Interim Management Turnaround and Successful 363 Sale
60M
Annual Sales
25M
in Debt
Victor Plastics, North Liberty Iowa
Challenge
Injection molder primarily for appliance industry. $60 million sales. $25 million debt.
- When Maytag was purchased by Whirlpool Victor, a major supplier to Maytag, lost 40% of its annual revenue.
- Vendors were surcharging current deliveries to pay down past due amounts.
- $25 million of senior and junior debt was at risk and the lenders wanted to liquidate.
- $2 million was needed to consolidate plants and get the company viable at a lower run rate of sales.
Solution
- MorrisAnderson was brought in to pursue a 12-week liquidation plan within a Chapter 11.
- MorrisAnderson believed a going concern sale would generate more value than a liquidation.
- Concurrently, MorrisAnderson also marketed the company on a dual track section §363 process.
- The money losing Mississippi location was closed and customers were surcharged to raise margins.
Results
- Because of the changes implemented, the Company became cash-flow positive.
- Eleven prospective buyers emerged.
- In a four-month period as part of a liquidation process, the Company was sold at 5.5 times projected EBITDA.
