Houlihan Lokey Advises Merchants Automotive Group

Houlihan Lokey is pleased to announce the successful placement of $50 million of Series A senior secured notes for Merchants Automotive Group (Merchants) with Bain Capital Credit. Proceeds from the transaction were used to fund the company’s accelerated growth, as well as to pay transaction-related fees and expenses. The transaction closed on March 13, 2020.

Merchants, a privately owned family business, is one of the largest and fastest-growing fleet management companies in the United States. The company provides a comprehensive selection of fleet management and leasing solutions to a wide spectrum of industries. Merchants also sells, services, and finances pre-owned cars, operating as one of the largest pre-owned dealers in New England. The company was founded in 1962 and is headquartered in Hooksett, New Hampshire.   
        
Due to several recent and large contract wins that required significant upfront investment, Merchants decided to explore various capital alternatives to fund its growth and engaged Houlihan Lokey as its exclusive financial advisor and placement agent. Houlihan Lokey assisted the company in arranging, structuring, and negotiating the financing, including navigating multiparty, inter-creditor negotiations and documentation.  

The financing achieved Merchants’ primary objectives, including (i) providing a runway to support the company’s accelerated growth over the next several years, (ii) limiting any governance restrictions on operations, (iii) minimizing equity dilution among the ownership group, and (iv) providing payment flexibility to maximize reinvestment in the business. In spite of the significant market volatility during the final stages of the transaction, the company was not required to make any changes to the pricing or terms of the financing, highlighting the strength of the partnership between all stakeholders.