MorrisAnderson Bridging Company to a Sale Transaction

Aerospace & DefenseTurnarounds & Restructuring

25M

Annual Sales

7M

in Debt

DEI Services Corp, Orlando Florida

Challenge

Manufacturer of simulation and training devices for the military. $25 million in annual revenue. Substantial growth with a $35 million backlog, and $85 million in pipeline. Over advance of $2.3 million on $7 million of debt. 175 employees. Minority-owned defense contractor. 

  • Significant growth from $0 to $25 million of annual revenue in six (6) years.
  • Sales network produced significant backlog of $35 million.
  • Poor financial controls created a $2.3 million over advance situation and no funds for payroll.
  • The company faced liquidation and a potential loss to the bank of up to $7 million.

Solution

  • MorrisAnderson was brought in by the bank group to evaluate the viability of the business.
  • MorrisAnderson worked with management to develop a business plan to convince the bank to fund an additional $400K for payroll.
  • Secured by an Income Tax refund, an outside investor put in $1 million with the bank’s consent, to fund working capital.

Result

  • A forbearance agreement put tight financial controls on the use of cash and required that the company seek additional capital with MorrisAnderson helping to guide the process.
  • In July 2010 the company was sold to a strategic investor and the bank was paid back 100% of all outstanding amounts.