ABOUT THE COMPANY:

Headquartered in Toronto, Ontario, CIBC Innovation Banking (“CIBC” or “the Lender”) specializes in lending solutions for entrepreneurs and investors in the innovation economy.

SITUATION:

In the first half of 2023, a CIBC portfolio company (“Company”) defaulted on its bank agreement and requested relief. This wasn’t the first time the venture capital-backed payments as a service (PaaS) platform had signaled an SOS. The Company, founded in 2020, had submitted a series of inaccurate budgets and forecasts, leading CIBC to explore an outside cash-flow assessment and explore strategic alternatives.

ENGAGEMENT:

"G2 Capital Advisors (G2) was engaged by CIBC to conduct a one-month diagnostic Phase I Assessment focused on liquidity and cash flow management assessment, business and operational strategy review, refinancing options, and strategic alternatives. Completed in May 2023, the Assessment revealed a $15 million gap in the Company’s FY2023 forecast and delivered three possible solutions: 1. Sell the Company 2. Invest in a long-term commitment to the Company 3. Refinance out of its investment in the Company"

OUTCOME:

CIBC opted to take the third option and began working with the Company to reduce expenses and improve profitability, starting with a reduction in employees (34%) and contractors (4x). In tandem, G2 leveraged its high-quality network to identify aligned [alt: receptive; interested; targeted] lenders and ran a streamlined process that resulted in the creation of a new lending syndicate. G2 raised $65 million through the new syndicate to refinance the existing loan. Through this refinancing, CIBC was able to recap its initial [add: $25 million] investment in full while the Company gained access to $20 million, which it required to continue operating—and without which, it would have been $15 million short.

DEAL TEAM:

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G2 was engaged as Chief Restructuring Officer (“CRO”). Through the CRO, G2 developed and executed liquidity management tactics for the Company and its stakeholders.

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G2 was engaged to facilitate negotiations for more favorable payment terms with key vendors, aiming to optimize cash flow management.

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G2 was engaged to perform a Phase 1 strategic alternatives assessment.

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The Company engaged G2 as its Chief Restructuring Officer. Through the CRO, G2 developed and executed liquidity management tactics for the Company and its stakeholders.

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G2 conducted a rapid Phase 1 Assessment and developed a report that included an assessment of the business, operations, and financial condition of the Company, short-term liquidity, near-term capital requirements, and strategic alternatives.

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The Company engaged G2 to assist in building the long-term financial model, a 13-week cash flow forecast, facilitate negotiations between the Company, the sponsor, and the lender group.

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G2 was engaged to complete a Phase 1 assessment of the Company’s financial forecasts and its ability to return to pre-COVID levels of financial performance.

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G2 conducted a Phase I Assessment focused on liquidity and cash flow management assessment, business and operational strategy review, refinancing options, and strategic alternatives.

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G2 worked alongside creditors and management to develop a Phase 1 Assessment. G2 advised the lenders with respect to the financial position of the Company.

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