A family liquor store with 26 locations wanted to purchase a competitor with 23 locations in a nearby city. The purchase would double revenues and provide efficiencies through operational consolidation. The management team of the acquired entity did not want to stay or assist in transition. The year 1 expenses for rebranding and conversion of inventory and sale transaction systems was estimated at more than $1.25M and needed to be funded from operations.
The family store's existing lender (that had primarily focused on real estate financing) was no longer a good fit. Old National Bank provided a line of credit and a term loan to refinance all existing debt and provided financing to acquire the competitor. In analyzing the repayment and debt structure, Old National provided a unique stair-step structure on debt repayment, which provided lower principal payments in the first year. This plan allowed the consolidated operations to cover costs of a new point-of-sale system and funds to convert store signage. The borrower appreciated the unique term debt structure which differentiated Old National from other lenders.
This family liquor store has continued to grow, with Old National helping to finance three additional acquisitions for a total of 76 locations.