Assignment 20. 2004
XYZ GmbH / Manufacturer of exercise equipment
CEO (General Manager, restructuring into a new company. The client was the acquiring company.)
Restructuring, post-merger integration after the takeover on the heels of the bankruptcy of a Dutch competitor; increase profitability by double digits + amortize the takeover financing in three months.
The insolvent business had been family owned for over 100 years. It had built up considerable reserves off the books during that time but had consumed them during the last 10 years along with its creditworthiness. The company had explored a sale to competitors years ago, but the talks stalled due to the family wanting too much for the business. The European investor had a comparatively easy time taking over the business once it became insolvent. An asset deal transformed the business into a new company. All current assets were assumed as was the day-to-day business, existing customer base and 75% of the workforce. Negotiations with suppliers were particularly difficult at first as they required cash payment in advance for a period of approximately three months. Suppliers who insisted on all receivables due them by the insolvent entity were put into a separate class. This proved to be difficult, especially in the case of essential components, but was ultimately feasible. At the end of the assignment, the business and its parent company were the global market leaders.