Case Studies
US Baby Food Manufacturer
Consumer Packaged Goods

SITUATION
- Initiative Foods (the “Company”) was founded in 2002, is the largest US producer of private label baby food, the third largest US producer of baby food, and the only private manufacturer capable of producing both organic and natural baby foods
- During 2020 to 2021, the Company was plagued with intermittent lockdowns related to Covid-19, which caused significant decreases in private label baby food sales at retailers, along with extended periods of labor shortages
- In 2022, the Company began to rebound from the effects of Covid-19, but was deeply impacted by increased costs due to inflationary pressures (without associated price increases), which caused negative EBITDA and negative working capital
- In February 2023, Chiron was hired as a Financial Advisor and exclusive Investment Banker. The Company was in default with their bank senior-secured lender, had significant past-due accounts payable, and needed funds for growth initiatives
OUTCOME
- Chiron as financial advisor successfully negotiated with the incumbent senior-secured bank lender to obtain forbearance (which allowed the Company deferral of any principal or interest payments for nine months), and assisted with a reduction of lease payments to a third-party landlord, immediately increasing liquidity for working capital during the recapitalization efforts
- Chiron assisted the Company with reporting parameters, building cash flow models and three-statement income projections, balance sheet, and cash flow statements, as well as the build-out and implementation of the strategic growth Capex plan
- Chiron marketed the opportunity to 400+ potential capital providers (including ABL, M&E, project finance, mezzanine, and equity providers) to recapitalize the Company, refinance the incumbent bank lender, and ensure the Company had the proper liquidity and capitalization to implement its strategic growth Capex plan
- Chiron successfully placed a multi-tranche debt and equity facility, which exited the incumbent senior-secured lender at a ~66.4% discount and provided $6.9 MM in liquidity ($3.1 MM in working capital and $3.8 MM for growth Capex needs)
The Challenge
During 2020 to 2021, the Company was plagued with intermittent lockdowns related to Covid-19, which caused significant decreases in private label baby food sales at retailers, along with extended periods of labor shortages.
The Chiron Solution
In February 2023, Chiron was hired as a Financial Advisor and exclusive Investment Banker. The Company was in default with their bank senior-secured lender, had significant past-due accounts payable, and needed funds for growth initiatives
The Result
Chiron successfully placed a multi-tranche debt and equity facility, which exited the incumbent senior-secured lender at a ~66.4% discount and provided $6.9 MM in liquidity ($3.1 MM in working capital and $3.8 MM for growth Capex needs)