Case Study: $950MM Print Services Company
Situation: Business in need of capital structure adjustment as debt service for 2009 exceeds EBITDA projection by $20MM. Overall debt level near 7X EBITDA.
- Company seeking alternatives to fix capital structure (SPAC, 144A, ABL)
- SPAC merger agreement signed – fell apart when financial markets collapsed in fall of 2008
- Failure of alternative financing created a need for a restructuring of operations to generate cash
Solutions:
- Financing Alternatives
- Modeling of projections
- Partner with SPAC to develop road show presentation
- Develop and populate data room
- Acquisitions required to make SPAC viable
- Identify and bring to LOI 3 targets
- Complete due diligence on targets and position to close
- Develop integration plan
- Restructuring/Transformation
- Kevin Lombardo inserted as Transformation Officer
- Led management in development of plan
- Installed management and reporting process
- Coached executives on operating in uncertain times
Results:
- SPAC merger agreement signed in strong financial market
- One acquisition brought to closure, other two abandoned when markets collapsed
- Developed restructuring plan and implemented quick hits
- Savings identified in 60-day period – $23MM EBITDA and $33MM in cash
- $11MM implemented through Feb. 2009
- Recommended divesture of non-core assets to raise $70MM in cash
- Installed new management in key areas of sales, IT and operations
- Execution of plan resulted in new amendment being signed in April 2009