strategic support and financing to allow the company to execute on its growth plans.
In 2016, SambaSafety completed a majority recapitalization of the company led by a private equity group. The transaction resulted in a realized total internal rate of return to Main Street of 34.7% and a 2.3 times money invested return and significant value creation for SambaSafety’s management team and equity sponsor.Since then, Main Street has invested an additional $25.7 million in the business to help the company achieve its growth initiatives. During Main Street’s involvement, SambaSafety has grown its employee base from 30 to over 100 people and has significantly increased revenue and profitability. By participating in the equity and providing 100% of the debt requirement, Main Street was able to structure the transactions to align interests among all parties including the equity sponsor, the current management team and Main Street. Throughout the partnership, Main Street has been able to provide critical strategic support and financing to help grow the business.
Before Main Street Partnership
- Silent partners held meaningful ownership
- Limited depth of management
- Limited growth prospects due to capital constraints
- Difficult to attract talent
- Irregular corporate governance
After Main Street Partnership
- Silent partners receive desired liquidity
- Main Street participates in business development, including introductions to potential customers and developing strategic initiatives
- Main Street assists in negotiating and closing a transformational acquisition
- Elements to attract talent in place; Main Street has introduced key management
- Active internal and external board participants introduced by Main Street
- Recurring revenue, SaaS based business
- Strong management team
- Attractive growth opportunities
- Acquisition financing (2011)
- One-stop financing
- Growth capital (2012)
- Senior secured debt
- Common equity