Case Studies

Selling a Distressed Auto Supplier in a Contentious Bankruptcy

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Home·Selling a Distressed Auto Supplier in a Contentious Bankruptcy

The Situation

Automotive Plastic Injection Molder. $170 million in annual revenues. $40 million debt. Tier 1 supplier to GM. Tier 2 supplier to International Automotive Components. Plants in the cities of Salem and Mason in Ohio, and a technology center in Troy, Michigan.

  • The Company acquired approximately $40 million in transfer business when other automotive suppliers failed, but launching the new business in a troubled industry taxed its cash flow.
  • The financial distress in the North American automotive industry prompted raw material vendors to revise their payment terms.
  • Blackhawk and other suppliers no longer granted customers 30-to 45-day payment terms and, in some cases, required advance cash payment.
  • Bleeding approximately $500,000 per month, Blackhawk filed for Chapter 11 bankruptcy.

How We Advised

Our team, initially hired to oversee cash management, was appointed as CRO and Financial Adviser to the debtor during the bankruptcy and the resulting 363 sale.

  • Four months later, with the assistance of an investment banker and our guidance, Blackhawk was sold to a multi-billion-dollar, Tier 1 Canadian automotive supplier.
  • The Company remained an active presence in a small town in Ohio and a viable competitor in the automotive industry.
  • 800 jobs were saved, and the new owner consolidated some manufacturing facilities and now has a $100 million company with a run-rate EBITDA of about 12%.
  • The Company’s senior debt will be repaid in its entirety.

Related Practice Areas

> Chief Restructuring Officer (CRO) and Interim Management Services 
Our experienced C-suite interim executives advise and support companies in financial distress, experiencing hypergrowth, or that are challenged by critical vacancies among senior leadership. Whether the leadership void results from operating challenges, a recent officer resignation, the need for added support during busy periods, or during an extended job search for the right permanent hire, our experienced executives provide immediate relief and value. 

 

> Bankruptcy Advisory 
Navigating bankruptcy is inherently complex, often involving struggling businesses, litigation, incomplete or inaccurate financial records, potential fraud, and other challenges, in addition to strict court-mandated processes. Our experienced team of turnaround and restructuring experts seamlessly guides clients throughout the process to optimize outcomes for lenders, creditors, shareholders, and employees. 

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