Case Studies

Callidus Provides US $10,000,000 Growth Deal for Consumer Lending Company, Manor Resources LLC

Callidus provided Manor Resources LLC ("Manor") with an operating line of credit of US $10,000,000. The proceeds are being used to assist the business in expanding its existing portfolio of car title loans.

Manor, a successful consumer lending company, had recently changed its delivery method for providing its loan financing from a storefront "brick and mortar" format to an online loan application and approval delivery system. This transition has enabled Manor to scale up its geographic market coverage without incurring significant additional overhead costs. The company has been successful in attracting private capital to fund its growth to date but found, after its transition to on-line lending, that traditional lenders were unwilling to lend the funds to allow it to take advantage of its newly expanded market presence.

Manor required both liquidity and flexibility from its primary capital provider to allow management to continue to meet its ongoing customer demand. To accomplish this, Callidus provided financing against Manor's existing loan portfolio providing it with the necessary liquidity it could not otherwise obtain. The financing was structured as a revolving line of credit with no financial covenant tests allowing the company to draw up and pay back the capital based solely on its borrowing base capacity and with no additional limitations. Additionally, Callidus structured the transaction to allow existing subordinated note financing to be paid their interest provided the company is able to perform.

US Acquisition US $72,500,000 Financing Deal for an Oil and Gas Services Company

Callidus provided the purchasers of a U.S. based oil and gas services company ("Serviceco") with an operating line of credit of US $12,500,000 (secured by working capital assets) and a term loan of US $60,000,000 (secured by machinery and equipment). The proceeds were used by our client to assist with purchase of the shares of Serviceco, and fund ongoing working capital so the business could realize Serviceco's turnaround.

Serviceco had a successful history of operating and financial performance. However, a decision by the prior owners to reposition its service fleet caused a decline in performance as utilization dropped during the transition period. This decline in performance meant the existing senior bank lender was not prepared to support the new owners looking to acquire the business.

The company had already proceeded with another lender for financing the acquisition; however, this lender could not close the transaction. The buyers of Serviceco approached Callidus to determine if we could step in and provide the acquisition financing.

The Serviceco buyers required a lender which was comfortable with leveraging the assets of the company, and had the insight to understand what caused the downturn in the performance of the company, and see the turnaround. Callidus stepped in and closed the financing in seven weeks. As the company wanted a committed financing facility for two years, Callidus was able to structure financial covenants that fit with the company's forecast. Callidus was able to offer a principal repayment holiday on the term loan to take the pressure off the company's cash flow allowing the new owners to focus on the operations of the business following their purchase. Principal repayments on the term loan were tied to the depreciable life of the equipment, affording additional relief to Serviceco's annual debt repayment obligations. Serviceco's CFO affirms, "Callidus was able to structure a financing program catered to our needs - something that no other lender could do. The responsiveness with which Callidus put together the financing program meant that we didn't skip a beat in our acquisition plans."

Callidus Capital combines a Line of Credit and Term Loan of $17,000,000 to enable Leader Energy Services Ltd. to meet ongoing customer demand

Based in Western Canada, Leader Energy Services Ltd. partners with the energy sector's best-known companies to help unlock oil and natural gas reservoirs. Callidus Capital provided Leader Energy with an operating Line of Credit of $4,000,000 and a Term Loan of $12,000,000. The proceeds were used to refinance the incumbent lender and provide the Company with increased liquidity and certainty of capital.

Due to unusual weather conditions in the spring of 2012 that caused their customers to delay their drilling activities, Leader Energy experienced a corresponding delay in business activity. As opposed to trying to operate the business surrounded by a lack of certainty relative to capital access, Management elected to take a proactive stance and approached Callidus Capital to help them generate the liquidity and flexibility required to meet impending sales demand.

To accomplish this, Callidus provided an integrated, stable solution that margins both the company's working capital and fixed assets to a higher level than conventional lenders. Callidus was able to complete its due diligence and close the financing within five weeks, providing Leader Energy with sufficient capital to meet oncoming seasonal demand. Rod Hauser explains, "The Callidus team was quick to come to the table and structure a financing package that supported our Management Plan. They understood the opportunities for growth and worked with us to build a stronger future for our company."

Callidus Capital provides Netricom Inc. with a $28,000,000 Senior Credit Facility for the acquisition of Prestige Telecom

Callidus provided a $28,000,000 Senior Asset-Based Credit Facility for Netricom Inc.'s acquisition of Prestige Telecom of Montreal. The Callidus loan played a crucial role in Netricom's timely acquisition of Prestige, which was under CCAA protection. Prestige is a provider of engineering, materials, construction, installation and support services for wireline, cable television and wireless telecommunications infrastructure throughout Canada and employs in excess of 1,100 people.

"Callidus stepped up and participated with us in our due diligence of Prestige under an extremely tight deadline," relates Francois Gaudreau, CEO of Netricom. He further says "There aren't many lenders in Canada with the ability to act as quickly and see beyond the numbers as the management team of Callidus was able to do." David Reese, COO of Callidus states, "The Netricom management team has all the right attributes to put Prestige on the path to success; they just needed a supportive capital provider to partner with them."

Callidus Capital provides C&C Resources with $35,000,000 in Credit Facilities to facilitate growth

Callidus provided $35,000,000 Senior Credit Facilities for British Columbia headquartered C&C Resources. C&C, a long-time provider of dimensional lumber and other wood products, was experiencing increasing demand for its products and could not garner the support from traditional credit providers to meet its growing order book. Callidus assessed the business and provided both operating and term facilities to support C&C with its current and future order book.

David Reese, COO of Callidus, commented, "C&C is a perfect example of a company in an industry sector that is currently out of favor with the traditional banks. The company has a solid management team and order book, and needed a lender to understand management's plan to capitalize on the opportunities at hand. We were very pleased to assist C&C with their growth plans." Kris Hayman, CEO of C&C adds, "The Callidus team was quick to assess and understand our business and go-forward plan. They marshaled the resources to get the deal done on an expedited basis."

Recent Transactions
Lumber Manufacturer

$89,000,000 Senior Revolving & Term Credit Facility

Quality One Wireless

$75,000,000 Senior Revolving Credit Facility

Aviation Services Company

$75,000,000 Senior Term Credit Facility

Oil & Gas Services Company

$72,500,000 Senior Revolving & Term Credit Facility

Arthon Industries

$60,000,000 Senior Revolving & Term Credit Facility

Casino Game Developer & Manufacturer

$55,000,000 Senior Revolving & Term Credit Facility

Auto Parts Manufacturer

$47,000,000 Senior Revolving & Term Credit Facility

Subprime Consumer Lender

$30,000,000 Senior Revolving Credit Facility

Lumber Manufacturer

$30,000,000 Senior Revolving & Term Credit Facility

Terrace Bay Pulp Inc.

$30,000,000 Senior Revolving Credit Facility

Aquaculture Company

$28,000,000 Senior Revolving & Term Credit Facility

Netricom Inc.

$28,000,000 Senior Revolving Credit Facility

Specialty Drilling Company

$27,000,000 Senior Revolving & Term Credit Facility

Specialty HVAC Company

$26,000,000 Senior Revolving & Term Credit Facility

Sporting Goods Manufacturer

$25,000,000 Senior Revolving Credit Facility

XChange Technology Group

$25,000,000 Senior Revolving & Term Credit Facility

Discovery Air

$25,000,000 Senior Revolving Credit Facility

Leader Energy

$17,000,000 Senior Revolving Credit Facility

Animation Production Company

$17,000,000 Senior Revolving & Term Credit Facility

Diamond Finishing Company

$15,000,000 Senior Revolving & Term Credit Facility

Steels Inc. – DIP

$12,000,000 Senior Revolving & Term Credit Facility

Cardboard Carton Packaging Company

$11,000,000 Senior Revolving & Term Credit Facility

Mining Company

$11,000,000 Senior Term Credit Facility

Transportation & Logistics Company

$8,300,000 Senior Revolving & Term Credit Facility

Automotive Supplier

$7,300,000 Senior Revolving & Term Credit Facility

Specialty Lumber Company

$5,000,000 Senior Revolving & Term Credit Facility