Matrix Capital Markets Group (804) 780-0060 - Case Study: Rossi American Hardwoods

Case Study: Rossi American Hardwoods & Hardwood Lumber Manufacturing - Exclusive Sale

Situation

Owners of Rossi American Hardwoods and Hardwood Lumber Manufacturing, Inc. were seeking a Private Equity Fund to support a targeted consolidation strategy.
Due to leveraged balance sheets, working capital availability had become tight thereby restricting operating flexibility.

Objective

Identify PEG’s that would be willing to research the industry deeply in order to overcome what appeared to be less favorable characteristics, such as volatile pricing, commodity risk, seasonality and heavy capex requirements.

Solution

Matrix used its relationship with HIG Capital to avoid a broad, time-consuming process. Several initial face to face meetings were held to gauge preliminary interest, which was determined to be strong. An LOI was executed within 60 days.
Sellers ultimately experienced a liquidity event, management participated in the equity and significant availability was created to run the business. In addition, HIG and Fifth Street committed to providing additional capital for continued acquisitions.