Eugene-based Gorilla Capital, a large “fix and flip” real estate firm, on Monday said it will get $24 million loan from a New York investment firm, which also will become a minority owner of Gorilla.
Arena Investors will provide a $24 million line of credit to Gorilla. Coupled with $16 million in Gorilla’s own funding, the firm will have $40 million to expand in 23 states where it now finds, buys, renovates and sells homes. Gorilla also wants to expand into Alabama, Missouri, Oklahoma, Wyoming and, possibly, Montana, Gorilla CEO John Helmick said.
He declined to explicitly state what ownership share Arena will have in Gorilla, but indicated it will be 20 percent. “We have a five-member board, and (Arena) will have one seat on the board. You do the math.”
Gorilla, founded in 2006, will continue to be majority owned by Oregonians, Helmick said.
The funding infusion and resulting business activity will require Gorilla to hire six employees at its High Street headquarters, where 16 people currently work. New employees will include accounting staff, construction supervisors and account managers, Helmick said.
Gorilla has previously borrowed to grow. It now has annual sales of $70 million, Helmick said. However, the firm has never received debt financing as large as $24 million, he said.
Gorilla still finds, fixes and sells distressed homes in Oregon, but the company’s plans to grow in other states has been hindered by its inability to get financing, Helmick said.
Arena will provide more financing to Gorilla, beyond the $24 million, Helmick added.
“Arena believes in Gorilla Capital,” he said. “They would like to see us become a nationwide company with operations in all 50 states and with sales of over $400 million.”
Helmick said Arena was one of 15 investment firms he approached about financing.
He said he expected an investment firm to take an ownership position in his company as part of a sizable financing deal.
“We have been capital constrained for the last two years,” Helmick said. “We now have a capital partner that will let us grow to whatever size the market determines.”