Dividend Recapitalization Case Study

OMi

The Business

OMi designs, manufactures and installs overhead cranes and other material handling equipment, as well as providing after-market support with inspections, maintenance services, and replacement parts.
"Main Street's ability to provide 100% of the transaction proceeds and patiently weather some tough business cycles allowed our management team to position the company for the success that it is experiencing today." Mike Bunnel CEO, OMi

The Transaction

OMi was introduced to Main Street by a local intermediary representing the business for sale. With a significant portion of their net worth tied up in the business, OMi’s owners sought a financial partner who could provide partial liquidity while still allowing management to maintain operational control and participate in the continued growth of the business. After evaluating a number of options, including a sale of the company, OMi selected Main Street as the ideal financial partner.

Main Street’s initial investment, a senior secured term loan and equity investment, provided 100% of the capital to facilitate the recapitalization and fund growth initiatives. Main Street’s structure also facilitated granting equity to a key manager who did not previously have ownership in the company. OMi has since refinanced the term loan, and today Main Street and management enjoy a 50/50 voting equity partnership. Throughout the partnership, Main Street has provided administrative and financing assistance as well as strategic support in reviewing expansion and acquisition opportunities. Given its vast network of companies and industry contacts, Main Street has also facilitated business opportunities and customer introductions.

The Results

Before Main Street Partnership

  • Difficult for management to obtain partial liquidity while still maintaining operational control
  • No path for non-owner management to own equity
  • No “sounding board” for historical owners with respect to operational and strategic matters

After Main Street Partnership

  • Owners obtain personal liquidity to diversify assets and remain operationally autonomous
  • Key manager holds ownership for first time
  • Formal board is in place and an ongoing dialogue continues between the company and Main Street

Transaction Summary

Company

  • Strong management team
  • Attractive growth opportunities
  • Proven market position

Transaction Type

  • Dividend recapitalization
  • One-stop financing

Investment Structure

  • Senior secured debt
  • 48% equity ownership