Growth Capital Case Study

Spectrio

The Business

Spectrio is one of the nation's leading all-inclusive audio/visual (A/V) marketing companies, providing on-hold messaging, over-head music, digital signage and other A/V solutions to national and multinational companies.
"Main Street has been a valued partner for Spectrio and instrumental in our ongoing success. They have financed seven add-on acquisitions. This support has allowed management to focus on growing the business." Aaron Kleinhandler CEO, Spectrio

The Transaction

Main Street was introduced to Spectrio through a lower middle market lending relationship which Main Street has partnered with on multiple transactions. Absent the availability of traditional bank financing, Spectrio sought acquisition/growth capital and a means to retire its existing debt, which was held by a liquidating hedge fund.

Main Street, along with a co-investor, provided 100% of the capital requirement in the form of a senior secured term loan with attached warrants. To support future growth and acquisitions, Main Street provided a revolving line of credit and a conditional term loan commitment for additional funding. Since the initial transaction, Main Street has provided financing for seven follow-on acquisitions, sometimes in as few as 30 days. Main Street maintains a minority equity position in Spectrio.

The Results

Before Main Street Partnership

  • Limited growth prospects due to capital constraints
  • Management team stretched thin
  • Difficult to attract talent
  • Debt held by liquidating hedge fund

After Main Street Partnership

  • Growth prospects coupled with significant capital availability for future acquisitions
  • Financial and strategic support and acquisition due diligence assistance
  • Increased size and scale via acquisitions attracts top sales management
  • Debt held by minority equity investors with an appetite to support the company’s growth through additional funding

Transaction Summary

Company

  • Strong management team
  • History of successful acquisition integration and growth
  • Diversified customer base

Transaction Type

  • Growth capital
  • Seven follow-on acquisitions

Investment Structure

  • Senior secured debt with warrants
  • 9.8% equity ownership through warrants