CapX Partners announces the closing of a loan facility that can grow to $100 million to support the growth needs of Ziosk. Ziosk is the creator of the restaurant industry’s first ordering, entertainment and pay-at-the-table tablet and commands 95% of the deployed market. The funds will be used to support agreements with Olive Garden and other restaurant brands to deploy Ziosk tablets across the U.S.

Ziosk is the clear cut industry leader serving more than 25 restaurant concepts across all 50 states. When the Olive Garden deployment is complete, over 150,000 tablets in 3,000 locations will be interacting with more than 50 million guests per month, demonstrating the continued momentum of Ziosk in the restaurant industry.

Olive Garden is the leading Italian restaurant brand in the casual dining segment with more than 840 restaurants and 96,000 employees and more than $3.8 billion in annual sales. Olive Garden is a division of Darden Restaurants, Inc., which owns and operates more than 1,500 restaurants that generate over $6.8 billion in annual sales.

“Ziosk was seeking a strategic financial partner to assist in the expansion of its network,” said Eric Starr, CapX Partner. “Ziosk Chairman and Co-Founder Jack Baum and his team have created a fantastic platform for Olive Garden’s patrons. We are excited, along with our funding partners Garrison Investment Group and Victory Park Capital to provide support for Ziosk’s current and future restaurant partnerships.”

Ziosk provides a technology platform for the restaurant industry. The flagship product is the Ziosk tabletop tablet that enhances the dining experience for several audiences.  It gives guests more control over payment, entertainment and information. Ziosk also helps restaurants improve their service, digital relationship with their guests, operational efficiency and profits. The Ziosk benefits servers by increasing their tips and gives sponsors a unique and valuable way to reach their audiences.

“We are thrilled to have CapX supporting Ziosk and our restaurant partners, and this financing further supports our mission to revolutionize pay-at-the-table solutions at restaurants. We are honored to have their confidence, commitment and support as we grow and look forward to a valuable partnership,” stated Jack Baum.

About Ziosk 

Based in Dallas, Ziosk is the creator of the first entertainment, ordering and pay-at-the-table tablet for the restaurant market. The industry leader commanding 95 percent of the installed tabletop tablet market, Ziosk has deployed more than 150,000 Ziosk^® tablets in over 2,500 restaurants across all 50 states. The Ziosk^® technology is an enterprise grade solution, featuring a 7-inch tablet and encrypted credit card reader, resides on each table and enables guests to see menu items, play games, view entertainment, order food and beverages and ‘pay on demand;’ all which gives guests control over their dining experience. With its interactive capabilities, Ziosk and its footprint have created the Ziosk Media Network™, a digital media platform for partners to create engaging experiences at the point of purchase. With over 400 million consumers served and growing, Ziosk is revolutionizing the experience and economics of dining. For more information, please visit www.ziosk.com.  Ziosk is the owner of the Ziosk^®, Ziosk Media Network™ and zTrivia™ family of marks and logos.

Gray Line of Tennessee operates over 100 commercial vehicles providing charter coach, regional transit, casino runs, school bus services, and sightseeing tours offering visitors to Nashville the ultimate thrill in experiencing the Music City. XMi acquired a controlling interest of GLT in 2012 in partnership with the state of Tennessee’s innovative “TNInvestco” program.

Phase One Capital, working on behalf of Gray Line, approached CapX looking for a combination of growth capital and new term debt financing totaling $7.5 million that could be used to refinance Gray Line’s existing bank facility and potentially provide a dividend payout to one of the founding brother’s roll over value from the original private equity transaction. XMi offered up their ability to finance future capex spend via a new captive leasing special purpose entity if CapX could focus on both bank debt refinance and former shareholder redemption.

“It’s easy to see why Jeff and the CapX team have been as successful as they’ve been.  They focus on the important issues, move quickly, and are easy and pleasant to work with,” says James C. Phillips, Jr.  XMi Holdings, Inc., parent of Gray Line of Tennessee.

CapX Partner’s Jeff Pfeffer was recently interviewed by Pitchbook on trends in venture debt as well as equipment financing. First question from Pitchbook’s Garrett Black: “Do you see an increase in venture debt usage as part of the trend of companies seeking higher and higher valuations, or what else is driving its popularity?” Read the complete article for the answer and more!

For over 25 years, Adler Hot Oil Services has been a trusted service provider, serving energy drilling companies throughout the Rocky Mountain region and parts of the Northwest with its fleet of specialty trucks. Adler was well positioned for future growth, but then the rapid decline in oil prices slowed down U.S. oil production. Because they were successful in retaining all of its customer relationships throughout the downturn, their services were  still in demand. When Adler needed to finance the purchase of additional equipment necessary to support these customer relationship, Adler and Industrial Innovation Partners were informed of CapX’s financing niche and made contact.

“CapX Partners is truly a distinctive growth capital provider. They invested significant time and effort to understand the uniqueness of our company and growth strategy even though our industry, oilfield services, is currently out of favor. It is this thoughtful, forward looking mindset that sets CapX Partners apart and makes them great partners for us.” Nicholas Behl, Managing Principal, Industrial Innovation Partners.

Comvest and CapX served as the stalking horse bidder at the inception of the bankruptcy sale process, which ultimately proved to be the prevailing bid. Comvest and CapX also previously provided debtor-in-possession (“DIP”) financing to the Company to support the Company’s bankruptcy case and sale process. Comvest and CapX’s winning bid was approved today by the U.S. Bankruptcy Court for the District of Delaware paving the way toward a closing of the sale in early June. Under the terms of the Asset and Purchase Agreement, Comvest and CapX will acquire substantially all of Karmaloop’s assets and assume certain trade and other obligations.Comvest Partner, Robert O’Sullivan, said, “We’re excited to enter into this new chapter of the Karmaloop story. We’ve been involved with the Company since 2012 and are big believers in the brand’s power and potential. As such, we’re delighted that the process now allows us to deepen our relationship with the brand. We’ve already invested nearly $3 million in DIP financing during the bankruptcy process, and are investing millions more as part of the acquisition. With ample capital for growth and a debt-free balance sheet, Karmaloop is going to have a fantastic future. The loyal, dedicated Karmaloop customer base will see, over the coming months, new initiatives dedicated to forging a strategic growth path while retaining and building on the essence of the Karmaloop brand.”

Karmaloop founder/CEO Greg Selkoe will transition his role to a new CEO, who will be announced next week. Selkoe will remain with the Company in an advisory role.

According to O’Sullivan, “Stay tuned for additional Karmaloop news soon. We anticipate sharing leadership news next week, and we will also begin rolling out exciting new initiatives that will respond to and support our customers’ and business partners’ evolving needs. We want to sincerely thank all of the employees, vendors and customers who have worked incredibly hard to maintain the business under difficult circumstances and have helped us understand what a truly unique asset it is. We look forward to working with all of them to restore the business to its former glory and beyond.”

The restructuring and new funding will eliminate existing debt that was incurred to support the launch of four new business divisions and the development of television content between 2011 and 2013. Over time, these ventures proved to be economically unviable and the debt that remained as a vestige of these past efforts hindered working capital for the core business. The main property,Karmaloop.com, has continued to thrive with close to four million unique visitors each month.

About Comvest Partners

Comvest Partners is a private investment firm providing equity and debt capital to middle-market companies across the U.S. With over$2.1 billion of assets under management, the firm includes seasoned, senior level operating executives who partner with management and entrepreneurs to grow businesses and create long-term value. Since 2000, Comvest has invested more than $1.6 billion of capital in over 135 public and private companies.

About CapX Partners

Founded in 1999, CapX Partners is a specialty finance company that focuses on private equity and venture backed portfolio companies looking for debt financing in the $2-$20 million range. CapX provides senior and mezzanine debt including lease lines and favors manufacturing, distribution, technology, energy and healthcare industries with an emphasis on revenue producing fixed assets. For more information on CapX, visit www.capxpartners.com.

 

In this twenty-first century phenomena of cheap money, interest rates have never been this low for such a long period of time. American business has been sitting on cash with some estimates placing the amount at $1.8 trillion. But now, with continued signals of U.S. economic improvement, investments by businesses are now forecast to reach a record $1.5 trillion in 2015. Combine low interest rates with a growing number of increasingly confident small- to medium-sized businesses focused on making equipment improvements and the result: more capital moving to specialized niches of the debt capital space.

CapX Partners’ Jeffrey Pfeffer writes in ABL Advisor on how non-traditional funding sources such as venture capitalists are exploring opportunities in the equipment finance sector.