Here is a Case Study of a transaction that one of our Private Equity Investors completed. Periodically, I will send you an interesting case study -- not more than every couple of weeks. If you don't want to receive them, you can "unsubscribe" at the bottom of this message.
As a bonus, I am highlighting one of the Strategic Equity Investors we represent. They will do a transaction similar to this one.
If you have any questions or comments, please send them to me.
Sometimes doing a transaction is about more than just money. In fact, in my experience, money is key, but not at the top of the list. Here's a corporate parent that had given up on a wholly owned division. This operation just wasn't part of their core business anymore. Read about how the business was rescued.
Enjoy
GAF Corporation owned a graphic arts division that sold pre-press supplies to the printing and publishing industry. For too long, they sold products at a loss. The plant was old. The technologies employed were fast becoming obsolete. Buyers for the business walked away fast. Management was told that the company would be liquidated.
... produced pre-press supplies. Digital technology threatened the traditional products the company made. The division had been unprofitable for a long period of time. Planning and accountability systems were inappropriate for a company this size. Competitors, becoming Vultures, were deciding they would rather steal the $75 Million Dollars in business after the dissolution that looked imminent, rather than buy the division from GAF. Management didn't have the resources to buy the Company themselves.
But all was not lost. A Strategic Equity Investor stepped up to the plate at the last minute to buy the division. They retained all but one of the management team and allowed them to co-invest in equity on an equivalent basis.
The first steps were to manage to cash. The Investor taught the management team to become frugal, that the business needed to be self sustaining, and that cash was paramount, not profits. One of the first lessons of Corporate Renewal. Then, they installed planning and accountability systems. The company became profitable in the first quarter of operations.
But, more than profitability, the management team was finally able to reinvest into the future of the business. They developed new products. They carefully upgraded facilities. They added territories and the sales force to manage them. All with the cash flow generated by the on-going business.
Revenues doubled in four years. Profits increased to more than $30 Million in earnings before interest and taxes. The Company was taken public. Business Week named them the number one hot growth company as measured by net earnings. Four of the original managers walked away with several millions each.
A company was almost relegated to the Corporate garbage dump. A Strategic Equity Investor saw an opportunity to salvage the company and make some money at the same time. The turnaround was simple with the right leadership. The results showed and the management team did very well for themselves. A few years later, International Paper acquired the company for stock.
Private Equity groups have been pigeon-holed as financial buyers and low ball buyers for a long time. Some of their reputation is deserved. But, there are a select few Private Equity Investors that belong in a whole different investment league. To find out why most Investment Bankers think Private Equity Investors are Second Class Citizens and why they are wrong
get a white paper here ...
Andlinger has been a Strategic Equity Investor for a long time. The firm was established in the mid 70's. Soon to be over 30 years of successful investing and partnering with management and owners. With offices in New York, Brussels and Vero Beach, Andlinger has a strong cross-border presence.
The ability to add hands-on operating expertise and strategic perspective, to create enduring value in a business, is what distinguishes Andlinger & Company. And, growth is the objective. Andlinger endeavors to build businesses; help them grow, expand and improve.
Mark Callaghan, a Managing Director of Andlinger, said recently "We invest our own funds in each new investment. While we always encourage internal growth, we believe that success in many industries invariably demands external growth. This is accomplished most often through follow-on acquisitions of strategic missing pieces. ".
And he followed up with "In each business we invest in, we want to make sure that management is enthusiastic and knows how to make common sense decisions. The principals of Andlinger become very supportive partners and act as catalysts for the success of the organization."
Would you like an introduction to Andlinger? I will be happy to provide it. Just send us an e-mail ...
For more information on Andlinger, visit their website...
We are specialists. We match privately held companies with the right equity source. We never charge a seller a fee. Working with Strategic Equity Buyers is our specialty.
To discuss which Private Equity Group will meet your current needs, let us know here ...
has partnered with a top notch operations consulting firm:
Allomet specializes in helping equity investors, owners, lenders and other stakeholders assess operational problems, understand how to solve them and help oversee implementation.
Would you like to determine if an assessment of margin enhancement, operational strategy, or crisis evaluation is right for you? For a thorough preliminary consultation let us know ...
has partnered with a turnaround consulting firm:
Business CPR specializes in Manufacturing or Service companies that have revenue between $10 Million and $100 Million.
Would you like more information on specific techniques to managing a company with problems?
Get the
7 Best secrets of managing a Corporate Renewal from Dr. Kash.
