SECAUCUS, N.J. — Empire CLS Worldwide Chauffeured Services, the largest chauffeured transportation company in the world, has paid back $10 million in senior secured debt to Praesidian Capital, a provider of such debt to small and mid-size companies, the firm announced this week.
In July 2009, New York-based Praesidian invested $10 million of senior secured debt to support EmpireCLS’s expansion into further geographic markets both domestically and internationally.
“With strong vision, superior service and a stellar management team, EmpireCLS has revolutionized the premium chauffeured services industry,” said Jon Mansfield, partner at Praesidian, in a press release statement. “We are pleased that we were able to support the company’s continued growth and expansion in attractive markets.”
Empire CLS Chairman, CEO and majority owner David Seelinger stated in the release: “Praesidian has been a valuable financial partner over the past few years. We appreciate their support at a critical time as we’ve strengthened the company’s position as the global leader in limousine service.”
Seelinger described the recent development to LCT as “paying off a mezzanine lender.” Empire CLS was able to pay out the five-year investment about three years early because of stronger business revenue, he said.
Mezzanine capital is a form of financing that is part debt and part equity. It incorporates equity-based options, such as warrants, with a lower-priority debt to provide flexible long term capital for use in buy-outs or growth financings. Frequently unsecured, it usually bears interest at a higher rate than secured loans and often gives the lender a stake in the equity of the company. Mezzanine debt is often used to finance acquisitions, buyouts, and accelerated growth. Its repayment profile is often back-ended over a five- to seven-year period.
EmpireCLS was ranked No. 1 on the LCT 100 Largest Fleets List last year with a total of 723 chauffeured vehicles. It has about 800 employees and generates about $165 million in annual revenues. EmpireCLS operates in more than 700 cities worldwide.
Praesidian Capital partners with small and mid-sized businesses by providing private debt capital. With a focus on its core competency in mezzanine financing, Praesidian invests in established, historically profitable companies often in connection with a management/leveraged buyout, recapitalization or refinancing. Based in New York City, Praesidian manages more than $700 million in committed capital.
For more information, visit www.praesidian.com.
Sources: Business Wire; Martin Romjue, LCT editor
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