Lender Diligence

Performed expert field exam and improved reporting process.

Acquisition target with complex receivables process and operational inefficiencies.

Read the Details
  • Industry | Beverage Manufacturer & Distributor
  • Proposed Loan Size | $400MM
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Situation

  • Target added to buyers existing line RLOC: buyer is a Canadian publicly-traded company.
  • Complexities involving A/R invoice and credit memo testing: developed chargeback reserve.
  • Estimated borrower was underreporting inventory by 10% due to manual reporting
  • Inventory located at 100+ locations for operational efficiencies.
  • Material inbound and outbound in-transit inventory, including overseas from vendors.

Solution

  • Consulted target through field exam process and expected reporting as it was never subject to periodic BBC.
  • Reviewed bill and hold agreements with customers such as McDonald’s.
  • Nearly 80% of reported inventory balance tracked or updated manually; helped develop the reporting process.