MorrisAnderson

The Challenge

• 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 highly educated staff.
• Inexperienced management team.
• Trade creditors reluctant or unwilling to extend credit and strategic customers unsettled by Receivership.

The Solution

• MorrisAnderson partnered with Company management to develop a consolidated business plan creating one unified company out of the three operating units.
• Developed a reliable cash management process to operate from internal cash flows and re-invested in growth expenditures increasing overall enterprise value.
• Supported the new growth strategy by investing in a new IT infrastructure, purchasing new equipment and hiring additional staff.
• Managed the investment banking process including; marketing, management presentations, due diligence and final negotiations required for closing.

The 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 (from $5 million) after restructuring fees.
• All jobs were saved and company is poised for significant future growth.