Deal Overview
- Customer: Santmyer Companies, Inc.
- Deal Type: Senior Secured Credit Facility
- Facilities: Revolving Line of Credit and Term Loan
Takeaways
- Santmyer Companies, Inc. identified an opportunity to expand their capabilities and refine their strategic focus by acquiring local family-owned business Cole Distributing.
- The company was seeking financing to complete the acquisition. Due to a long-standing relationship with Santmyer and a junior capital partner, Huntington Business Credit (HBC) secured the deal and assisted on deal structuring.
- The transaction had numerous moving parts, which required all parties to be flexible as the deal progressed. The HBC team and junior capital partner stepped up and raised their commitments to cover a potential capital shortfall.
- Thanks to the ability of both HBC and the junior capital partner to pivot quickly, the deal went through and Santmyer was able to successfully acquire the business and pursue new growth opportunities.
Santmyer Companies, Inc. is a leading full-service petroleum marketer serving northeast and central Ohio. Founded in 1952 with a single service station in Wooster, OH, this privately-owned, family operated company has grown into a reputable wholesale distributor of diesel, gasoline, propane, lubricants, diesel exhaust fluid, and logistics services.
In 2022, Santmyer began discussing an acquisition opportunity with Cole Distributing, an Ohio-based propane and fuel distribution company that was looking to sell to another local, family-owned business. Acquiring Cole Distributing would set Santmyer up to expand its customer base, deepen their capabilities, and explore new growth opportunities.
About the deal
As a family-owned business that has supported its local communities for more than 70 years, it’s no surprise Santmyer values personal connections. Santmyer has a long-standing relationship with Huntington and has worked with multiple teams within the bank since 2011 to finance the company’s working capital, real estate, equipment, technology, and commercial land.
When Santmyer went to market to find financing for the potential Cole Distributing acquisition, HBC prevailed over competitors thanks in large part to this more than 12-year relationship and HBC’s strong relationship with a second lien term loan partner.
After securing the deal, Barry Shetzer, HBC Business Development Officer, and Doug Winget, President of Huntington Business Credit, met with Zach Santmyer to offer guidance on structuring the acquisition.
“Being able to meet face-to-face and spend time with the Santmyer family over the years has helped us develop a strong working relationship. We brought Zach multiple options on how to structure the deal and walked through what might work best for their company. After reviewing different alternatives, we consulted with the Santmyer team to choose the structure based on their goals for the acquisition,” says Shetzer.
President and CEO Zach Santmyer, Chairman Terry Santmyer, and General Manager Nate Santmyer
Making connections to keep the deal moving
Due to an ever-changing market, an unforeseen shift in the original deal structure resulted in the need for additional capital to close the acquisition. Quick problem-solving and pivoting needed to happen to ensure the deal could go through as planned.
“There was more than one roadblock in this transaction. We had strong support from our leadership team as well as our credit team, which allowed us to rapidly adjust to the changing aspects of the deal. Our ability to remain flexible and react quickly kept the deal moving forward and finally was able to help it to close,” explains Shetzer.
Together, HBC and the junior capital partner were able to increase their loan commitments to bridge the gap and keep the acquisition moving forward.
Looking toward the future
Thanks to everyone involved with the deal collaborating closely, Santmyer was able to successfully acquire Cole Distributing and consolidate the two entities.
The acquisition strategically aligns Santmyer to continue to grow its propane side of the business and enhance operations through innovation. The streamlined company is positioned to grow the core business in the future.
“There’s an excitement and energy with the teams coming together. Everyone sees the vision. Bringing on Cole will allow us to be more strategic in how we buy and lock in more contracts,” says Nate Santmyer, General Manager at Santmyer.
The credit facility provided by Huntington Business Credit will also support ongoing working capital growth for Santmyer as the company brings the two workforces together and seeks new opportunities to expand the distribution and wholesale segments of the business.
“Our industry is going through a lot of changes right now. We discovered these natural synergies between the companies and were able to create a more strategic focus for our company. Santmyer will be able to grow, cross-sell, and scale our operations going forward,” says Zach Santmyer.
