Allied Defense Group needed to re-think its strategy and increase its capital base to support future growth. With its operations primarily in Europe, and a growth strategy focused on North American acquisitions, the Company’s new management team had a clear vision but a complicated financing requirement. Source recommended a multi-stage approach to refinancing and recapitalizing Allied Defense Group.

The first step was to consolidate the Company’s European subsidiary debt into an obligation of its principal foreign operating subsidiary, while also expanding the total committed capital to support the future growth of that business. This required complex negotiations with the Company’s foreign bank pool, replacing or adding pool members and negotiating reasonable covenants that would enable the Company to use future earnings for its North American growth plans. This announcement memorializes the successful completion of the first round of financing.

Since 1982, Source Capital, Ltd. has offered an integrated approach to evaluating alternatives and implementing solutions concerning the future growth strategy and company capitalization options for medium-sized manufacturing companies. We have experience in working in both the North American and European capital markets.