Industrial Services Company
A private equity backed middle market company was facing severe liquidity pressures and strained relationships across its capital structure. The company was being sustained by cash infusions from its private equity owners and incumbent leadership had been unable to develop a plan to address either the company’s untenable capital structure or its unacceptable level of operating performance. Growth had stalled, losses were mounting, employee morale was down, rumors were circulating throughout the industry, customers were pulling back, and suppliers were getting anxious.
The company needed a path to both a rationalized capital structure (restructuring) and an appropriate level of profitability (turnaround).
Abraxas Group was brought in to assess the situation, present an actionable restructuring and turnaround plan, and provide transformational leadership to drive the change.
Scope of Opportunity. Less than two weeks from the date of engagement, Abraxas Group presented a comprehensive restructuring and turnaround plan featuring a capital efficient and actionable path for returning the company to profitability. This plan provided the company’s subordinated lender with sufficient insight into the compelling value creation opportunities left untapped inside the business to support it in a restructuring.
A Fresh Start. An out-of-court restructuring was completed five weeks from the date of initial engagement, successfully right-sizing the company’s capital structure.
Rebuilding. Serving in the role of Interim CFO, Abraxas Group successfully reengineered the cost structure of the company, implemented cash management best practices featuring a rolling 13-week cash flow forecast, and the Finance and Accounting team had been recast as a partner to other departments in the company with the level of analysis and reporting significantly enhanced.
Transition. Previously frayed vendor relationships had been rebuilt. Existing customers were reengaging. Prospective customers had shed their skepticism. A full-time CFO was recruited and onboarded, and Abraxas Group, having completed another successful transformational leadership engagement, moved on to the next challenge.