Interim Management Turnaround and Successful 363 Sale

60M

Annual Sales

25M

in Debt

Victor Plastics, North Liberty Iowa

Challenge


Injection molder primarily for appliance industry. $60 million sales. $25 million debt.


  • When Maytag was purchased by Whirlpool Victor, a major supplier to Maytag, lost 40% of its annual revenue.
  • Vendors were surcharging current deliveries to pay down past due amounts.
  • $25 million of senior and junior debt was at risk and the lenders wanted to liquidate.
  • $2 million was needed to consolidate plants and get the company viable at a lower run rate of sales.

Solution


  • MorrisAnderson was brought in to pursue a 12-week liquidation plan within a Chapter 11.
  • MorrisAnderson believed a going concern sale would generate more value than a liquidation.
  • Concurrently, MorrisAnderson also marketed the company on a dual track section §363 process.
  • The money losing Mississippi location was closed and customers were surcharged to raise margins.

Results


  • Because of the changes implemented, the Company became cash-flow positive.
  • Eleven prospective buyers emerged.
  • In a four-month period as part of a liquidation process, the Company was sold at 5.5 times projected EBITDA.