Company Overview
The Company was a $200+ million manufacturer of store fixtures and merchandising equipment sold primarily to non-food retailers. Products ranged from front room sales to industrial racking, specialty showcases/counters to hardware.
The Company was organized as four operating divisions, manufacturing and distributing product from eight primary production facilities and five warehouse and distribution facilities.
Engagement Overview
A confluence of events, including the Company’s #1 customer reducing store openings by 80%, a second customer filing for bankruptcy, and overall slowing of retail expansion, led to severe financial distress for the Company.
FDP was engaged as the Chief Restructuring Officer and Investment Banker to implement a restructuring plan and guide the business through a bankruptcy filing. During the engagement, FDP:
–Identified several issues in the financial statements that needed to be “cleaned-up” prior to developing a reliable budget and financing request;
–Identified plants to be closed, consolidating operations and functions, sold non-core assets, and reduced headcount and other operating expenses, including compensation of owners and managers;
–Met with vendors and customers to re-establish credibility and ensure operational stability by executing on promised delivery dates, payments, etc.; and
–Worked with potential buyers to explain the restructuring plan, negotiate deal points, support due diligence and ensure adequate funding during the sales process.
FDP was retained post closing by the Chapter 11 Trustee and the buyer to manage the transition services agreement with the remaining operation.
Provided accounting support for bankruptcy filing needs, including weekly financial reporting to bank group.
Supported the investigation and analysis of insider transactions and preference payments for various attorneys.
Results
Fort Dearborn negotiated with the Company’s bank group prior to the bankruptcy filing to begin funding operations again and increased the level of total bank debt by approximately 35% to nearly $48 million.
Our seller advisory process resulted in 17 buyer visits and a successful auction, which included a 15% increase in the ultimate sales price.
Due to FDP’s intimate knowledge of the deal and Company operations, we were able to successfully negotiate the settlement of transaction holdbacks and arguments over asset valuations with the buyer.