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Financial Assessment of Wallpaper & Décor Distributor

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Home·Financial Assessment of Wallpaper & Décor Distributor

The Situation

$90 million manufacturer and distributor of wallpaper, wallcoverings, and interior décor. $35 million debt.

  • The company's sales declined by more than 10% over two years due to economic weakness in several key foreign markets, including Russia and Brazil, as well as the waning popularity of licensed peel-and-stick wallcovering products related to the “Frozen” movie franchise.
  • Organic residential wallpaper demand has been steadily declining for decades, although some signs of increased adoption in the United States were evident in niche markets.
  • York was purchased by private equity in a leveraged buyout at the height of its revenues; sales declines led to EBITDA that was half of that at the time of acquisition, and widespread covenant defaults.
  • The company was pursuing a risky turnaround strategy, focusing on new products for interior décor.
  • The senior lender was questioning whether the business was viable and whether a restructuring or a liquidation should be pursued.

How We Advised

  • A comprehensive assessment of the financial performance of the company relative to the capital structure and the likelihood of achieving the turnaround projections.
  • Evaluate the new company president and overall management team and their ability to execute the proposed turnaround strategy.
  • Recommend potential restructuring concepts and help broker an agreement between the lenders and the company to provide a stable path forward.
  • The lender provided covenant waivers and amendments to enable the company to pursue its strategy without requiring additional capital investment from the private equity owner.

Key Contact

Dan F. Dooley, CTP 
Senior Managing Director 
Strategic Advisory Practice 
+1 603 660 8952 
[email protected] 

Related Practice Areas

> Business / Operational Assessment 
Most consulting firms approach a business assessment from a purely financial perspective — our assessments provide a 360° view of a business, addressing growth drivers, profitability, and uses of capital. Along with detailed financial performance reviews and cash flow forecasting, our comprehensive Business / Operational Assessment identifies the various challenges clients encounter throughout their operations. 

 

> Turnaround and Restructuring Services 
Navigating the many challenges confronting a company in transition requires an operationally focused approach that looks beyond the balance sheet to minimize further degradation and build a path to sustainable growth. Drawing upon decades of experience in the turnaround space, we help companies in transition identify practical strategies to improve profitability and liquidity for immediate relief, while concurrently developing and executing a comprehensive turnaround plan for long-term, sustainable value creation. 

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