Where Can I Find a Flexible Capital Provider that Understands Cross-Border Deals?
Reliable Parts, founded in 1933, is a leading value-added distributor of appliance parts in North America with headquarters in Seattle, Washington and Vancouver, British Columbia. The company distributes nearly 75,000 SKUs to both wholesale and retail customers through the e-commerce, direct mail, store-level and call center sales channels. PNC Mezzanine Capital (PNC MC) provided an equity co-investment to support the leveraged buyout of the company by Svoboda Capital Partners.
Svoboda Capital Partners selected PNC MC as their financial partner to acquire Reliable Parts because of PNC MC’s investment flexibility, their confidence in PNC MC’s ability to close and PNC MC’s deep experience in the distribution space. As dynamics evolved during the course of closing the deal, PNC MC had the flexibility to move from investing in subordinated debt with a small equity co-investment to providing a stand-alone $15 million equity co-investment in order to assist Svoboda Capital Partners in closing the deal.
Svoboda Capital Partners and PNC MC saw potential in leveraging the company’s existing market position to focus on several growth initiatives, including geographic and product line expansions through both acquisition and greenfield openings.
During due diligence, Svoboda Capital Partners and PNC MC identified certain areas for operational improvement and some key management additions that would strengthen the business. These moves were designed to allow the company to expand the relationships with its stable and diverse customer base and better leverage its multi-national distribution network.
Since closing, Reliable Parts has grown organically and through acquisition, already doubling the size of their US operations. The company continues to implement process improvements and efficiencies, add talented executives and explore new lines of business. PNC MC has been a contributor to the company’s success through active participation as a member the board of directors.
“I’ve worked with PNC Mezzanine Capital for more than 15 years and at two different firms. During that time I have completed nearly a dozen deals with them. PNC MC works with you to get the deal closed; they are flexible in how they structure their investment and they add value in guiding the company toward its goals after the close.”