Turnaround Leads to Sale at 4 Times Expected Value
Chemir Analytics, Maryland Heights Missouri
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.
- 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.
- 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.