Company Overview
The Company was a manufacturer of injection molded products for the communications and lighting industries with operations in the US, and a stand-alone plant in Mexico.
After a series of financial set-backs, ownership was exploring whether to sell, liquidate or file for bankruptcy.
Engagement Overview
The manufacturer experienced a dramatic decrease in volume. Fort Dearborn was engaged to improve profitability and assess the Company’s strategic options.
FDP identified and initiated several profit improvement and cost reduction measures to stabilize the business, including: a price increase, plant shutdowns and a reduction-in-force. These actions resulted in the client generating positive income from operations.
Fort Dearborn assessed the viability of the business, preparing multiple case scenarios, and determined that a sale/wind-down strategy would provide the greatest benefit for all stakeholders. This effort allowed ownership to make a timely decision that ultimately led to maximizing value, as the Company was marketed for sale while operations were stable.
FDP was the Company’s exclusive financial advisor and coordinated all aspects of the expedited sale process, including preparing the information memorandum and related financial analyses; identifying the best fit strategic buyer; negotiating the LOI’s and APA’s for both the U.S. and Mexican operating companies.
After closing the transactions, FDP effectively managed the wind-down of the estate and day-to-day operations after the departure of the President, CFO and Controller. Fort Dearborn also prepared communications and negotiated with creditors in order to avoid bankruptcy and minimize wind-down costs including the successful settlement of a claim for business damages filed by a key customer.
Results
Fort Dearborn’s efforts allowed the injection molded products manufacturer to avoid filing bankruptcy and maximize returns to all creditors:
–Senior secured lender paid-in-full after sale transaction;
–Negotiated settlement with multiple equipment lessors, returning $0.90¢ on the dollar to the lessor group; and
Paid $0. 85¢ on the dollar to unsecured creditors/vendors