TNR Entertainment Corp. (“TNR”), a portfolio company of Celerity Partners, a Los Angeles based private equity firm, has completed the sale of $10,000,000 in preferred stock to a New York based hedge fund. TNR is a Texas based provider of DVD rentals to value oriented consumers, primarily in grocery stores, via in-store kiosks. TNR was founded in 2002 and since that time has refined its kiosks and associated software, established contracts with content distributors, and won multi-year contracts with several large grocers representing hundreds of stores.
“The company is rapidly deploying kiosks in its target markets and will be able to accelerate its growth plan with this equity infusion,” according to Dan Conway, Managing Director of FocalPoint. FocalPoint tapped its relationships within the hedge fund community for this capital raise. “Hedge funds have demonstrated considerable flexibility and responsiveness. Their ability to move quickly and to invest at all levels of the capital structure – senior debt, mezzanine debt and equity has proven to be very compelling. This transaction, for example, took less than four weeks from term sheet to closing. This deal represents yet another example of the growing role of hedge funds in middle market corporate finance.”
“This funding means we can satisfy the pent-up retail demand for our kiosks while accelerating the rollout in new markets nationally,” stated Richard B. Cohen, Chief Executive Officer of TNR. “The resulting increased cash flow should provide us with capital to expand our market presence even more aggressively in 2007, as well as to evaluate new technologies and to provide even greater economies of scale.”
Steve Adamson, Managing Partner of Celerity Partners, said, “The addition of such a well-capitalized investor is a major step in the evolution of The New Release, allowing the company to capitalize not only on the broader $27 billion DVD industry, but more importantly, on a rapidly growing sector that focuses on alternative means of distribution to effectively meet consumers’ needs.”
FocalPoint is an independent investment bank specializing in mergers and acquisitions, private placements of debt and equity, and financial restructurings. The firm’s primary focus is on middle-market companies with revenues between $10 million and $250 million in a diverse range of industries. FocalPoint has built a practice in accessing not only the traditional sources of debt and equity capital but increasingly the hedge fund community. Many hedge funds are building dedicated lending and private equity investing practices and are often able to compete more aggressively in terms of price and leverage than traditional capital sources.
Please feel free to contact Dan Conway at (818) 728-6047 with any questions about this transaction.