Muscoda Protein Products secures New Markets Tax Credit and debt financing for facility expansion and equipment purchase

Our client’s need

Muscoda Protein Products, LLP (MPP or the company) is one of the most trusted and innovative manufacturers of food grade, whey-derived protein and lactose in the US. The company receives its whey supply from its sister company Meister Cheese Company, LLC (MCC) and other local cheese processors. In order to meet increased demand for its whey and lactose products, the company sought to increase efficiencies and improve product quality by expanding its existing facility and purchasing new equipment. Because of the specialized nature of the equipment and rural location, banks were tentative to lend all of the required capital.

Baker Tilly solution

Baker Tilly analyzed the potential sources of capital to fund this major expansion and determined that New Markets Tax Credits (NMTC) would provide significant funding benefit to the project. Funding from the NMTCs provided $4.9 million in capital. This capital is at a low interest rate and the loan is subordinated to the primary lender. This allowed the company to access the funds required to complete the project even though appraised values were low due to the rural location of the assets. MPP’s and MCC’s significant joint impact on the local supply chain played a critical role in obtaining an allocation of NMTCs. The companies estimated the project would increase local milk purchases by $12 million, increase purchases of whey from other nearby cheese producers, retain and create new jobs, and reduce the amount of waste that would need to be disposed.

Baker Tilly Capital performed financial modeling for the transaction, solicited NMTC allocations from Community Development Entities, assisted with the NMTC application, and advised throughout the closing process.

Results achieved

By demonstrating the positive economic impact MPP’s $18.7 million facility expansion and equipment purchases would have on the local, rural community, Baker Tilly Capital assisted in securing an $18 million allocation of New Markets Tax Credits and a new corresponding debt facility for the company . When the current $18.7 million expansion project is completed, it will increase MPP’s facility to 43,300 square feet.

“Our business at Muscoda Protein Products has grown rapidly over the past few years and we needed to expand our facility and purchase new equipment to keep pace with customer orders. We were familiar with NMTCs, having received a previous allocation. With Baker Tilly Capital’s assistance, we were able to secure another allocation, which provided a key source of capital that will allow us to complete the expansion.”

– Scott Meister, Co-Owner/President

For more information on this topic, or to learn how Baker Tilly Capital specialists can help, contact our team.

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