Cascadia Capital Advises on a $65 million PIPE, Allowing a Leading Industrial Technology Company to Complete a Successful Restructuring

Challenge

Flow International (NASDAQ: FLOW), a Kent, WA-based provider of water jet cutting systems and other industrial technologies, engaged Cascadia Capital to advise the company on a private investment in a public equity (PIPE) transaction. Cascadia Capital was selected due to its understanding of the PIPE market as well as its experience in restructuring and debt financing services. Flow also felt the firm's network of investor relationships would serve as a resource in understanding potential terms and the market's appetite for the transaction. At the time of initial engagement, Flow wanted to understand the merits of entering into a PIPE transaction with a single top-tier private equity investor versus selecting a more broad-based institutional investment group.

Solution

Cascadia Capital first created an analysis of the benefits and risks associated with both the single investor and broad-based PIPE options. It then provided a comprehensive review of the PIPE market and the most relevant PIPE transactions in order to determine competitive transaction terms. Finally, Cascadia Capital completed in an in depth examination of Flow's business plan and capital structure in order to help the company determine the optimal restructuring scenario.

Results

Cascadia Capital delivered extensive analysis and transaction insight to Flow, eventually recommending that the company undertake a widely-marketed, broad-based PIPE transaction. Capitalizing on extremely strong investor demand, the company completed a $65 million equity raise with very favorable terms, allowing it to retire its subordinated debt and commence its strategic growth initiatives. Flow's stock price increased 22% prior to closing and increased over 100% in the three month period after closing.