Tag Archives: Success story

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.

Biodiesel of Mississippi

The Company

Biodiesel of Mississippi

A shutdown biodiesel refinery in Mississippi.  In Chapter 11 for 5 months when Equity Partners was retained.

The Challenge

The refinery was shut down and facing a conversion to Chapter 7.  There was no real documentation regarding prior production, there were significant challenges with the MS Dept. of Environmental Quality, and we could not demonstrate any current production capability.

The Process

Our retention prevented a conversion to a Chapter 7 liquidation and the court allowed us a short window to pursue going concern offers. While the debtor failed to demonstrate any real production capacity, Equity Partners still generated over 100 interested prospects.

The Solution

We quickly obtained a going concern offer that far exceeded any liquidation estimate.  The sale was approved, the business sold, and operations restarted.

Broadband Networks, Inc.

The Company

Broadband Networks, Inc.

Indiana-based provider of broadband access, focused on un-served and underserved small and rural markets in Indiana and Ohio.

The Challenge

A group of investors (Broadband Networks) had bought the predecessor’s assets through a Chapter 11 reorganization and operated for about a year. The legal costs related to the bankruptcy were much higher than anticipated and made it nearly impossible for the company to be profitable.

The Process

Equity Partners was retained to explore strategic options for the company and quickly completed a 45 day marketing process. There was significant going concern interest in the company and a stalking horse bidder was selected in preparation of an auction among qualified bidders.

The Solution

After 25 rounds of competitive bidding, an offer for the entire network was selected and, after a very short transition period, closing occurred with minimal interruption to operations. Shareholders received a significant return on their investment as well as a 3 year earn out from the ongoing business.

BTH Quitman Hickory LLC

The Company

BTH Quitman Hickory LLC

Mississippi based white wood and torrefied pellet mill. Since coming online in 2009, the facilty produced 75,000 tons of torrefied material and was the first commercial scale torrefaction facility located in the US.

The Challenge

While torrefied wood pellets are an immediate and practical replacement for coal, white wood pellets are a more common replacement in coal fired operations. Because of this, in 2014, management decided to focus on producing white wood pellets and to sell into that market while continuing to develop the torrefied product and market. Due to oversupply, the price per ton for white wood pellets continued to decline forcing operation to close in March of 2016 and the file for Chapter 11 bankruptcy protection.

The Process

Equity Partners was retained and conducted an exhaustive marketing process. Through our process, over 30 companies signed confidentiality agreements and considered investing in or acquiring the facility.

The Solution

Following in-depth negotiations on behalf of the seller, Equity Partners HG was able to put together a transaction with Mohegan Renewable Energy that practically doubled their initial offer. We also and worked with five creditors groups establishing a distribution of funds agreeable to all. A sale to Mohegan Renewable Energy was approved by the court and closed shortly after.

C&D Fruit and Vegetable Co.

The Company

C&D Fruit and Vegetable Co.

Grower, packer, and shipper of fresh fruits and vegetables located in Bradenton, FL.

The Challenge

C&D discovered that its then bookkeeper had embezzled over $1,500,000. The bookkeeper was terminated, charged, and prosecuted, but the magnitude of this loss was crippling. In order to meet upcoming planting schedules, the company had to borrow a substantial amount of money which further impacted cash flow. Ultimately after an unsuccessful attempt to sell the company, ownership decided to file for Chapter 11 protection.

The Process

The secured creditor was prepared to liquidate the assets, but agreed to give Equity Partners 60 days to market the company and solicit bids. An extensive process was conducted leading to multiple offers and culminating with an auction among qualified bidders.

The Solution

Through competition the total bid value increased over 15% and the land and equipment assets were sold to separate bidders, far exceeding liquidation estimates. The bankruptcy court approved the sale and closing occurred immediately afterwards, maximizing recovery for the estate.