Stone & Aggregate Company

Ontario, Canada

Clubhouse Capital secured a $13.5 million finance package to fund a facility manager’s purchase of a company that operates four quarries: three sand and gravel quarries, and a dimensional stone quarry. Two of the quarries are owned; the other two are controlled via long-term licensing arrangements. The manager invested only $500k in personal cash to consummate the buy-out. The underwriting was driven by the massive level of present and projected infrastructure spending in the province of Ontario. The manager, who also has business interests in Boston, had acquired the initial two quarries with the support of a Toronto equity fund, and grew the company through thinly-capitalized royalty deals. The fund elected not to follow his growth initiatives, prompting the buyout opportunity. The primary finance package — a $9.75 million term loan and a $2.5 million revolving line of credit — was funded by the private division of a Canadian bank. Clubhouse also secured $1.25 million in mezzanine financing through a Toronto money management firm, reducing the buyer’s equity burden. (Spring 2015)