Flexible financing facilitiates MBO

Established Ontario-based consumer brand company opts for sub-debt to keep on track with growth plans.

Brampton, Ontario-based Evergreen Consumer Brands has been providing North Americans with health and beauty products for over 30 years. As part of their continued growth and succession strategy, the company recently partnered with First West Capital Regional Director, David Hastie, to facilitate a management buyout (MBO). Evergreen’s owners opted for subordinated debt financing to buyout a retiring partner to ensure they retained cash flow and capital in the business.

“This is an excellent strategy for businesses like Evergreen that have strong cash flow and lots of growth potential,” says David. “We were able to create a flexible subordinated debt financing solution that allowed them to keep as much capital in the business as possible.”

Evergreen has strong distribution channels and a unique, vertically-integrated business model. “We do everything in-house – concept, formulation, design, manufacturing and distribution – which allows us to be very competitive in a trend-driven market that is constantly fighting for shelf space,” says co-CEO, Bruce Friedman.

He continues, “We will be unlocking our growth potential by deepening our channels of distribution, product development and the acquisition of other synergistic brands, allowing us to be scalable and competitive. We are also moving into the natural cleaning products area, which has become a rapidly growing market segment.”

When it came to selecting a financial partner, Evergreen’s owners knew exactly what they were looking for. “We required a partner that was responsive, flexible and collaborative and, most importantly, understood our business,” Bruce explains. “David stood out immediately; he asked all the right questions and was able to make a commitment with terms and a timeline that made sense for us. He was also able to work seamlessly with our senior lender, which was important to us.”

Bruce also appreciated David’s financial sophistication. “There was no learning curve – David just got us right away and was very supportive of our objectives.”

“There was no learning curve – David just got us right away and was very supportive of our objectives.”

Bruce emphasises the importance of flexibility and tailored solutions when it comes to alternative financing: “One size does not fit all, and lenders like First West Capital understand that customised solutions are much more effective and attractive to businesses.”

Evergreen anticipates future opportunities to work with First West Capital. “We look forward to working with David again as we continue to grow and expand,” says Bruce.

“Evergreen is a great example of a thriving, Canadian, mid-market business. We’re very pleased to provide them the financing they need to complete a management buyout, and look forward to our continued partnership,” says David.