MACHINE PRODUCTS-HVAC MANUFACTURING

Privately held Metal Fabricator of Heat Exchangers serving the petrochemical, plastics and nuclear industries.

THE SITUATION

This $ 4 Million, 50 year old family owned business had experienced declining bookings and losses for four years. Factory throughput had slowed from 6 to 15 weeks. Three of the four founders had retired from the business. The remaining brother acknowledged that he had lost effective control over operations. Bank lines were at their limit and the company was out of cash.

ACTION

Engaged at the urging of company's independent accounting firm to determine if the business could be saved. Performed intensive viability analysis while simultaneously assuming control of cash, collections and negotiations with suppliers. Concluded that if certain key events did not materialize within three months, the company should be liquidated.

Prepared both Recovery and Liquidation Plans; revised management's misdirected strategy that was pricing the company out of the market; worked directly with factory leadmen to increase throughput; directed overtures to strategic buyers.

RESULTS

A strategic buyer was located within the three month window and a firm offer was placed on the table; over a six month period quote activity tripled; factory throughput increased; bookings increased 25%.

The company was sold for a price that enabled all creditors to be paid while preserving, intact, the net worth of the owners.

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