has completed a Senior Term Loan and Revolving Credit Facility Financing with



Mellow Mushroom is a restaurant
operator and franchisor.

The undersigned acted as financial advisor to Mellow Mushroom in this Transaction

Mellow Mushroom

Description

Home-Grown Industries of Georgia franchises and operates restaurants under the trade name “Mellow Mushroom.” The restaurants specialize in freshly prepared pizzas, hoagie sandwiches, salads, appetizers, and related items. HGI’s Red Bud division prepares and distributes proprietary pizza dough and special sauce concentrate to the franchisees.

Situation

HGI engaged Croft & Bender to help the Company in its efforts to buyout a 35% shareholder in the Company, refinance all existing debt, and provide additional liquidity to execute on a new growth strategy. Croft & Bender initially exceeded the Company’s goals with respect to a structured recapitalization including senior debt, subordinated debt, and a minority equity investment. Due to the Company’s exceptional performance during the process, management decided to wait to execute on a transaction when senior cash flow debt would be adequate to finance the transaction more cost effectively.

Result

Three months following the Company's decision to pass on the highly structured transaction, Croft & Bender was able to negotiate a senior cash flow deal that exceeded expectations and general market terms. Management agreed to pursue the revised deal, and it closed in September 2009. GE Capital provided a term loan facility as well as a revolving credit facility for future growth initiatives.