“FGI provided critical support in helping us to leverage our international assets to obtain enough asset-based financing to complete our restructuring and move forward with our turnaround efforts.”

-David Knowlton
CFO, Dawn Food Products, Inc.


Dawn Food Products, a family-run $1.4 billion provider of bakery goods and supplies to major retailers and restaurant chains, was facing challenges that would sound familiar to anyone operating in an increasingly cost-competitive global economy. After expanding sales and manufacturing operations into Europe, Canada and Mexico, this 80-year old Michigan-based company, now run by the family’s second generation, was facing a critical crossroads. As a result, Dawn needed to generate as much liquidity as possible in a very short period of time by leveraging additional assets outside the U.S., particularly in Mexico.


Dawn was facing a two-pronged challenge—(1) replacing an overly restrictive cash flow loan with an asset-based loan with fewer covenants and (2) undertaking a major three-year restructuring initiative. Not surprisingly, the need to leverage foreign assets increased the deal’s complexity.

At the same time, Wells Fargo, the main lender, stipulated that Dawn needed to have access to a certain level of opening credit availability for Wells Fargo to approve the main asset-based loan. Given that this deal involved paying off an existing loan, Dawn needed access to every possible dollar in financing.

With various lenders unable or unwilling to provide the capacity and flexibility Dawn needed, the company turned to FGI.


Working with Wells Fargo, FGI was responsible for structuring the international portion of the deal in order to maximize available financing. By fully leveraging Dawn’s Mexican assets, FGI was able to provide $15 million in a revolving line of credit based on the accounts receivable for all of the company’s customers in Mexico. The key to the success of the deal in terms of timing, capacity and the attractiveness of the terms was FGI’s willingness and ability to work with other lenders.

In addition, by relying on the relationships it had built in its seven years of operating in Mexico, FGI was able to swiftly facilitate the process, have audit and legal work move forward nearly in real time as the deal progressed, and close the deal in less than six weeks, a virtually unheard-of timeframe for an international deal. Closing financing in Mexico typically requires 8 to 12 weeks.


As a result of these efforts, Dawn was able to maximize its available financing and to complete the overall refinance of the business at a lower cost than previous financing. This left the company free to concentrate on keeping its turnaround efforts on schedule. Now that its Mexican operations have a dedicated line of working capital, the U.S. parent company has been able to free up more liquidity to apply to its restructuring efforts.