Selling a Distressed Auto Supplier in a Contentious Bankruptcy

Automotive & IndustrialLitigation SupportTurnarounds & Restructuring

170M

Annual Sales

40M

in Debt

Blackhawk Automotive Plastic Inc., Salem Ohio

Challenge

Automotive Plastic Injection Molder. $170 million in annual revenues. $40 million debt. Tier 1 supplier to GM. Tier 2 supplier to International Automotive Components. Plants in Salem and Mason, OH and a technology center in Troy, MI.

  • The Company acquired approximately $40 million in transfer business when other automotive suppliers failed, but launching the new business in a troubled industry taxed its cash flow.
  • The financial distress in the North American automotive industry caused raw material vendors to change their payment plans.
  • Blackhawk and other suppliers no longer granted customers 30-to 45-day payment terms, and required advance cash payment in some cases.
  • Bleeding approximately $500,000 per month, Blackhawk filed for Chapter 11 bankruptcy.

Solution

  • MorrisAnderson, initially hired to oversee cash management, was appointed CRO and Financial Adviser to the debtor during the bankruptcy and resultant 363 sale.
  • Four months later, with the assistance of an investment banker and the guidance of MorrisAnderson, Blackhawk was sold to a multi-billion-dollar, Tier 1 Canadian automotive supplier.

Results

  • The Company remained an active presence in a small town in Ohio and a viable competitor in the automotive industry.
  • 800 jobs were saved.
  • The new owner consolidated some manufacturing facilities and now has a $100 million company with a run-rate EBITDA of about 12%.
  • The Company’s senior debt will be repaid in its entirety.

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