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Client:
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The New Release (“TNR”) is the nation's largest owner / operator of DVD rental kiosks strategically located in grocery stores. TNR was founded in late 2003 and had 678 deployed kiosks as of July 2006.
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www.thenewrelease.com
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Transaction Summary:
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Brookwood Associates advised TNR, including its institutional investors Laminar Direct Capital (a unit of D.E. Shaw) and Celerity Partners, on a $45 million debt and equity growth financing to support its business plan over the next 18 months.
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"Brookwood did an extraordinary job of communicating the reality of our business and its value to investors. They initiated, managed, and closed the transaction quickly and professionally. As in our last round, Brookwood met or exceeded all our goals and expectations."
– Richard Cohen, CEO
The New Release
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Transaction Highlights:
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Need for Capital – Brookwood successfully advised TNR in the Fall 2006 with a $10 million growth equity placement to support growth into mid-2006. Based upon TNR’s prior strong performance, one of the largest grocery chains awarded TNR a national contract to be fully deployed by year-end. In order to meet its contractual agreements, TNR again retained Brookwood to run a very thorough yet extremely fast-paced process to secure the necessary $25 million growth capital.
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Thorough, Effective Process – Brookwood quickly revamped the prior equity-oriented information memorandum to a debt-oriented document emphasizing: (i) the compelling unit economics, track record and underlying cash flows; (ii) TNR’s leading market position, senior management and infrastructure; and (iii) the sustainability of the DVD rental industry. Brookwood tapped its expansive network to effectively market the opportunity to an investor base ranging from hedge funds and one-stop lenders to senior debt, mezzanine debt and minority equity providers.
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Excellent Results – The process generated numerous interested investors. Ultimately, TNR’s positioning allowed it to secure an even larger $35 million all-debt structure proposal, with an additional $10 million equity investment at an attractive pre-money valuation. The market interest allowed TNR to choose between capital structures and understand its fall-back positions if needed.
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