Brown Gibbons Lang & Company (“BGL”) today announced the completion of the refinancing and recapitalization of its client, Corrpro Companies, Inc. (“Corrpro” or the “Company”). Corrpro is a leading provider of corrosion control engineering services, systems coatings and equipment to the infrastructure, environmental, defense and energy markets around the world. The recapitalization included a new $13 million preferred stock investment by an entity controlled by Wingate Partners III, L.P. (“Wingate”). Wingate, headquartered in Dallas, Texas, is a private equity group focused on making equity investments in businesses going through significant transition. The refinancing also included a new $40 million senior credit facility provided by CapitalSource Finance LLC (“Capital Source”) and a new $14 million subordinated debt facility provided by American Capital Strategies Ltd. (“ACAS”).
BGL was hired by Corrpro in November 2002 to review and pursue strategic alternatives to refinance its debt and assist the Company in negotiations with its lenders. Corrpro chose to hire BGL due to BGL’s skills, contacts, and versatility and tenacity to effectively manage a dynamic transaction process.
Once engaged by Corrpro, BGL first performed a thorough financial analysis of all of the Company’s domestic and international businesses. BGL then assisted the Company in selling two of its domestic subsidiaries, Bass Trigon Software and Rohrback Cosasco, for cash. Through its extensive international network of buyer contacts, BGL was able to quickly canvass the market and deliver quality buyers for these two businesses on a timely basis. Net proceeds were used to pay down a portion of Corrpro’s debt. BGL then conducted parallel marketing processes during 2003, assisting the Company to complete either a comprehensive recapitalization of its balance sheet or a sale of the Company. During this time period, BGL also assisted Corrpro in negotiating further extensions of its loan repayments to give the Company sufficient time to complete its sale or recapitalization. Andrew Petryk, Managing Director and Principal of BGL, commented that “The transaction required us to utilize our expertise in both M&A and private placements to complete the restructuring.”
BGL presented Corrpro to a targeted group of potential strategic and financial investors throughout North America, as well as senior lenders and subordinated lenders, which resulted in substantial interest in Corrpro from the investor community. Following the initial marketing phase, Corrpro decided to continue due diligence with several parties that had submitted attractive offers, ultimately resulting in a comprehensive recapitalization with Wingate. Petryk further stated that: “Wingate’s knowledge of the industries served by Corrpro, as well as its experience with similar transactions and reputation as a premier private equity firm, made them a top candidate for the transaction.”
BGL was able to leverage its knowledge of the senior debt, subordinated debt and private equity markets and its substantial experience with financially distressed companies to develop and deliver a feasible new capital structure to outside capital providers. BGL also advised the Special Committee of the Board of Directors of Corrpro and provided the Special Committee a fairness opinion on the proposed recapitalization transaction. The Company’s shareholders approved the recapitalization on March 16, 2004. As a result of this successful transaction, Corrpro has been able to remain a viable public company, repay its lenders in full, obtain strong private equity backers and new committed lenders, and maintain a meaningful ownership stake for its existing shareholders.