Case Studies

Restructuring & Refinancing of Pet Food Bag Manufacturer

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

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Home·Restructuring & Refinancing of Pet Food Bag Manufacturer

The Situation

Privately held manufacturer of multi-wall paper bags for the pet food industry. Annual sales of $45 million. $15 million debt. Approximately 160 salaried and hourly employees.

  • The Company experienced liquidity issues and operational challenges due to severe damage to one of its printing presses and contract renegotiations with a large customer.
  • As a result, the Company embarked upon a comprehensive turnaround plan to restore financial performance, but lost the support of its senior lender during the process.
  • The senior lender was fatigued due to covenant violations, and the Company could not produce a comprehensive restructuring plan satisfactory to the lender within the senior lender's required timeline.
  • Without senior lender support, the Company struggled to fully implement its turnaround plan and faced an immediate need for liquidity and a capital structure modification.

How We Advised

The Company hired our experts to review prior restructuring initiatives, vet current business plan assumptions, and assist the Company in assembling a comprehensive restructuring plan to present to the lenders and potential financial partners.

  • Additionally, we assisted the Company in developing a rolling 13-week cash flow reporting package to help manage liquidity and evaluate cash flow.
  • Our team worked closely with the Company to evaluate alternative restructuring options, including refinancing the Company’s debt, raising new debt capital, and selling all or part of the Company’s assets.
  • The Company successfully developed a comprehensive restructuring plan that included both sale and refinance scenarios.
  • The senior lender supported the Company’s restructuring efforts in the short term and provided additional liquidity in order to bridge the Company to a refinancing.
  • The Company secured refinancing that paid off existing lenders in full and provided the Company with much-needed liquidity to continue executing its restructuring plan and to provide future growth capital.

Key Contact

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

Related Practice Areas

> 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. 

 

> Liquidity Management 
For companies in distress or undergoing rapid growth, ensuring sufficient cash flow to support operations requires a methodical approach to liquidity management marked by multi-department input, cross-constituent communication, prioritization, and negotiation. 

 

> 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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