Case Studies

Turnaround Salvages Value for Kayak and Watersport Manufacturer

J.S. Held Acquires GLI Advisors, Strengthening Our Construction Project Support Services in the Western US and Hawaii

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Home·Turnaround Salvages Value for Kayak and Watersport Manufacturer

The Situation

Kayak and watersports manufacturer with two international operations. $60 million in annual sales. $24 million in bank debt. $16 million in subordinated owner’s debt.

  • Dissent between two ownership groups and consecutive years of losses resulted in a lender's loan exit decision.
  • Weak financial reporting and accounting controls.
  • High-cost manufacturing operations.
  • Governance dispute between two ownership groups.
  • The company had been previously marketed for sale, which resulted in a low-ball offer from only one bidder.

How We Advised

Our experts are appointed as an independent director and chairman of the board, as well as the financial advisor and investment banker.

  • Developed a profit improvement plan expected to achieve an estimated $7 million of annual EBITDA improvement, including price increases, RIFs, strategic outsourcing, re-sourcing of Chinese vendors, new product launches, sales channel expansion, including the launch of an E-commerce platform.
  • Cleaned up years of sloppy accounting, inventory valuation, and financial reporting.
  • Initiated the sale process, marketing the Company to over 100 strategic and financial buyers.
  • Financial results improved from $200K monthly loss to $300K monthly profit. Borrowing availability increased by $3 million through reduced inventory and accounts receivable levels.
  • Successful marketing resulted in 5 LOIs for the Company's purchase.
  • The auction process successfully generated a final buyer who fully paid all debt and liabilities, and a $15 million value increase from the prior purchase offer.

Key Contact

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

Related Practice Areas

> Board Advisory and Independent Director 
Our experts serve as board members and advise Boards of Directors for companies spanning all sizes, ownership structures, and industry sectors. Our unique blend of operational, financial, and transactional expertise allows a Board of Directors to understand the totality of its situation and the potential ramifications of various courses of action. 

 

> 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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