Company Overview
A $260 million construction contractor and landscape maintenance business with locations in the Western U.S.
The Company provided diverse services, including road rehabilitation and paving, freeway seismic retrofitting, bridge construction and repair, pier and dock construction, reservoir and culvert construction, sports field and golf course construction, commercial landscape construction and landscape management services.
While recording $14 million of EBITDA for the previous 3 years, current year EBIDTA was negative $13 million.
Engagement Overview
•The Company’s expansion into new construction markets was not well executed, resulting in unprofitable bidding, significant capital erosion and increased debt. Lack of overall accountability led to a dramatic understatement of the losses.
•FDP was initially engaged to perform an operational review of the business plan, assess management and evaluate strategic alternatives:
–Evaluated division performance;
–Determined the interdependency, relationships and requirements between operating divisions to evaluate ongoing operations and long-term strategy;
–Identified accounting misstatements and provided accurate division performance and capital position;
–Evaluated high-level strategic alternatives utilizing multiple valuation measures for each division;
–Initiated cost reductions while alternatives were explored; and
–Recommended specific restructuring plan and stabilized support from creditors, bonding company and stakeholders.
•With advice from the Board and its lenders, the CEO was terminated, and FDP was installed as interim CEO; FDP was also engaged to sell the Company:
–Negotiated with secured parties to fund ongoing operations in order to complete an orderly sale transaction;
–Secured bonding capacity to allow for continued operations throughout the sale process;
–Empowered core management through leadership team; and
–Managed complex sale process for sale of five operating units in separate transactions.
Results
Fort Dearborn’s leadership throughout this engagement facilitated the successful sale of the business in five separate transactions.
Created confidence in all interested parties that allowed for the orderly sale of the business.
Identified buyers and structured sale transactions that maximized value and minimized employee displacement.
Identified underutilized assets and marketed them for sale to produce critical working capital.
Secured creditors were paid in full and unsecured creditors received a significant return.