Case Study Background

A regional (Midwest U.S.) manufacturing and distribution company was a long-standing asset of an international real estate development and investment firm. This ninety year old company had seen little investment and accordingly was generating negative cash flows. Our firm was engaged by a private equity firm to evaluate the company and deliver a go/no-go recommendation.

Analysis and Teamwork

Our team worked with the client to define their investment criteria, timeframes and timelines. With clarity on their frameworks, we began a covert assessment of the local market, the overall industry, the competitors of the targeted company, along with a general view of their organizational structure. In addition we assessed the sellers’ portfolio, recent acquisitions/divestments and public records on in-process transactions.

Results

The comprehensive “skunk works”, built the foundation for an unsolicited letter-of-intent for our client and contractually engaged to complete the due diligence process. Our up-front view allowed us to accelerate the due diligence process, highlight key areas of negotiation leverage (underfunded union pensions and cultural union affiliation impediments) and ultimately secure an asset value transaction and seller absorbing the pension shortfall. Our efforts enabled a three year turnaround (18 months 17%EBITDA) and 4X earnings sale for our client