Manufacturer Consolidation to Avoid Bankruptcy

Background

When bankruptcy comes into view, difficult decisions aren’t far off. Finding the right wisdom and setting the right priorities in such a critical time is of utmost importance. The client in this success story was a rollup of a private equity-owned, multimillion-dollar manufacturer with headquarters in Europe. The US and Mexican operations accounted for approximately 40% of the total revenues of the combined companies.

Situation

The company wanted to avoid bankruptcy and brought in an E.L.I. Partner for assistance. The E.L.I. Partner would assist in the development and implementation of a restructuring program.

Solution

The E.L.I. Partner worked alongside the new president of the company and another senior executive. Together, they developed a restructuring plan that allowed the company to avoid bankruptcy. The plan included shutting down one of two unionized manufacturing plants and consolidating all operations into the surviving plant. Before announcing the plant closure, the E.L.I. Partner also uncovered and corrected a major security flaw in the setup of the corporate ERP system, which could have had devastating impact on all US and European operations.

Results

The restructuring plan was implemented and US operations were successfully consolidated into a single manufacturing plant. Profits and cash flows improved and the company began to grow once again. Several years later, the company was successfully sold to a different private equity backed company.