RAB Design Lighting makes a smooth generational business transition
President of RAB Design Lighting, David Beron was looking to purchase the Toronto-based company, which designs and manufactures high-quality commercial, industrial and residential LED lighting and related lighting solutions and products, from his parents. Beron, who was former Vice President of Market Operations, wanted to significantly grow the business and bring it to the next level.
With over 10 years of hands-on management experience in the company, as well as extensive expertise in technology and product innovation, he was a natural candidate to take the reins of the firm, which has served the electrical distribution market for over 50 years with a broad range of well-designed, cost-effective and energy-efficient products combined with best-in-class customer service.
Financing the succession and growth
To succeed with the MBO, he needed financing to move forward with the succession and provide additional cash to grow the firm. As a solution, BDC’s Growth & Transition Capital experts worked very closely with the company to assess its needs and structure a financing deal with the firm’s primary lender. Given the fact that there was little equity in the transaction, BDC provided mezzanine financing, which supplemented senior debt, helped maintain vital capital in the firm and generated additional cash for growth. Throughout the two-year transition period, BDC’s highly experienced financing professional provided invaluable guidance to help deal with complex and unexpected issues and the emotional aspects of a family-owned business transition, as well as facilitated access to critical resources such as legal support and accounting.
A smooth transition
With a customized financing solution and sound advice from BDC, RAB Design Lighting conducted a smooth and successful MBO, maintained precious cash flow in the business and built additional capital for long-term growth. David Beron’s father Irwin will remain on as chairman in an advisory role. Given the company’s fast-track growth objectives, the Growth & Transition Capital team also collaborated with BDC Advisory Services to enroll David in its Growth Driver Program, which is designed for leaders with ambitious growth plans. With guidance from an Executive Advisor, he will focus on building a sustainable growth strategy for the company.
Along with getting the financing deal done, BDC was a true partner with us. I felt reassured that the Growth & Transition Capital team had extensive experience in dealing with family-owned business transitions. I was impressed with the calibre of advice that they gave us in what can be a very emotional time. They were with us one-hundred percent all the way,” says Beron.