Equipment Financing Unlocks Asset Value for Ownership Transition
Total Logistics Inc., a leading transportation and logistics provider, came to J.P. Morgan in search of financing solutions to convert ownership of the company to an ESOP.
Founded in 1995 in Minneapolis, Total Logistics Inc. (TLI) offers dedicated fleets for tractor and trailer leasing, third-party logistics services, freight brokerage and warehousing services. TLI has several subsidiaries and nine locations across eight US states. TLI sought to convert ownership of the company to an employee stock ownership plan (ESOP).
What Was the Challenge?
Total Logistics had the following goals:
- Make the company 100 percent employee-owned
- Establish a relationship with a lender that understood its challenges
- Execute a financing package that refinanced existing equipment and revolver debt
What Was our Solution?
A competitive financing structure maximized availability and freed cash flow to finance the ESOP
New revolving credit facility
Five-year equipment loan
- Proceeds were used to consolidate several outstanding loans and refinance TLI’s rolling stock of about 1,000 tractors and trailers
- Equipment term loan was done on a floating-rate basis, giving TLI flexibility to avoid prepayment penalties
- Our team maximized tenor and minimized amortization on the rolling stock refinancing, which created sufficient covenant flexibility
Re-leveraged all of the fair market value of the company’s rolling stock
Advantages of Equipment Finance
Our equipment financing team serves thousands of clients, including corporations, government entities and not-for-profit organizations. Benefits include:
- Flexible, cost-effective financing structures
- End-to-end solutions based on your organization’s strategic business initiatives
- Commitment to help you with a consultative approach
Tractors and trailers used as collateral in the refinance
Equipment finance term loan
Total senior bank financing