Venture fund investments boost prospects for two South Florida firms
Sun Sentinel- March 11, 2010
Two South Florida businesses are the first recipients of financing from a newly created Orlando-based venture fund with up to $450 million to lend in Florida.
The companies — Great HealthWorks and Association Financial Services — will receive "significant" loans to help them grow, Florida Mezzanine Fund partner Seth Ellis said at a launch event Thursday in Hollywood.
Hollywood-based Great HealthWorks makes and distributes an anti-inflammatory product called Omega XL, which is derived from the oil found in the New Zealand green-lipped mussel. And Miami-based Association Financial Services provides a range of financial services to condo and homeowner associations.
The jobs, some of which will pay wages of $14 to $18 an hour, are mainly in customer service, accounting and warehousing.
While the exact loan amounts were not disclosed, Florida Mezzanine has partnered with CapitalSouth Partners of Charlotte, N.C., to provide the venture funds, which can range from $500,000 up to $30 million in debt financing for each investment, Ellis said.
The mezzanine loans are typically for five-year terms and payments are interest-only up to the third year, when principal payments may kick in. The lender also gets warrants that typically can be exercised for an equity stake in the company or sold back when the loan is repaid.
Since its founding in 1998, CapitalSouth has invested about $45 million in Florida's small businesses, President and Chief Executive Joseph Alala III said.
Great HealthWorks relocated its operations from a 9,000-square-foot Coral Springs office in January after it outgrew the space, Meares said.
Now it is in two buildings totaling about 48,000 square feet of office and warehouse space.
"We wouldn't be able to grow without Florida Mezzanine," Meares said.
The new funding will enable the company to complete upgrades to the new facility, hire more staff and expand the marketing of Omega XL, which Meares, 65, called a "one-of-a-kind product."
"We want to make it known to the masses," Meares said.
According to the product's website, Omega XL, which is sold in softgel capsule form, contains a blend of omega-3 polyunsaturated fatty acids that can help relieve swelling, stiffness and pain resulting from conditions such as arthritis and asthma.
"It alleviates some of the stiffness that can start to occur in people, at our age," said Nat Moore, 58, a former professional football player with the Miami Dolphins who started using Omega XL in November.
An avid golfer, Moore who attended the launch, said the product helped to relieve tenderness he'd been experiencing in his wrist.
Omega XL is not a drug or medication, and does not require Food and Drug Administration approval, but it adheres to the FDA's requirements for nutraceuticals, according to the product's website.
It's sold online, through TV infomercials and doctors' offices, Meares said.
With the new financing, Association Financial Services has been able to hire five new staffers and expand its operations to Tampa, Chief Financial Officer Alexander Moskovitz said Thursday at the launch.
Florida Mezzanine said it plans to consider up to 200 Florida companies for funding in its first year.
"It [fund] will be an opportunity for really good businesses to take it to the next level," Lt. Governor Jeff Kottkamp said Thursday.
Arlene Satchell can be reached at asatchell@SunSentinel.com or 954-356-4209. Follow her on Twitter.com @TheSatchreport.
© Sun Sentinel. All rights reserved.