2nd Generation Capital, LLC helps truckers save over 350 jobs in Clarksville, Indiana.
June 2007
A recapitalization involved $ 3mm in new equity and $12mm in new credit facilities. Summitt Trucking, an entrepreneurial nationwide dry-van hauler with 400 power units, had grown very fast during its first 4 years of operations.
Summitt had financed its growth with a broad group of lenders, including equipment vendors, fuel vendors, and even a hedge fund. The structure of the many credit arrangements made it difficult for Summitt to manage its cash flows during the cyclical swings that are so common in the transportation segment. Summitt clearly needed to re-structure its balance sheet, but time-based pressure from the multitude of lenders made it difficult to find a path to survival.
Second Generation assisted the management of the company in developing a combination of internal operations changes, staff changes, and debt-restructuring which showed the way to recovery. 2ndG negotiated with the equipment lenders for time to carry out the transition, and for terms that could be managed out the company's projected cash flows. A local investor (Ballew Enterprises) was identified by the company, and 2ndG assisted in the development of a plan that incorporated the injection of new equity with a complete re-financing of the company's working capital credit facilities, funded by Textron Financial's Oregon-based transportation unit.
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