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Can I Find A Subordinated Debt Partner That Will Also Provide Equity to Support a Consolidation Strategy?
Resource Label Group, Franklin, Tennessee, provides full-service label design and printing for a wide range of industries and brands throughout the United States and Canada. The company focuses on delivering to their customers the best return on their packaging investment. PNC Mezzanine Capital (PNC MC) supported the initial acquisition of Resource Label Group by First Atlantic Capital, as well as the ongoing consolidation strategy post-close.
The Plan
After working together over several years to find the right opportunity, Resource Label Group marked the first of several transactions for PNC Mezzanine Capital to partner with First Atlantic Capital. PNC MC was the ideal financing source for First Atlantic Capital and Resource Label Group, PNC MC supported the initial transaction with a $10 million investment comprised of subordinated debt and a meaningful equity co-investment, and then provided additional follow-on capital to accomplish the consolidation and geographic expansion strategy.
The Strategy
First Atlantic Capital identified the label segment as an attractive end market with strong growth drivers and was confident that Resource Label Group would be a solid platform upon which to execute a consolidation strategy. As an active member of the board, PNC MC has worked with First Atlantic Capital and Resource Label Group’s management to identify and execute on areas for growth and to work to upgrade the infrastructure and management team of the Company.
The Result
Resource Label Group has completed six add-on acquisitions while PNC MC has been involved, with PNC MC providing $2 million of additional capital to support the growth. The company has more than tripled in size, and expanded to cover a large majority of the US and Canada. The company is actively seeking more opportunities to expand in the Pacific Northwest, the West Coast, the Midwest, and the Southwest.
“It is clear that PNC Mezzanine has a long history of investing in companies like Resource Label Group that are growing organically as well as through acquisition. Their experience and strategic guidance are valuable assets to the company” he notes.
-Bob Simko
CEO of Resource Label Group