The Company is a $25 million open die forging operation. For more than 100 years, the Company has sold forgings of diverse sizes and materials into various industry end markets.
Five years before significant economic turmoil disrupted its largest end market, the Company made a strategic decision to invest in a $13 million expansion to increase capacity and capabilities, funded wholly by new debt. The significant debt service became untenable when a sharp decline in demand and commodity pricing resulted in a sales decline of more than 30% in just 18 months, sending the Company into a severe liquidity crisis and bankruptcy shortly thereafter.
FDP was engaged to evaluate the strategic alternatives and advise on the options for the optimal path forward: reorganize out of bankruptcy, possible liquidation scenarios, or a sale of the Company and its assets.
FDP worked with the Company’s management team and the senior lender to build consensus on the optimal exit strategy. FDP focused on both engaging in profit improvement and operational initiatives to restore profitability and stability to the Company and preparing the Company for a bankruptcy Section 363 asset sale.
FDP prepared marketing materials, marketed the Company to prospective investors, provided financial and operational information to prospective buyers, and assisted in the negotiations.
The Company exited bankruptcy through a Section 363 asset sale. Multiple interested parties were identified, and the Company ultimately sold at the bankruptcy auction for a nearly 20% premium over the stalking horse offer.
Through the turnaround process, the Company was able to restore profitability to an acceptable level, retain all key vendors and customers, grow revenues more than 12% through the bankruptcy period, and restore forward-looking probable EBITDA growth, all with nearly 100% job retention across the organization.
The Company ultimately sold at the bankruptcy auction for a nearly 20% premium over the stalking horse offer.