Tag Archives: Mergers & Acquisitions

1st Class Express Airport Parking

The Client

1st Class Express Airport Parking

This off-site airport parking operation, at the Indianapolis Airport, had overleveraged itself building the facilities.

The Challenge

Developed just two years prior, the lot was losing money with very few assets relative to its debt. Additionally, the land, well-suited for the old airport, was leased from the Indianapolis Airport Authority beyond the upcoming opening of a new terminal. This meant the lease had a commitment of 7 years beyond the useful life of the lot.

The Process

The company retained Equity Partners HG to run an global marketing campaign to generate interest in the company. Within six weeks of our retention, over 80 interested parties were performing diligence on the company.

The Solution

After receiving two offers for the company, Equity Partners was able to negotiate a 65% increase in price from the original offer from a competing firm.

Accubuilt, Inc.

The Client

Accubuilt, Inc.

An industry leading manufacturer of funeral vehicles in Ohio.

The Challenge

The Company, through its two brands, had been in operations for over 143 years and had recently controlled almost 70% of the funeral vehicle market. Due to the recession in 2008, more people were opting for lower cost cremations versus traditional burials which significantly impacted the demand for new vehicles. What was once a 1,800 vehicle per year industry became fewer than 1,200. With a sizeable debt load and declining revenues, the Company’s lender was considering shutting the business down and liquidating.

The Process

Equity Partners was retained to quickly determine if there was a viable going concern buyer for the Company. After identifying multiple interested groups and conducting site visits with several potential buyers, 4 offers were submitted .

The Solution

After several rounds of negotiations to improve the terms, Equity Partners, in consultation with Accubuilt and the secured lender, deemed the highest and best offer to be from Armbruster Stageway, an industry competitor. The secured creditor agreed to finance Armbruster and a closing was scheduled to coincide with a large industry trade show so both parties could announce the transaction together. The offer maintained operations in place and provided continued employment for over 90 people.

All Star Bleachers Manufacturing, Inc.

The Client

All Star Bleachers Manufacturing, Inc.

Tampa, Florida based manufacturer of aluminum bleachers, including those in NASCAR racetracks around the U.S.

The Challenge

The company got involved in two 60,000-seat projects simultaneously and was spread financially thin. Then, a design flaw caused the bonding surety to take over one of the two projects and despite All-Star having already spent considerable money, they were not paid. Without the ability to obtain bonding, sales plummeted.  The owner needed to sell the company, or find a partner with the ability to get bonded. In addition, he owned the land and building and needed a continued tenant in order to be able to make his mortgage payments.

The Process

Equity Partners conducted many visits with qualified prospective investors, both strategic and financial, and quickly generated four offers for the owner to consider.

The Solution

With multiple favorable offers to chose from, the owner selected The Vesper Group, because they offered to retain him as President and kept his family members employed (as well as offering paid non-competes).  Vesper also had the financial wherewithal and contacts to obtain a very high level of bonding.  The company continues operations in the facility owned by the shareholder, thereby providing him with continued lease payments.

Aluminum Extrusions, Inc.

The Client

Aluminum Extrusions, Inc.

An aluminum extrusion company in Mississippi that served a number of prominent window and door manufacturers.

The Challenge

The Company had lost a majority of its customers due to an extended shut down after a fire in the paint building and was forced to file Chapter 11. Ownership had been speaking with groups trying to facilitate a sale for months, but with DIP financing running out and no working capital, a shutdown and liquidation was looming.

The Process

Equity Partners was retained to run a quick, but extensive marketing process and had 71 groups execute confidentiality agreements. Multiple groups visited the facility and made offers for consideration as the stalking horse. A stalking horse offer was selected within 5 weeks of EP’s retention and an auction was scheduled less than 4 weeks later.

The Solution

Through a competitive bidding process, the final sale price increased 69% from the initial bid and closing occurred 10 days later. The entire process from retention to closing was completed within 10 weeks, recovery for the estate was maximized, and jobs were retained and operations continued in place.

Arlington Machine and Tool Company

The Client

Arlington Machine and Tool Company

A 52 year old family owned and operated precision machine shop in New Jersey.

The Challenge

The Company served an impressive list of customers, including Boeing, Lockheed Martin, and Sikorsky, but had been negatively impacted by a divestiture that took too long and cost too much to complete. A decline in sales and an inadvertent overstatement on the inventory report had caused the lender to limit funding.

The Process

Equity Partners was retained and quickly completed an exhaustive marketing process and identified multiple groups that were interested in purchasing the Company.

The Solution

Ultimately a superior offer from a private equity group that could close quickly was accepted. Additional challenges regarding substantial tax implications to the owners were mitigated and the sale transaction closed providing a great recovery for creditors and continued employment for ownership. Operations continued with a substantial new equity investment which allowed the company to grow.

ASDI, Inc.

The Company

ASDI, Inc.

This was a 24 year old Delaware based provider of materials management services for the pharmaceutical and biotechnology industries. The company filed Ch 11 after sustaining in excess of $3,700,000 in legal fees to defend itself in a legal proceeding which ultimately resulted in an unfavorable judgment from the court in the amount of $6,700,000.

The Challenge

The company identified a buyer for the company, however the secured creditor (judgment holder) was blocking the sale until a commercially reasonable process was undertaken to assure this was the maximum amount the market was willing to pay for the company. The buyer was only willing to allow 45 days for this process to take place or was pulling their offer.

The Process

Using an accelerated process, Equity Partners identified 27 interested prospects, conducted site visits with 5 separate groups, and received 2 offers in excess of the original offer.

The Solution

Within 45 days, Equity Partners conducted an auction that more than doubled the initial offer, with a sale closing to the original buyer.

Avkem International, LLC

The Company

Avkem International, LLC

A leading supplier of non-ferrous metal consumables and foundry chemical solutions
.

The Challenge

This Tennessee based company supplied chemical and other consumable products used in the non-ferrous metal production industry. The company had made several acquisitions that were poorly executed and wasted significant time and money in the process. In addition, they unwisely closed a facility that put the company at a logistical disadvantage that led to the loss of almost 50% of sales. With limited working capital, the secured lender had the company under forbearance and after using multiple turnaround consultants, they were out of patience.

The Process

Equity Partners quickly ran an extensive marketing process and determined that there were no buyers for the business as an entirety. Instead, the best way to maximize value was to split the company into two business units: flux and refractory. This required soliciting and negotiating bids from multiple groups for each unit.

The Solution

An offer from a competitor on the flux business was negotiated and accepted while a group of former employees/insiders purchased the assets of the refractory business. The closings occurred concurrently to avoid any interruption to customers and vendors were able to continue working with both companies, which were now properly capitalized.

Bara King Photographic

The Company

Bara King Photographic

This company was a Washington, DC area photo lab with significant government contracts.

The Challenge

The owner wanted to retain 100% of the stock of the company, but needed to raise new money.

The Process

Equity Partners was retained, and simultaneously sought joint venture partners for the business and buyers for the building.

The Solution

Equity Partners brokered an all cash sale/leaseback of the Debtor’s building, which allowed the Debtor to pay off its secured creditor and to continue operating in the same location.

Bartlett Management Services, Inc.

The Company

Bartlett Management Services, Inc.

Chain of 30 Kentucky Fried Chicken franchises located in IL, WI, and IN.

The Challenge

Costs involved with equipment leases, a management/advisory agreement, and real property leases, as well as the recession of 2008-2010, resulted in a decrease in revenue, and an inability to sustain positive cashflow, ultimately leading the Company to seek Chapter 11 bankruptcy protection.

The Process

Equity Partners was retained to seek an investor, joint venture partner or buyer for the operation and conducted an exhaustive marketing process that resulted in 70 groups conducting due diligence, with 9 of those groups engaging in significant discussions about the opportunity. In order to become a qualified bidder, interested groups were required to not only show financial wherewithal to purchase the operation, they also had to be qualified by KFC Corporate to be a franchisee. The Debtor’s professionals also had to negotiate revised building leases with 13 landlords that would be acceptable to a new buyer.

The Solution

Ultimately 3 groups submitting offers by the bid deadline, and 2 of those groups were qualified by KFC Corporate to participate in the auction. After numerous rounds of bidding, EYM Foods II, LLC was deemed the winning bidder and proceeded to close and operate the restaurants.

Bay Country Communications

The Company

Bay Country Communications

This Maryland-based cable television provider serving Dorchester County.

The Challenge

The company was forced into bankruptcy due to a technical default with the lender on a separate investment property. Stock in the company had been used as collateral on the loan and as a result of the default, Bay Country filed bankruptcy as a means to hold off the creditor from foreclosing on the company.

The Process

Equity Partners was retained to quickly market the company for a sale or to facilitate a restructuring of existing debt. Shortly after going to market, we generated interest in the opportunity from over 40 groups, including larger national and regional cable providers.

The Solution

Through discussions with interested groups, Equity Partners validated that the proceeds from a sale would likely never go beyond the debt of the company and therefore not flow through to the outside lender. With this information in hand, the owner negotiated a settlement with the lender for a fraction of the original debt and Bay Country was able to exit bankruptcy and resume business as usual.