Transactions
Arro Corporation
Hodgkins, IL
Food Co-Packer and Co-Manufacturer
INVESTMENT AMOUNT: $2,250,000
INVESTMENT DATE: September 2014
“Our company experienced a high level of growth which required capital support beyond our standard commercial banking relationship. Not only was CapX Partners able to meet our needs, but they acted more as an advisor and partner than a lender. The relationship goes well beyond credit and has been a critical factor in the growth and success of Arro.”
— Patrick Gaughan, President, Arro Corporation
INVESTMENT SITUATION
Arro started in 1986 as a basic break-bulk station for inbound railcars or bulk trucks of dry commodities that would be packaged into smaller pack sizes for distribution. In 1995, Patrick Gaughan acquired Arro, leaving his role in commercial lending with LaSalle National Bank. Following two acquisitions (1997 and 1999), Arro entered co-manufacturing in 2000 with Kraft as its sole customer in that sector. In the last ten years, Arro has added over $60 million of annual revenue, the bulk of which has come in the last three years.
Arro is a co-packer and co-manufacturer of a wide range of liquid and dry products in the food and pharmaceutical industries, ranging from a gram size package to a full size rail car of product, including hot and cold beverages, bakery, pizza, specialty sugar products including starch, dextrose, phosphates, oils, syrups and related commodities.
THE CAPX APPROACH AND SOLUTION
Privately owned and supported by an experienced management team, Arro has successfully expanded its customer base and penetrated new markets. To fulfill the Company’s goal of meeting short-term capital growth needs, CapX provided a $2,250,000 secured term loan.
“Time and time again, Pat Gaughan impressed us with the vision he had for growing Arro Corporation. He laid out a logical path to for us to follow – a path that required an appropriate amount of growth capital. We are pleased to be able to provide the capital he needed and to have the opportunity to work with Pat and his fine company.”
— Jim Hallene, Founding Partner, CapX Partners