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Restructuring
Case Study 1
A micro cap public company acquired a subsidiary of large multinational corporation, thereby almost doubling the size of the acquirer and creating a need to integrate the two businesses into a new corporate structure.
Both businesses of the acquirer were using different and older versions of the operating and accounting software. These antiquated systems slowed and complicated the monthly and quarterly closing process.
We studied the two software packages and assessed updated versions of both systems. We worked with the acquirer's internal staff to understand their needs and evaluated their responses. We negotiated with both vendors to obtain the lowest possible price and the shortest implementation time. Based on our review of the staff responses, the cost, system functionality and the timeline to implementation, we recommended to the senior management which package to select.
Based on our review of the company's reporting requirements and nature of the businesses, we concluded that certain operational realignment would improve the company's cash flow. Working with senior management, we recommended a restructuring of the company into two distinct new business units, each unit with a President reporting to the Company's CEO and a Controller reporting to the CFO. This allowed our client to improve its focus on the two distinctively different market places while also enhancing its internal controls.
The implementation of the new software package was successful, and the aggressive time frame that the corporation desired was met. The cost of acquisition and implementation of the new system was lower than budget due to careful management of the time that vendor consultants were utilized. The cost savings were then used to purchase additional modules of the software that were not included in the original scope. The establishing of a single, companywide general ledger improved the monthly and quarterly reporting cycle.
The company set up two new business units. This allowed for more directed marketing, operating efficiencies, improved internal and external reporting. Within each new operating division, the pre-existing business units continue to operate, but the reporting systems and internal & external communications became more simplified and efficient.
Case Study 2
A private company had been incurring substantial operating losses in light of a significant down turn in the capital intensive segment of the market it served. The company's products were high end, leading edge technology instruments.
The company's technology, with proper repositioning and broadening of its distribution channels, could access new industry sector segments in the international markets.
We studied the market potential and competitive landscape of the certain new end markets and made recommendations on which niches of the market under consideration could result in the higher value creation for the client.
The private company was able to develop new end market customers and diversify its revenue base to combat a cyclical down turn. Within two years, the client's end markets served rebounded from the cyclical down turn, and the client's business valuation was enhanced with a stronger and more diversified revenue stream.
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