multi-plant fabricator of steel tubing

$160M Revenue

Company Overview

The Company operates structural and mechanical tubing mills and provides processing and fabrication services for OEM’s from seven locations in the eastern half of the United States. The tubing operation and processing segment service a wide variety of industries. The fabrication segment serves as the primary supplier of fabricated metal products for various OEM’s in the automotive and recreational vehicle industries.

Engagement Overview

FDP was engaged to improve profitability, develop a detailed financial forecast, assist in monitoring weekly cash flow, identify synergies untapped in the “roll-up” business model, and assess the financial and strategic viability of various initiatives.

FDP immediately identified and quantified significant inventory valuation and accounts receivable collection issues that resulted in material adjustments in the financial statements.

In order to provide an opportunity to service its debt requirements, management and Fort Dearborn implemented approximately $4 million in annual expense reductions. 

Due to the working capital constraints, management and Fort Dearborn allocated the limited cash resources to maintain the most profitable divisions, closed three divisions, and sold the remaining inventory. 

Fort Dearborn also worked with management to develop a strategic plan to consolidate the existing tube mills into one full-service facility, and to consolidate certain fabrication operations.

These consolidation plans were expected to result in an approximate $8 million improvement in cash flow (with a one-time $5 million capital expenditure) over a two-year period. 

Results

Based upon these conditions, Fort Dearborn advised the Company to seek protection from their trade creditors by filing a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code.  The Company engaged Fort Dearborn as their financial and business advisor during the Chapter 11 proceedings.  In order to attain debtor-in-possession (“DIP”) financing, the Company was forced to accept a liquidation strategy under the Chapter 11 filing, where four divisions were sold and the remaining three were liquidated.

FDP News

Oct - 23

Max Bechtel and Austin Curtis join Fort Dearborn Partners

Please join us in welcoming the newest members of the Fort Dearborn Team, Max Bechtel and Austin Curtis.

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Apr - 23

Fort Dearborn advises Reliable Knitting Works

Fort Dearborn Partners served as the exclusive financial advisor for the refinancing of Reliable Knitting Works, a $125 Million Wisconsin-based Company.

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Oct - 22

Alice Chan joins Fort Dearborn Partners

Fort Dearborn Partners is pleased to announce that Alice Chan has joined our firm as a Director.

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