Principals in Acquisition Who Restructured an Overleveraged Manufacturer of Components
This debt ridden manufacturer (and importer) of components used to assemble hydraulic breakers and other products used in the construction demolition industry was unable to meet debt obligation payments from an LBO era acquisition which ultimately placed debt on the balance sheet equal to twice the value of revenues. The assets of the business were acquired immediately preceding a move which would have placed the company in bankruptcy. As a result, a complete restructuring of the business was required.
The company had a valuable, but very vulnerable, dealer/distributor network that was responsible for 80% of the companies' sales. This dealer organization had to be reassured of the future viability of the business and of the ability of the company to continue an uninterrupted supply of quality product. Also, since the company relied extensively on a vendor network to supply integral components used in the manufacture and assembly of the finished products, and the vendor network was owed excess and overdue vendor debt, they had to be assured that they would be paid promptly, and the past due paid down over time, so that a flow of product would continue to meet shipping demands. This was all accomplished in the first 90 days of ownership with a constant and consistent message thru meetings with the dealers and a vendor composition to keep current on new purchases and pay back the past due debt pro-ratably over 18 months.
Inglewood professionals held the positions of Chairman of the Board and CFO/COO during the 13 years as owners/operators of this company. They managed a workforce of 84 employees and key strategic suppliers for a significant outsourced network. During this period of time, sales were increased by 100% and the average return on net assets exceeded 30%.