New York and Atlanta – Microf LLC (“Microf”), a national market leader in providing rent-to-own and lease-purchase solutions for residential HVAC and plumbing systems, has completed a significant recapitalization transaction and expanded its senior debt facility to fund its ongoing growth and other expansion efforts.
As part of the recapitalization transaction, Star Mountain Capital, LLC (“Star Mountain”), a lower middle market-focused specialized investment firm with over $4.0 billion of assets under management, invested additional growth capital into the business to further support Microf’s origination efforts. In conjunction with the Star Mountain investment, Encina Lender Finance, LLC (“ELF”) and Georgia Banking Company (“GBC”) have also increased Microf’s existing senior credit facility.
“I am very happy and proud that our capital partners have the confidence in our business model and management team to make these investments at such a critical time. The capital markets environment continues to be challenging for companies in the lower middle market segment, particularly in specialty finance” said Zenon Olbrys, Chief Executive Officer of Microf. “We are experiencing dynamic contractor engagement and customer growth with very solid credit quality, and we expect this to continue for years to come.”
“The Star Mountain investment provides a valuable endorsement of our business and allows us to continue to focus on serving the needs of our contractor base and their end customers. We are pleased to continue to work with Encina because of their expertise with specialty finance companies and their close familiarity with our assets, business, and operations,” said Olbrys. “These relationships align us with capital partners who support our growth and product expansion plans.”
“Encina Lender Finance is pleased to continue to support the Microf team. Over the past several years of our relationship with Microf, we have been impressed with their growth and credit approach,” stated Edward Chang, Co-Chief Executive Officer of ELF. “We’ve seen how Microf’s lease-to-own solutions add value to merchants and consumers. We look forward to working with Zenon and his team as they continue to scale their business.”
“Since our initial investment, we have been impressed with Microf’s strategy and the market segments that it serves,” stated John McCarty, Managing Director of Star Mountain. “Microf’s solutions have consistently provided critical HVAC access to historically underserved customer and market segments. The company’s continued growth post-Covid and through the challenging economic environment of the last few years further supports the value-added offerings Microf provides,” said McCarty. “We are pleased to continue to support the company in its next phase of growth. ELF and GBC have been important partners for the company as well, and we look forward to continuing our strong relationship with them.”
About Star Mountain Capital, LLC
With over $4 billion in assets under management (committed capital including debt facilities as of 5/15/2024), Star Mountain takes a data-driven approach to investing into the North American lower middle-market through two complementary investment strategies: (i) direct debt and equity investing and (ii) secondaries (acquiring LP interests and direct assets and making primary LP commitments). Star Mountain believes these complementary strategies provide data-enhanced, scalable, diversified, and customizable access for its institutional and qualifying high-net-worth investors to established businesses that generally have at least $15 million in annual revenues and under $50 million in EBITDA. Its investors include public pensions, private pensions, insurance companies, commercial banks, endowments, foundations, family offices and high-net-worth individuals. Star Mountain is employee-owned and shares its profits with 100% of its U.S. full-time employees as part of its focus on maximizing value for its stakeholders and investors through alignment of interests. For more information, visit Star Mountain Capital.
About Encina Lender Finance, LLC
Headquartered in Atlanta, Encina Lender Finance offers revolving lines of credit and term loans ranging in size typically from $20MM – $100MM to emerging and established specialty finance companies across consumer and commercial asset classes. For more information, please visit Encina Lender Finance.
About Georgia Banking Company
Georgia Banking Company is a locally owned community bank headquartered in Atlanta, Georgia, with approximately $1.6 billion in assets as of June 30, 2023. Led by fifth-generation banker CEO Bartow Morgan, Jr., GBC’s team of veteran bankers is focused on leveraging technology to deliver an exceptional service experience to meet the needs of growing businesses and consumers. For more information, visit Georgia Banking Company.
About Microf
Headquartered in Atlanta, Georgia, and founded in 2010, Microf is a national market leader in providing rent-to-own or lease-purchase solutions for residential HVAC and plumbing systems. The company also offers home improvement merchants value-added technology platform services to maximize incremental sales through a streamlined financing and leasing application. For additional information, visit Microf.