Video: Minority Recapitalization – Dion’s Pizza

10.01.18
 

Dion’s Pizza’s CEO Mark Herman and Prudential Capital’s Jason Richardson describe the partnership between the two companies.

 

 

Dion’s Pizza is a fast-casual restaurant chain specializing in pizza, subs and salads. Founded in 1978 in Albuquerque, New Mexico, the company operates 23 restaurants across the American Southwest, primarily in New Mexico, with a few in Colorado and Texas.

In late March 2014, having already stepped away from day-to-day oversight of the company, Dion’s founders approached Prudential Capital Group about the possibility of recapitalizing their company. The two men were hoping to diversify their net worth and simultaneously give the members of their management team a chance to increase their ownership in the business.

While Dion's had a number of options for funding its recapitalization, the owners were focused on partnering with a group who had a long-term perspective. As a result, Dion's looked to companies that could provide significant liquidity, while enabling the existing management team to have the opportunity to increase its ownership position over time. Acting on the advice of its investment banking firm, Fidus Partners, Dion’s reached out to Prudential Capital, which had the capacity to provide a complete mezzanine financing package tailored to Dion’s specific needs. Prudential Capital quickly assembled a deal that included senior debt, a revolving credit facility, a term loan, subordinated debt and preferred stock.

Searching for a way to meet two important financial goals in a single transaction, Dion’s Pizza chose Prudential Capital for its long-term, relationship-focused approach to doing business and for its willingness to assume a minority equity stake in the company as part of a complete, single-source financing package.

 

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