California poultry business secures $40m in private credit

Great Rock Capital and GemCap Solutions have extended loans to Zacky & Sons, a Fresno-headquartered poultry provider. The former's chief executive tells Agri Investor why he likes the ag sector while other lenders don't.

Zacky & Sons, a family-owned vertically-integrated grower, processor and distributor of premium poultry headquartered in Fresno, California, has secured more than $40 million in credit from a pair of private lenders.

Great Rock Capital, an asset-focused commercial finance company headquartered in Connecticut, provided a $25 million term loan to the company. In addition, the firm also helped arrange an additional $16 million revolving loan for Zacky & Sons from GemCap Solutions, a mid-market private lender headquartered in Malibu, California.

Zacky & Sons was established in 1928 and its offerings include chicken and turkey products and a wide selection of hot dogs. In addition to poultry raised on its own farm, the company sources poultry from local family-run ranches and farms. Since 2013, Zacky & Sons’ poultry has been vegetarian, antibiotic-free and free range.

“The financing provides an optimal structure for Zacky’s, an iconic family-owned business, and we look forward to working with GemCap Solutions in the future to provide creative liquidity solutions to the middle market,” said Great Rock chief executive Stuart Armstrong.

GemCap co-president David Ellis told Agri Investor that his firm has made agriculture a focus of its lending and, as a result, has developed expertise in the regulatory challenges that often keep other lenders away from the sector.

Ellis, who declined to specify the interest rate, term or covenants attached to the loan offered to Zacky & Sons, said the working-capital loan is secured by the company’s live and processed flocks in addition to its receivables.

GemCap’s current portfolio includes loans to companies involved in greenhouse tomatoes, hay growing, cattle ranches, stockyards, fishing and seafood distribution, among other sub-sectors, according to Ellis. The firm’s past financings, Ellis said, have included support for companies engaged in value-add agricultural processing, orange juice, soft drinks, wine and other sub-sectors.

“We like the sector and know most lenders don’t. Certainly, if you go back to 2008, 2009 and 2010, when a lot of things were falling, food was rising and constant,” Ellis explained. “We are very active in the space because we think that the food and the ag space is a great counterbalance to recessionary risk.”

A privately held firm backed by an affiliate of Medley Capital, GemCap specializes in senior-secured, asset-backed loans and invoice factoring to mid-market US and Canadian business across sectors. Invoice factoring financings range from $50,000 to $1 million and the firm’s asset-backed loans range from $1 million to $10 million.