“Maximizing value to shareholders in a corporate transaction requires establishing a strong foundation months beforehand”
Clients and Case Studies > Operational Improvement and Restructuring
Client: Sandhill Disposal & Recycling Inc.
Situation:
Ownership of a regional waste management collection company with industry norm operating returns and an annual organic growth rate of 5 to 10% wanted to make a transformational investment in the company to expand its operations and diversify its revenue base.
Our approach:
GEP was engaged in March of 2003 to work with ownership and management to (1) establish a five year business plan, (2) identify the capital requirements and related financing alternatives to execute on the company's business plan, and (3) establish the preferred timing and equity valuation for the ownership group to exit during years three through five of the business plan term. GEP's mandate was later expanded in 2004 to include operational improvement mentoring.
Over the course of four years, GEP built the business plan, raised the necessary capital to expand the business, supported management in the execution of growth initiatives including the building of a fixed facility (waste transfer station and recycling facility), a tuck-in acquisition and numerous material organic growth initiatives, and worked with management on improving margins and cash flows. The operational mentoring focused on the development and use of a detailed monthly budget by line of business with Key Performance Metrics (KPI's), and the implementation of monthly ownership and management meetings to review KPI's and create ownership and accountability throughout the organization. KPI's focused on fixed costs control, operating profit margin enhancement by activity, revenue growth, working capital management, and capital expenditure planning and execution.
Impact:
Ownership and management successfully navigated through a robust growth phase, leading to a 120% increase in the company's revenue, a 150% increase in the company's profitability while maintaining a strong balance sheet that used an "appropriate" level of debt to finance growth.
Testimonial:
"GEP was instrumental in turning my company around, implementing a disciplined and well thought out approach to operating and dramatically growing my company. The results speak for themselves! GEP increased the value of my company, made it easier to sell and ensured the long term viability for my employees and for the new owners! As I enter into the next phase in my life, I am grateful to Ken and Tony for supporting my family and I in making our dreams become reality."
– John Devins, President