BDA Raises $75 Million In Financing

Top 40 distributor Bensussen, Deutsch & Associates (asi/137616) has secured $75 million in funding from equity firm American Capital. While financial details on the deal weren’t disclosed, BDA CEO and co-founder Jay Deutsch confirmed to Counselor that he and Eric Bensussen will continue to own and run the company.

“American Capital proved to be the perfect partner for BDA as we look to take advantage of our vast growth opportunities, both in North America and abroad,” said Deutsch, in a statement. “In addition to growth capital, American Capital brings additional in-house resources and cross-industry expertise to accelerate our strategic planning and the growth we are projecting.”

American Capital, a publicly-traded company, manages $19 billion of assets and has a history of investing in marketing, medical and financial firms. The equity company, which has eight total offices in the U.S. and Europe, considers investment opportunities that range from $10 million to $750 million, according to its website. “BDA serves some of the world’s most admired global brands with its comprehensive set of branded merchandise solutions,” said Gordon O’Brien, president of American Capital’s specialty finance and operations. “BDA’s top-tier team has a decisive vision for how merchandise will play an even larger role as brands look to capitalize on a robust economy and opportunities to engage customers.”

Over the last five years, BDA’s sales have increased by 40%, although its revenues declined year-over-year by 8.5% in 2012 and 2.8% in 2013. The distributor also sent a letter to suppliers in March admitting to “unintended consequences” following its launch of an Oracle ERP system in August 2013. At the time, the company said the ERP issues led to accounts receivable and payable problems. Since NOVEMBER of last year, BDA’s ASI Connect score – a credit rating of distributors provided by suppliers – has fallen by 35 points. Today, BDA’s Connect score is 69, while the industry average is 98. BDA, though, says that it has now resolved its ERP system problems and is planning for growth.

“We have stabilized the systems issues and we are now seeing the process efficiencies originally promised,” Deutsch told Counselor. “We’ve seen significant revenue growth in the first half of this year. With new and expanding  partnerships in the works, we’re preparing to finish the year strong and for explosive growth in 2015.” – DV & AC