Alfred music
Alfred Music is successfully recapitalized by Crystal Financial and NewStar Financial
Alfred Music's investment banking team, including Robert T. Smith, Roman Lefranc and Tong Liu, successfully completed a financing for Alfred Music, Inc. the world’s largest publisher of educational music. The Company was founded in 1922 and has been owned by the Manus family since 1928. Alfred produces educational, reference music, pop, and performance materials for teachers, students, professionals, and hobbyist musicians across all types of instruments, music styles, and difficulty levels. The Company publishes over 184,000 print and digital products sold at over 10,000 retailers worldwide.
Prior to engaging investment bankers, the Company had senior and mezzanine debt and a note held by a previous shareholder that needed to be settled. Senior lenders wanted management to sell the company or replace the debt; but Ron Manus, Alfred Music’s CEO and third generation leader, wanted to preserve the legacy and the jobs of all the people who work there and love music. The investment bankers were retained to find new lenders at reasonable terms that would also allow Ron to maintain leadership. The challenge was to accomplish this and satisfy the interests of four current lenders, a note holder and two new lenders.
After months of presentations and negotiations, and with help from Alfred’s CFO Steven Raft, the investment bankers were able to arrange and negotiate a $20 million senior secured term loan with Crystal Financial and a $10 million revolving credit facility with NewStar Business Credit. “What is uniquely great about our bankers was their ability to listen and apply their skills and strengths to our business and to what we’re trying to achieve.” said Ron.
The end result was that the three senior lenders were repaid in full, the mezzanine lender’s debt was restructured, and there is new working capital. Most importantly the family legacy will continue. Ron maintained 100% of his equity interest, and leadership of the company without having to personally guarantee the loans.