Turnaround Allows Lender to Amend Loan


Annual Sales


in Debt

ETX, Alma Michigan


Automotive aftermarket transmissions and torque converters. $94 million. $31 million debt. Private Equity ownership.

  • Contracts lost due to lack of focus on sales in traditionally stable businesses led to systemic underperformance on bottom line.
  • Management could not cut cost fast enough to maintain liquidity.
  • Company modestly leveraged, but working capital was scarce in an inventory intense business.
  • Three divisions were draining cash from one good division.


  • MorrisAnderson engaged by Private Equity firm to assess the viability of the business and determine options to create value.
  • MorrisAnderson developed a multi-stage process to overhaul the company:
  • Sell off unprofitable transmission rebuilding facility.
  • Consolidate transmission facility into the contract manufacturing facility where there was excess space.
  • Make overhead cuts and consolidate Texas location.
  • Reduce unprofitable retail locations for the vertically integrated torque converter division.


  • Company realized $3.2 million in cost cuts.
  • Working capital was improved by $5 million through the sale of the unprofitable division.
  • Private Equity sponsor contributed $1 million to satisfy lender request.
  • Lender renewed its relationship with the restructured company.