The interim management of an industrial and construction equipment rental company sought an expedited turnaround plan.
Industry: Industrial and Construction Equipment
Subject: Eagle High Reach Equipment, LLC, headquartered in La Mirada, California, was a provider of rental equipment to the industrial, construction and entertainment industries. The company rented aerial work platforms, forklifts, trucks, backhoes and other industrial and construction equipment from its four locations in Southern California.
Circumstance: Summit was approached by the interim management of Eagle to support the company’s financing turnaround. Prior management of Eagle had been accused of fraudulent financial activities, which left the company seeking an expedited turnaround plan to avoid terminated credit lines.
Solution: In less than two weeks from the initial contact with interim management, Summit completed due diligence and agreed to a complex joint venture with Eagle, which included purchasing the senior secured debt of Eagle and providing the company equity. During this period, Summit worked extensively with interim management to assess the overall financial health of the company and its assets and to begin the implementation of the turnaround plan.
Summit worked with Eagle’s management to stabilize the company’s operations, which included securing a $30 million asset-backed loan that would partially refinance out Summit’s debt, help complete the planned restructuring and provide ongoing working capital and capital expenditure funds. Together, Summit and Eagle closed this refinancing transaction in less than two weeks under terms that provided an adequate financing facility to fund the company’s growth and future operations.
Outcome: Based upon positive market conditions, Summit and Eagle’s interim management began to explore a sale of the company. Just over two years after Summit first became involved with the transaction, Eagle was sold to a larger competitor as part of an initial public offering.