Financial Advisor to $200MM Real Estate Company
Profitability & Cash Flow Analysis, Due Diligence, Strategic Plan
The Bottom Line:
Stapleton Group determined the viability of a 75-year old family-owned business for its lender after the company’s clients suffered a swift decline. We determined the company could not survive until its clients recovered, but would have value to a strategic buyer. The company’s owners agreed with our conclusion and the business was sold, generating sufficient proceeds to pay the bank in full as well as provide an equity return to the owners.
The Business Issue:
The company’s customer-base was hit with severe stagnation and management did not pivot quickly enough to overcome the effects of declining revenues.
Genesis of Stapleton’s Engagement:
When the company defaulted on its line of credit and failed to provide a recovery plan, the bank engaged Stapleton Group for help.
Obstacles and Stapleton’s Solutions:
- The company defaulted on its line of credit, its lender needed information to determine an action plan.
- Stapleton identified the key internal and external business drivers.
- Stapleton built a comprehensive financial model demonstrating that the company could not survive until its clients recovered, but would have value to a strategic buyer.
- The company’s owners and CFO were inexperienced operating a business with declining revenues and were reluctant to let go of long-tenured employees.
- Stapleton earned the owners’ trust during due diligence.
- Stapleton evaluated long term strategies for the company.
- The bank wanted its capital returned.
- The business owners agreed to a sale and retained an investment bank on Stapleton’s recommendation.
- The bank was repaid in full and the owners received an equity return.