The Client

J.T. Shannon Lumber Company

Lumber and flooring manufacturer in Indiana and Mississippi.

Challenge

The Company had invested heavily in adding capacity to its concentration yards (MS and IN) and saw mill (IN) and suffered a down year during construction, leaving Shannon needing new financing and additional working capital in order to capitalize on its expanded capacity.

The Process

Equity Partners sought buyers and lenders and received confidentiality agreements from more than 50 interested buyers and more than a dozen lenders and, with management, identified 25 groups to focus on. Equity Partners provided these prospects more detailed information and the opportunity to visit the facilities.

The Solution

From this smaller subset of targets, Equity Partners quickly generated 3 purchase offers and 3 refinancing term sheets. With an attractive offer on the profitable Indiana division, management decided to sell that saw mill and concentration yard to a large strategic buyer for more than $20 million, retire debt, keep the other two divisions, and simultaneously establish a $10 million line of credit with a Memphis area bank. The concentration yard and flooring business now move forward with a greatly improved balance sheet and ample liquidity for growth.