Growth financing
Company profile
- Leading recycling company based in Austria and Hungary, specialists in manufacturing secondary raw materials (including PET, glass and aluminium)
- In 2014, the company achieved a turnover of around EUR 15 million while having approx. 400 employees
- The company originated from 16 different companies and five production sites
Initial situation
- The founder had set up the company with his own funds and various bank financing options and, over the years, established numerous new companies, of which some were in association with partner companies
- As a result of its growth, the group of companies had no clear organisational or managerial structures in place and had completely exhausted its lines of credit with the bank
- The company had enormous growth potential with a turnover of up to EUR 30 million in the coming years; however, it also had considerable capital requirements for its own working capital and for future investments in production facilities
Solution and approach
- Development of a suitable, investor-oriented, target group structure and its legal implementation by merging individual companies
- Creation of a consolidated business plan including potential capital requirements in conjunction with a well-known auditing firm as a basis for approaching investors
- Approaching suitable investors based on the business plan and an information memorandum
- Communication with investors regarding an interim deviation in current trading
Result
- Successful acquisition of equity capital as part of a minority shareholding by a financial investor in spite of the company’s intermittent underperformance
- Improved balance sheet structure as a result of injecting equity capital as a basis for taking out additional outside capital
- Long-term improvement in the company’s internal reporting, along with faster identification of monthly deviations in results, to lay the foundations for more efficient corporate management
Refinancing
Company profile
- Leading Austrian dealer of car accessories, bicycles and other mobility products
- Branch network with 115 sites and 900 employees
- Turnover of around EUR 130 million with below-average profitability in a difficult economic environment
Initial situation
- After almost 10 years of ownership by private equity investors and a failed attempt to expand into Eastern Europe, the company was in an unreasonably high amount of debt
- As part of its takeover by a new experienced management team, the financing banks agreed to a significant haircut in debt in return for payment in full of all bank liabilities to contribute towards the restructuring process
- Shortly after the project began, the company was already able to demonstrate sustainable restructuring success and increased profitability
Solution and approach
- Preparation of a business plan to analyse its ability to make principal payments, and the development of adequate financing structures
- Establishment of comprehensive company documentation to address investors
- Approaching subordinate, outside and equity capital investors
- Provision of support for financial/tax, legal and commercial due diligence matters, in addition to contractual negotiations with the new financing partners
- Multiple adaptations to the business plan throughout the process
Result
- As part of the process, the company had to report several drops in earnings as a result of its unfavourable macroeconomic situation and the delays in its restructuring measures
- The financing that had initially been negotiated with subordinate and outside investors could not be implemented
- In a second step, the refinancing measures were successfully implemented together with new equity investors. These also provided a shareholder loan, as well as further concessions from the financing banks, consequently protecting the company against imminent insolvency
Restructuring
Company profile
- Specialized plant engineering and construction company for food & beverage, pharmaceutical and chemical industry
- Mainly international business, CIS-countries as major sales market
- App. EUR 10 Mio. sales in 2014; 2015 and 16 decline of sales to EUR 8 Mio. and negative annual results of app. EUR 2 Mio. caused by sanctions against Russia
- Operational problems along the entire value creation process made Âľ of all projects loss-making
Initial situation
- Company is owner led in 3rd generation
- Good market access to Russian and CIS-countries was established in recent years and represented the second biggest market
- 2015 these markets collapsed almost completely and 25% of sales vanished unexpectedly
- Company´s cost structure remained unchanged
- Operational problems were not solved actively
- The result was a shortage in liquidity of app. EUR 3 Mio. in 2017; the entire equity was consumed
Solution and approach
- Development of a business plan for the analysis of the capital service ability as well as preparation of a detailed liquidity planning
- Development of a compelling corporate documentation for the approach of investors
- Approach of specialized investors for shortterm liquidity and of equity investors for balance sheet restructuring
- Support of audit processes and of contracting with the new investors
- Negotiation with banks regarding the maintenance of existing credit lines
Result
- The company was almost insolvent and the 2 firm´s banks were not willing to continue support without additional equity
- The required short term funds could be provided for 12 months within 4 weeks despite B- rating and with liability exclusion for the shareholder
- Furhter EUR 2,2 Mio. were provided by an equity investor for 75% of company shares.
- The owner remains shareholder as well as co-managing director and was vastly imdenified from historic liabilities
Internal financing
Company profile
- International textile group
- Complete value chain from fibre production right through to sales at its own point of sale
- Turnover of around EUR 140 million and EUR 4 million EBIT in 2015
- Liquidity bottleneck in 2016 due to a working capital peak over the course of the year and agreements to repay its loan to the affiliated banks
Initial situation
- This traditional company primarily manufactures lingerie and sells its own products on an international scale.
- Existing lines of credit with the affiliated banks were already stretched to the limit and repayment plans had to be put into place
- In 2016, the Group was able to record sales growth, which resulted in increased working capital requirements
- The process of restructuring, an acquisition resulted in additional, unplanned financing requirements
- This created a liquidity bottleneck of at least EUR 2.5 million within the two months that followed
Solution and approach
- Development of a long-term liquidity plan
- Analysis of the free assets in the working capital
- Development of an individual recovery solution for all debts
- Approaching specialised investors and selecting the most advantageous offer
- Support throughout the audit process and creation of a contract with the new investor
- Support from technical implementation right through to business operations
Result
- The company gained access to additional liquidity options amounting to EUR 4 million within eight weeks
- This covered the increase in working capital requirements
- Existing bank liabilities were reduced by a further EUR 3 million and the net debt was also lowered
- Financing costs were significantly reduced
- The company could meet the agreed repayments of bank loans and thereby increase its credit rating
- A positive side effect came in the form of a reduction in the balance of the debts that were also recovered
Corporate succession planning
Company profile
- Leading German manufacturer of high-performance gearboxes
- Supplier to all key German OEMs and well-known race teams
- Turnover of around EUR 19 million and EUR 4 million EBITDA in 2013
- Extremely successful company with excellent potential for growth
Initial situation
- Company not financed in the most appropriate way
- As part of the company’s regular refinancing programme, its affiliated bank expressed the desire to implement a succession plan
- A successor could not be found within the owner’s family
Solution and approach
- Discussions regarding potential succession options held with the owner
- Total vs partial sale
- Financing options for the transaction
- Potential buyers trialled on an anonymous basis
- Parallel identification of an external manager as an entrepreneurial successor
- Addressing and identification of potential investors to implement a step-by-step business divestiture
Result
- A medium-sized investment company was identified, which initially wanted a minority stake but ultimately decided to take over the whole company
- As a manager was also found as an entrepreneurial successor, the company owner made the decision to sell the company immediately and in its entirety
- Three years later, company turnover has grown to over EUR 25 million
- Furthermore, an add-on acquisition meant the value-added chain could be expanded further, while the company’s technological leadership in this sector has continued to develop
Company Sale
Company profile
- Leading brand as German / Scandinavian manufacturer of premium loudspeakers for the consumer and professional market
- Turnover of around EUR 50 million and EUR 10 million EBITDA
- This company’s products have been setting the benchmark in the audio sector for years
Initial situation
- The company develops, manufactures and sells premium-quality speakers and audio systems for private and professional use
- The founder had already sold off the majority of the company to a domestic industry holding company a few years ago
- As a result of the excellent opportunities for growth in Asia, the company received a takeover bid from a Chinese manufacturer of audio products
Solution and approach
- Creation of a business plan and comprehensive company documentation to provide the potential buyer with an insight into the company
- Preparation of the company and the management for the buyer’s due diligence process
- Provision of support for owners and management during the sales and negotiation process
Result
- The company was successfully sold to the Chinese strategic buyer to the satisfaction of the shareholders
- The interests of the existing management and employees were safeguarded
- The company continues to be extremely successful and independent while exploiting new opportunities being offered by the additional access to the Chinese market
Merger & Acquisitions
Services
- Support with due diligence
- Checking and validation of corporate planning and valuation
- Creation of integrated financial plans and purchase proposals
- Structuring of acquisition finance
- Support with contractual negotiations
Recapitalization
Company profile
- Internationaly operating textil company
- Specialist for production of elastic to super-elastic textile fibres for applications in textil and lingerie, medical and technical textiles
- Two production locations in Germany
- Appr. EUR 11 Mio. in sales and EUR -0,4 Mio. EBITDA in 2018
- Shortage of liquidity and acounting insolvency caused by discontinuation of a major customer in 2016 and discontinuation of a financing partner in 2018
Initial situation
- The company with 136 years in tradition is production elastic to super-elastic textile fibre.
- Due to financial legacy resulting from an engagement in China insolvency was filed in 2009, which could be concluded successfully in 2013.
- An accounting insolvency with negative equity of EUR –3,2 Mio. was healed by structural adoptions and equity contributions of the owner.
- The short term exit of a financing partner caused a financial gap of EUR 1 Mio.
Solution and approach
- Development of an actual liquidity planning
- Analisys of unpledged assets in current and non-current assets
- Development of an individual solution for utilization of all receivables and mobile non-current assets
- Approach of specialized investors and selection of most favourable offers
- Accompany of due diligence process and legal documentation with the new capital partners
- Accompany of technical implementation of solution until operative start
Result
- Two new capital partners were attracted.
- The company received EUR 2 Mio. in additional liquidity within eight weeks.
- The planned growth is financed dynamically based on company´s receivables in future.
- Group debts were repatriated.
- A positive side effect was the balance sheet contraction by the utilization of mobile non-current assets of the company.
- The realization of hidden reserves caused a positive effect on the net result.