Case Studies

Turnaround of Chemical Test Labs

J.S. Held Acquires Shechter & Everett to Expand Forensic Accounting Capabilities for Family Law Disputes in Florida

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Home·Turnaround of Chemical Test Labs

The Situation

Independent pharmaceutical and industrial chemical test laboratories. Annual revenues of $14 million. Debt $25 million. 75 total employees, including 14 Ph.D.s, 10 M.S.s, and 30 B.S.s. Serves mid-sized to large customers with “unsolvable” non-routine issues.

  • The company was placed into Federal Receivership by the senior lender due to loan defaults by the parent company and loan guarantees of the three operating companies.
  • Flat or declining sales at two of the three business units.
  • Lack of a comprehensive business strategy.
  • Low employee morale (fear, uncertainty, doubt) amongst all staff.
  • Inexperienced management team.
  • Trade creditors are reluctant or unwilling to extend credit.
  • Strategic customers are unsettled by the Receivership.

How We Advised

Our team acted as Receiver, Interim Management, Financial Advisor, and Investment Banker

  • We partnered with the company management to develop a consolidated business plan, creating a single unified company from the three operating units.
  • Developed, analyzed, and utilized a reliable cash management process to allow the company to operate from its own cash flows during the entire receivership.
  • Supported new growth strategy by investing in a new IT infrastructure, purchasing new equipment, and hiring additional staff
  • Managed investment banking process.
  • EBITDA improved 40% from $3.0 million in 2009 to $4.2 million in 2010.
  • Trailing twelve-month improvement in sales by 23%.
  • 53 NDAs signed, with nine letters of intent received from prospective bidders.
  • The company was sold for $23.0 million to a stalking-horse bidder approximately one year after the receivership began.
  • Senior lender improved recovery by $18.0 million (~260%) after restructuring fees.
  • All jobs were saved, and the company is poised for significant future growth.
  • We were honored with the Turnaround Management Association “Turnaround of the Year – Small Company” award for the results achieved on this engagement.

Related Practice Areas

> Receiverships 
Federal and state courts, creditors, and legal counsel choose our team to serve as Receiver of distressed businesses and real estate entities. We stabilize operations and cash flow, safeguard business assets, and pursue methods to maximize financial recovery. Our multidisciplinary team applies a wide breadth of restructuring and industry experience as Receiver to take control of companies facing financial, operational, and legal issues.

 

> Chief Restructuring Officer (CRO) and Interim Management Services 
Our experienced C-suite interim executives advise and support companies in financial distress, experiencing hypergrowth, or that are challenged by critical vacancies among senior leadership. Whether the leadership void results from operating challenges, a recent officer resignation, the need for added support during busy periods, or during an extended job search for the right permanent hire, our experienced executives provide immediate relief and value. 

 

> Investment Banking 
Through our affiliated broker-dealer, we provide access to middle-market investment banking services that deliver expertise in traditional, special situations, technology, and intellectual property (IP) engagements. These services include mergers and acquisitions (M&A), capital markets, and strategic advisory across a range of industries, circumstances, and transaction types. 

Key Contact

For additional information about the engagement or to learn more about our services, contact:

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