Capital Sourcing

About Injection Molding Company

Injection Molding Company had developed and patented various designs and molds that allowed the Company to manufacture a self-locking child proof pail in a variety of sizes – solving a vexing problem for manufactures of products such as pool chemicals. The Company had invested heavily in the development of molds as well as in the manufacturing facility, injection mold machines, and a significant work force.

The cost of developing new molds was straining the finances of the Company and just when the Company was ready to ramp up manufacturing on the new design, The Company’s bank informed the owners that their loan would not be renewed. Furthermore, the Company’s line of credit would begin to be reduced as collection of receivables was made.

Client Objectives

The Company’s owners were confident in their plans and desired to seek refinancing while giving up as little equity as possible.

Disciplined Process

DCF immediately began preparing a comprehensive confidential information memorandum that described the plant, machinery, production lines, processes, intellectual properties, work force, customers, suppliers, current financial position, and forecasted operations including the monthly balance sheets, income statements and statements of cash flows. We then identified the universe of potential subordinated debt lenders and commercial lenders and banks. With the use of the confidential information memorandum and concurrently communicating with the potential lenders and investors, DCF created a competitive environment in which potential lenders and investors put their best foot forward.

Proven Results

The process yielded a $4 million subordinated investment that allowed the company to complete its investments in new molds and to provide the capital. DCF, understanding the valuation process, was able to keep the warrant required by the subordinated to a minimum (a warrant being in effect ownership of the company in addition to the current interest rate paid). Those institutions provided the Company lending facilities in excess of $8 million that have allowed the Company to since triple its sales, double its manufacturing capacity and appropriately enlarge its work force.

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Decosimo Corporate Finance, LLC

819 Broad St. Chattanooga, TN 37402

(423) 266-4000

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