A roll-up of several firms that provide temporary staffing, project outsourcing, and executive search in accounting, finance, and information technology.

The roll-up was funded with equity from a major venture capital firm, debt from a three-member bank group, and subordinated seller notes.

Compared to the prior year, revenues were off by approximately 30% due to softness in the overall economy.  While management had initiated several expense reductions, EBITDA was inadequate to properly meet debt service requirements.  Management’s credibility was further diminished by continuously missed budgets and revised financial forecasts.

Fort Dearborn Partners immediately assessed the situation, reviewed management’s actions, and identified potential profit improvement opportunities.  

FDP prepared a 13-week cash flow budget and a monthly forecast that the company performed favorably against and that stabilized the predictability of the cash flows. 

As part of this process, FDP identified material future cash disbursements that were fundamental to understanding the expected financial requirements of the business. The Company was able to navigate cash flow challenges successfully. 

After discussing the options with all parties involved, the most viable solution included a restructure of the debt, an additional equity investment from the venture capital firm, and a $1 million expense reduction from the management team.  Fort Dearborn Partners advised the parties involved on the newly invested capital, the debt restructuring, and the terms and conditions for funding.