Harvest $11m BDC deal ripens

The business development company has invested $10.8m across two tranches of debt funding in avocado processor Yucatan Foods.

US-based business development company (BDC) Harvest Capital Credit has completed an $11 million financing of Los Angeles avocado processor Yucatan Foods.

The deal comprised of two tranches: an $8.2 million investment in the food processor’s junior secured subordinated debt and a $2.6 million investment in subordinated convertible notes. 

Yucatan is the second most recognisable guacamole brand in the US in terms of market share, according to a statement from the company. The latest deal is Harvest’s third transaction this year.

Dan Walton, chief financial officer at Yucatan, said: “Harvest brought a flexible and patient approach that allowed Yucatan to achieve our financial goals by providing capital for large scale manufacturing capacity expansion, as well as a smaller internal capitalisation.”

Richard Buckanavage, chief executive at Harvest, told PDI that 2016 offers a “mixed bag” of opportunities for BDCs. He said that while the competitive landscape has shifted in the firm’s favour, the number of opportunities in the first quarter of this year has been smaller compared to the same period last year. But he said he is generally optimistic about the year.

Buckanavage worked with senior associate Salvatore Jeraci on the deal. 

Harvest Capital Credit specialises in providing debt financing solutions to companies operating in the US lower middle market. It targets companies generating $1.5 million EDITDA and targets debt investments ranging from $2 million to $15 million, according to the firm’s website.