Case Studies

New Business Plan Used for New Equity and Debt Restructuring

J.S. Held Acquires Clark Seif Clark, Strengthening West Coast Capabilities for Environmental Claims, Disputes, and Catastrophe Response

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Home·New Business Plan Used for New Equity and Debt Restructuring

The Situation

A $30 million eDiscovery business for large litigation cases was $15 million in debt.

  • Big declines on the paper side of business over the prior several years.
  • The eDiscovery side of the business is growing 50% annually.
  • Equity wanted to invest for growth, but a debt investor held a blocking position.
  • Encore had built up $30 million revenue business around the emerging growth e-Discovery business.
  • Their growth strategy was a combination of purchasing local paper discovery providers and growing their electronic resources through development or purchase.
  • Total spending required to attain the next set of objectives was $9-10 million.
  • Equity saw the potential, but the mezzanine lender held a blocking position.

How We Advised

  • Our experts were brought in by the equity sponsors to evaluate the next tranche of investment and opportunities to negotiate with the mezzanine lender.
  • We collaborated with management to develop a business plan that focuses on the eDiscovery side of the business without compromising the leverage of the paper business.
  • Our team negotiated a deal with the mezzanine lender and a restructuring of the senior debt, allowing $5 million of new equity to enter the company and provide funds for necessary investments in technology, sales personnel, working capital, and a paydown of the mezzanine debt.

Key Contact

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

Related Practice Areas

> Debt Restructuring Services
When a company is in financial distress, our Strategic Advisory experts design and implement debt restructuring and refinancing strategies tailored to the company’s unique circumstances. We help middle-market businesses stabilize operations, improve liquidity, and optimize their capital structures.

 

> Business Plan Validation
We deliver integrated solutions for distressed and insolvent businesses that maximize recovery, mitigate risk, and restore enterprise value. Our experts are retained to help distressed organizations stabilize operations, protect stakeholder interests, and execute turnaround strategies. We take an operationally-focused approach that looks beyond the balance sheet to minimize further degradation and build a path to sustainable growth. Our team delivers hands-on guidance and independent analysis to lenders, creditors, legal counsel, executive teams, boards of directors, and investors.

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