Improving Value So Shareholders Can Exit With 4x Value

Dixon Ticonderoga

Orlando, Florida

Challenge

Writing instrument manufacturer (No.2 pencils). One of the oldest public companies in the US with roots back to 1795. $100 million in annual sales. $6.5 million EBITDA. $45 million bank debt.


  • Historical educational market in decline as big box Retailers moving into educational segment and education budget cuts.
  • Plants operating at 50% of capacity.
  • Inventory and AR levels excessive.
  • Stock market cap at $4.5 million.
  • Covenant defaults occurred and senior lenders blocked sub-debt payments.

Solution

  • MorrisAnderson engaged to do assessment and develop Turnaround Plan.
  • Implemented inventory and SKU reduction plan to improve liquidity and profitability.
  • Implemented over $1 million of layoffs and cost reductions.
  • Implemented purchasing controls and vendor management program.
  • Restarted stalled plant relocation from Ohio to Mexico.
  • Prepared to refinance company with planned sale 1 year later.

Results

  • EBITDA improved by $3 million to $9.5 million run rate.
  • Company was refinanced as a bridge to eventual sale.
  • Company was sold with Shareholders receiving $18 million; over $13.5 million more than a likely overhauled market capitalization when MorrisAnderson arrived.