Since 2002, we have been working with Energy Alloys, LLC. During the past four years, the Company has been re-positioned, through the implementation of a complex growth strategy, into the leading competitor in its industry segment. Revenue has grown from $33.6 million to nearly $300 million; and EBITDA has increased from $3 million to roughly $42 million. This growth has been accomplished by completing several strategic acquisitions, which have broadened the Company’s customers and capabilities; expanding its geographic presence into international markets; by adding depth to the Company’s management team; completing capital equipment and information technology upgrades; and by concurrently increasing the Company’s capitalization to fund internal growth, acquisitions and certain corporate development initiatives.

As often occurs with growing companies, the “equity value” of the business rapidly outpaces the balance sheet “book value”, which often makes funding growth with debt capital a challenge, as a growing company will typically not have adequate “tangible net worth”. Credit challenges become even greater when a significant portion of a company’s fixed and working capital assets are located in geographic regions outside of the United States. In the case of Energy Alloys, LLC, growing and re-positioning the Company meant locations in Canada, the United Kingdom, the Middle East and China. Therefore, the challenges were significant in obtaining debt capital to fund growth.

Often, lenders will suggest that a company obtain additional equity capital. However, many private equity firms want to make “control investments” only and, as they are often shooting for annual compound investment returns in the range of 25% or higher, private equity capital is much more expensive than is debt capital. Plus, most private equity firms attempt to “under value” a company when they invest.

To successfully complete this engagement, it was necessary to arrange a global debt syndicate transaction, allowing risk to be carved-up among lenders, while also enabling the Company to fund its growth capital needs without having to prematurely take-on private equity.

Since 1982, Source Capital, Ltd. has represented clients on matters relating to growth strategy and related corporate finance needs. We have considerable debt capital markets expertise to help clients obtain growth capital on reasonable cost and terms, and without premature dilution.