Engaged as financial advisor. $60 million Commercial aviation component manufacturer (highly engineered aluminum and magnesium castings). $1 million – 2 million EBITDA barely covered debt service on $15 million of debt. 70-year old company, third generation family-owned; 1 plant, 250 employees
- Aviation industry collapsed post 9/11.
- The Company misreported AR on its borrowing base, the cash flow barely supported debt service; six months after a refinancing the company was shut down due to uncertainty of outcome.
- Information was on two systems due to an incomplete system implementation.
- Finance and accounting departments were weak and relatively new to the company.
- The OLV of assets suggested a loss for the lenders; key suppliers funded a DIP loan because the parts were critical.
- Working with management MorrisAnderson crafted a business plan that downsized revenue and improved pro forma EBITDA to $5.5
- MorrisAnderson marketed the Company as part of a section 363 sale process.
- The successful marketing of the company produced seven purchase LOIs and four refinance LOIs.
- The stalking horse bid of $30 million provided $5 million to equity; equity received $21 million of value from the final bid at auction of $46
- All liabilities, including the bank debt, were paid in full.