Selected Transaction: Equity and Debt Financing

The ClientPECO

PECO Pallet, Inc. ("PECO") is a logistics management company, located in Yonkers, NY. PECO provides solutions to users of wooden pallets by establishing a nationwide third party pallet rental and management service for the grocery and consumer goods industries. The potential market for pallet rental is estimated at $2 billion. There is currently one other competitor, CHEP, which has an estimated 35% penetration in the market and is growing at 26% per annum (as of 2003). The overwhelming demand for PECO’s services from current customers required the Company to raise capital for the purchase of pallets.

The Assignment

Context Capital Group ("Context Capital") served as lead investment banker to PECO Pallet Inc. Context Capital prepared offering materials, contacted and set up meetings with investors, initiated the transaction, structured the investment and led negotiations with all investors. Private equity investors included The Walnut Group, MK Capital, Advantage Capital Partners, Stonehenge Capital, The PECO Ohio Group, and existing investors (including White Mountains Capital, Green Range Partners, and individuals) which have made a $12 million Series B Participating Preferred Stock equity investment in PECO Pallet, Inc. In addition, Advantage Capital Partners and Stonehenge Capital have provided a combined $4 million in subordinated debt.

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