O2 Sponsor Finance Provides Senior Secured Credit Facilities to Support Encore Consumer Capital in its Acquisition of Chalet Desserts

Rhea-AI Summary

O2 Sponsor Finance, a division of Old Second National Bank (NASDAQ: OSBC), has announced the provision of senior secured credit facilities to support Encore Consumer Capital in acquiring Chalet Desserts. The announcement, made on July 9, 2024, highlights Chalet Desserts as a specialty manufacturer of frozen bakery desserts based in Sacramento, CA. Chalet’s products are distributed through supermarkets, convenience stores, and foodservice markets. Nick O'Brien, Senior VP at O2 Sponsor Finance, expressed enthusiasm about supporting Chalet's growth, acknowledging its leading category position, manufacturing capabilities, and strong management team.

Positive

• Provision of senior secured credit facilities by O2 Sponsor Finance supports strategic acquisitions.
• Chalet Desserts is recognized as a category leader with extensive manufacturing capabilities.
• Partnership is expected to foster growth for Chalet Desserts.

Negative

• Potential financial strain from providing senior secured credit facilities.

Insights

Financial Analyst

The provision of senior secured credit facilities by O2 Sponsor Finance to support Encore Consumer Capital in its acquisition of Chalet Desserts has several important implications for investors. Firstly, senior secured credit facilities are loans that are backed by collateral and have priority over other debt in the event of a default. This means that O2 Sponsor Finance is providing a relatively low-risk financial backing, indicating confidence in Encore Consumer Capital's acquisition strategy and Chalet Desserts' financial health.

For investors, it's critical to note that acquisitions can lead to synergies that enhance value. In this case, Chalet Desserts is already positioned as a leader in its niche with strong manufacturing capabilities. The acquisition could potentially expand Encore's market reach and distribution channels, creating long-term growth opportunities.

However, it's essential to consider the potential risks. Integrating new companies can be complex and costly. Success depends on how well Encore can leverage Chalet's existing strengths and achieve operational efficiencies. Investors should keep an eye on upcoming financial reports to gauge the initial performance post-acquisition.

Short-term, there might be volatility as the market reacts to the acquisition news. Long-term, if the integration is successful, both companies can benefit from expanded market opportunities and operational efficiencies.

Market Research Analyst

From a market perspective, the acquisition of Chalet Desserts by Encore Consumer Capital could be seen as a strategic move to capitalize on the growing demand for frozen bakery desserts and baked goods. This market segment has shown consistent growth due to consumer trends favoring convenience and indulgence.

This acquisition might allow Encore to tap into Chalet's established relationships with supermarkets, convenience stores and foodservice providers, thereby broadening their market presence and distribution network. This could potentially lead to increased sales and market share.

For retail investors, it is important to understand that these types of acquisitions are usually aimed at achieving economies of scale and market expansion. If Encore can successfully integrate Chalet's operations, they could see enhanced profitability. However, market dynamics such as consumer preferences, competition and economic conditions will play a significant role in determining the actual success of this acquisition.

Monitoring industry trends and how the combined entity responds to these trends will be critical for assessing future growth potential.

CHICAGO, IL / ACCESSWIRE / July 9, 2024 / O2 Sponsor Finance, a division of Old Second National Bank (NASDAQ:OSBC), today announced that it provided senior secured credit facilities to support Encore Consumer Capital ("Encore") in its acquisition of Chalet Desserts ("Chalet").

Based in Sacramento, CA, Chalet is a specialty manufacturer of frozen bakery desserts and baked good inclusions that are sold into the in-store bakery at supermarkets and convenience stores as well as foodservice and ingredient end-markets.

"We are excited to support Encore Consumer Capital's acquisition of Chalet. Chalet is a category leader with extensive manufacturing capabilities and an impressive management team. We look forward to supporting Chalet's growth. " said Nick O'Brien, Senior Vice President, O2 Sponsor Finance.

About Chalet Desserts: Chalet, based in Sacramento, CA, is a specialty manufacturer of frozen bakery desserts and baked good inclusions that are sold into the in-store bakery at supermarkets and convenience stores as well as foodservice and ingredient end-markets. For more information, please visit: www.chaletdesserts.com.

About Encore Consumer Capital: Encore Consumer Capital is a private equity investment firm focused on the consumer products industry. The firm has raised over $900 million in committed capital and invested in over 40 companies in the sector. Encore's current and prior investments include food and beverage manufacturers and marketers, pet products companies, personal care/beauty companies, and food distribution companies. The firm targets companies with between $10 million and $150 million in annual revenues where Encore's strong expertise in strategy development, brand marketing, manufacturing and supply chain optimization, and distribution expansion can drive performance. For more information, please visit: www.encoreconsumer.com.

About O2 Sponsor Finance: O2 Sponsor Finance is a national provider of cash flow-based loans to lower middle market businesses with typically $10 to $100 million in revenue and between $2 million and $10 million in EBITDA. O2 Sponsor Finance focuses on supporting private equity sponsors, independent sponsors and family offices in their acquisition or recapitalization of lower middle market companies. For more information, please visit www.O2sponsorfinance.com.

About Old Second Bancorp, Inc.: Old Second Bancorp, Inc., headquartered in Aurora, Illinois, is the bank holding company for Old Second National Bank, which celebrated 150 years of operation in 2021. Old Second's common stock trades on The NASDAQ Stock Market under the symbol "OSBC". More information about Old Second is available by visiting the "Investor Relations" section of its website www.oldsecond.com.

Old Second National Bank, Member FDIC, was recently named number one among "Best Bank in Illinois 2021." This was the second straight year the bank was selected by customers for the award. Awards are determined based on a survey of over 25,000 U.S. customers who rate banks on overall satisfaction as well as trust, terms and conditions, branch services, digital services and financial advice.

As of March 31, 2024, Old Second has approximately $5.6 billion in assets, $4.6 billion in deposits and $4.0 billion in loans.

Contact:

Bradley S. Adams EVP, Chief Operating Officer and Chief Financial Officer (630) 906-5484

SOURCE: Old Second Bancorp Inc.

View the original press release on accesswire.com

FAQ

What is the significance of Old Second National Bank's (OSBC) involvement in the acquisition of Chalet Desserts?

Old Second National Bank's O2 Sponsor Finance division provided senior secured credit facilities to support Encore Consumer Capital's acquisition of Chalet Desserts, highlighting their role in strategic financial partnerships.

Who acquired Chalet Desserts?

Encore Consumer Capital acquired Chalet Desserts with the support of senior secured credit facilities from O2 Sponsor Finance.

What industry does Chalet Desserts operate in?

Chalet Desserts operates in the specialty manufacturing of frozen bakery desserts and baked good inclusions, catering to supermarkets, convenience stores, and foodservice markets.

How does O2 Sponsor Finance view its support of Chalet Desserts?

O2 Sponsor Finance views its support as an opportunity to foster Chalet Desserts' growth, recognizing the company’s leading market position and robust manufacturing capabilities.

What is the role of Nick O'Brien in this acquisition?

Nick O'Brien, the Senior Vice President at O2 Sponsor Finance, expressed excitement about the partnership and the growth prospects for Chalet Desserts.