Case Study – Acquisition and Turnaround of Underperforming Divisions
"I don't want to hear anything I have already been told" – President – Large Private Company
Two business owners wanted to separate their individual family interests and that of two purported underperforming divisions. Three other consulting firms had already been engagement prior to the GMK Management Consulting team to assist in this regard.
We were contracted to undertake a Situation Assessment, with a focus on operational performance, industry benchmarks, and financial reporting measurement. As well, a financing proposal was prepared to assist in securing an eight figure operating line for the new entity.
We successfully met our challenges. Our plan of action has provided a clear road map to move the new company forward. Within 18 months, the new entity has exceeded our profitability targets.
Key Success Factor – used benchmarking to quantify impact of under performance
Case Study -- Mid-Decline Distressed Company
We were referred to a company that had just been placed into Special Loans by their operating lender due to financial covenant breaches, successive years of losses, and departure of CFO/Controller. The engagement involved lender liaison, management mentoring, financial performance improvement, and value enhancement supports.
Financial performance parameters were established as well as a plan to "right" the company – profitability returned within one year – the company exited Special Loans shortly thereafter and has never looked back.
"they were simply amazing!" – Second Generation Owner Manager
Key Success Factor – mentoring and crisis management – clear, concise advice on strategic direction and focus
Case Study – Stagnant Break Even Operation
For many years, the company had a virtual monopoly for their products. Then the market changed, but the company did not. While sales dwindled over eight years, operations were rationalized many times to minimize impending losses and conserve capital. Shareholders and family members could not agree as to a resolve.
"I don't know what it is, but something is going to change!" – President – Medium-Sized Manufacturer
A Situation Assessment was commissioned with a focus on viability analysis and alternative strategic marketing options. An Executive/management team assessment was also undertaken to identified strengths and non-strengths to be addressed in each alternative scenario presented.
As a result of our involvement, differences have been mediated and reconciled, a new strategic direction has been charted, Executive and management teams have been reconstituted, and the process of restoring enterprise value has commenced.
Key Success Factors – support of recommendations with undisputable facts in the face of strong and unsubstantiated opinion; clearly delineated the impact of long term declining cash flows on shareholder value
Case Study – Leveraged Buy-Out
GMK Management Consultants was engaged to work with the company's acquisition team and provide management advisory, due diligence, and financial controls assessment assistance.
Working through the seller's list of representations and warranties and the target company's financial reporting and internal control systems, a number of operational issues were identified. Further investigation led to discovery of an undisclosed third-party admission that led to a significant and favorable pricing adjustment.
"uncovering that omission turned the tables on our negotiation – the fees were a small fraction of what we saved" – CEO – Group of Medium-sized Companies
Key Success Factor – thoroughness, experience, persistence
Case Study – Large-Scale Turnaround
After experiencing eight figure cumulative losses, GMK Management Consultants was brought in to provide operational review, benchmarking, and gross margin improvement assistance. Overall performance targets had been established at levels necessary to sustain the business. Our challenge: take $4,000/unit out of product cost.
Benchmarking confirmed the attainability of the target. Over 15 separate initiatives were identified to be undertaken over the course of two years in order to meet this challenge. All facets of the operation were affected: product re-engineering, materials sourcing, methods, and procedures.
Clear milestones were established to monitor progress. The company is still short of achieving their overall objective but has been successful in stemming all of their cash losses.
"Greg provided immediate impact and direction" -- VP Investments – Venture Capital Fund
Key Success Factor – focus – assisted the management team in pulling together their many disjointed thoughts and ideas into one concise and measurable plan of action
Case Study – Lender Advisory Support
"The GMK team was brought in to provide valuation and recovery advice on one of our Commercial Borrowers; Greg worked closely with our Special Loans department to provide advice, analysis, & monitoring – he was instrumental in ensuring that we minimized our potential losses." --Commercial Account Manager – Chartered Bank
Key Success Factor – experience – critical assessment of immediate turnaround and recovery prospects