Turnaround Leads to Sale at 4 Times Expected Value

Business ServicesFiduciary ServicesLitigation SupportPerformance ImprovementTurnarounds & Restructuring

14M

Annual Sales

25M

in Debt

Chemir Analytics, Maryland Heights Missouri

Challenge

Independent pharmaceutical and industrial chemical test laboratories. Annual revenues of $14 million. Debt $25 million. 75 total employees including 14 Ph.D.’s, 10 M.S. and 30 B.S. degrees. Serves mid-sized to large customers with “unsolvable” non-routine issues.

  • Company placed into Federal Receivership by senior lender due to loan defaults by parent company and loan guarantees of the three operating companies.
  • Flat or declining sales at two of the three business units.
  • Lack of a comprehensive business strategy.
  • Low employee morale (fear, uncertainty, doubt) amongst all staff.
  • Inexperienced management team.
  • Trade creditors reluctant or unwilling to extend credit.
  • Strategic customers unsettled by Receivership.

Solution

  • MorrisAnderson acted as Receiver, Interim Management, Financial Advisor and Investment Banker
  • MorrisAnderson partnered with Company management to develop a consolidate business plan creating one unified company out of the three operating units.
  • Developed, analyzed and utilized a reliable cash management process to allow company to operate from its own cash flows during the entire receivership.
  • Supported new growth strategy by investing in a new IT infrastructure, purchasing new equipment and hiring additional staff
  • Managed investment banking process.

Results

  • EBITDA improved 40% from $3.0 million in 2009 to $4.2 million in 2010.
  • Trailing twelve-month improvement of sales by 23%.
  • 53 NDAs signed, with nine letters of intent received from prospective bidders.
  • Company sold for $23.0 million to stalking horse bidder approximately one-year after receivership process began.
  • Senior lender improved recovery by $18.0 million (~260%) after restructuring fees.
  • All jobs were saved and company is poised for significant future growth.
  • MorrisAnderson was honored with the Turnaround Management Association “Turnaround of the Year – Small Company” award for the results achieved on this engagement.

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