Several years ago, Source Capital, Ltd. helped the owners of Energy Alloys, LLC with the buyout of a non-supportive capital partner, and the recapitalization of the business to reposition it for growth. During the interim period, the Company’s revenue from internal or organic growth increased by roughly 230%. In the interim, as part of growth strategy planning, Source tracked the capitalization of competitors and consolidation activities in its industry segment. Source also monitored whether and how the Company qualified for growth or acquisition capital. Source refers to these services as Capital Market Qualification (CMQ) Scoring, Competitor Capitalization Research (CCR) Reports and Industry Consolidation Risk (ICR) Scoring. These are 3 of the 10 growth advisory tools that Source can provide clients.

By using CMQ, CCR and ICR to monitor Energy Alloys industry segment, Source was able to identify a French public company, which was being taken-private in a private equity sponsored leveraged buyout transaction. This company owned a division in the United Kingdom, which Source believed would be viewed as being non-core by its new private equity investors. Source believed the Company had an opportunity to move quickly and contacted the new CEO of the French Company to determine whether he would like to sell the division, which would give him funds to pay-down debt from his recent acquisition and enable him to focus on his core Euro-Zone strategy. Source also believed that Energy Alloys would be able to attract favorably priced capital to make this acquisition.

Source’s input was accurate on both matters. Energy Alloys was able to acquire the division assets in a privately negotiated transaction without exposing the business to bids, or an auction process, and arranged 100% non-dilutive financing for the acquisition. As a result of this transaction, the Company has now become the leading provider of supply chain and value-added logistics services to the original equipment manufacturers (OEM) serving the global oil and gas production industry.

Since 1982, Source has provided growth strategy, acquisition advisory and corporate finance services to its clients. The proprietary performance monitoring and growth advisory tools developed by Source provide its clients with strategic competitive advantage. For more information on CMQ, CCR and ICR, or on Source’s other growth advisory tools, please visit our website or give us a call.