CapX Supports Arandell’s Expansion With Asset Acquisition Financing
Arandell Corporation is a premier catalog printing and omnichannel solution provider. Arandell had been searching for strategic acquisitions and methods of expansion to both support their existing customer base as well as broaden their service and format offerings. Via a new strategic partnership with Continental Web Press of Itasca, IL, Arandell and Continental sourced a corporate asset spinoff located in Walton, KY. The Kentucky plant assets feature three web presses of various widths including two double web presses that will significantly enhance Arandell’s capabilities and capacity. Arandell’s bank invited CapX into the asset acquisition opportunity due to CapX’s prior financing relationship with Arandell (Fund IV vintage) and good split lien working relationship with the bank. Along with the Kentucky asset acquisition, Arandell was looking at improving its efficiencies in the Wisconsin plant and sought a leasing solution for an automated co-mailer unit.
“We were looking for a one-stop equipment finance solution to support our Wisconsin plant capital expenditure needs as well as financing our plant expansion acquisition in Kentucky. CapX was there for us four years ago when we recapitalized our company, and we did not hesitate going back to them – they know our business, work well with our bank and can move quickly with certainty of closing" stated Brad Hoffman, President and Chief Executive Officer at Arandell Corporation.
CapX seized the opportunity to work with Arandell again. After reviewing the capital expenditure rationale and payback analysis on the co-mailer unit, CapX quickly offered a tailored capital lease financing that met Arandell’s needs. With fixed monthly payments of four years and a bargain purchase option, Arandell keeps the depreciation for tax purposes and has a hedge against rising interest rates. As part of the Kentucky asset acquisition, CapX provided a borrower-friendly advance rate that met Arandell’s capitalization plans. A second lien on all other assets allowed by the bank mitigated CapX’s initial risk exposure and rounded out the win/win of the opportunity for Arandell, the bank, and CapX. CapX provided a five-year senior secured term loan with a fixed rate providing sound budgeting.
“We were pleased “to be invited under the tent again” with Arandell and their bank for the Kentucky acquisition and growth capital need. We have great respect for Brad Hoffman and his dedicated team of managers. A number of lenders will shy away from the printing industry. CapX is always attracted to focused, discipline management that has a sound strategy and executes. The second plant location for Arandell will create a number of revenue opportunities and put the company in a new competitive landscape.” - Jeffry Pfeffer, Managing Partner at CapX Partners
In 1999, Jeff co-founded CapX and is the firm’s Managing Partner. His responsibilities include firm management, leading new business development, and serving as CFO for CapX.
Jeff has over three decades of small to midsize business finance experience focusing on delivering superior risk-adjusted returns to CapX’s investors. He co-founded the firm during an investment vintage when alternative secured financing strategies were deemed not “sexy.” He and his partners raised over $450...