Restructuring | Turnaround for an investor

TEXTILE

M&A FOLLOWED BY TURNAROUND WITH PROFESSIONALIZATION THROUGH INTERIM MANAGEMENT BY INVESTOR DEMAND.

DEMAND: A producer of bed-and-table items, that became bankrupt in the first half of the 1980s, was absorbed by financial lending institutions, and later sold to a businessman in the industry, maintaining its publicly traded condition. Despite being successful, the new controller had no formal education and the recession that started in 1990 left him lost. Thus, he sought out investors who could capitalize on the company and take the lead in its management.

SOLUTION: These investors initially approached Orchestra - Soluções Empresariais to carry out the analysis and evaluation of the investment alternative through their professionals specialized in M&A and conduct the transaction for which they acquired 40% of the company. In sequence, our team was hired as an "interim manager" to lead the process of restructuring, recovery and professionalization of the investee.

All existing executives were changed, our team occupying executive positions since the Presidency, in addition to participation in the Board of Directors. The construction of a new industrial unit was completed and an old one was deactivated. Strictly professional management allowed 45% cuts in labor, costs and expenses, introduction of controls, change of product line and marketing and sales policy as well as strategy. The company also became a supplier of yarns, knits, cotton and polyester fabrics and a supplier of finishing and printing services for third parties. The products recovered their quality image, with high reflections on the sale price. Bank debt was cut in half and the credit concept recovered. Exports to several countries started to offset the weakness of the local market.

OUTCOME:  After two years, with the company fully rebalanced, the interim management process ended, replacing our professionals through the resumption of the Presidency and managerial positions by the controlling shareholders.

CALCIUM CARBONATE

M&A FOLLOWED BY TURNAROUND WITH INTERIM MANAGEMENT, AT INVESTOR DEMAND.

DEMAND: The largest Brazilian producer of calcium carbonate was controlled by the descendants of two families. Management by some shareholders and former employees was conflicted and under-qualified, although its two plants were well-equipped and functional. Annual sales of US$ 20 MM, without adequate planning, control and systems, resulted in losses and even misuse of resources. The shareholders aimed to sell the company.

SOLUTION: Within a few months, a large multinational group acquired 100% of the shares. Having advised the investor group in the purchase process, executive consultants associated with Orchestra - Soluções Empresariais took over, on an interim basis, the Presidency and management of the acquired company. The objective was to reorganize the company and adapt it to the structure of the new controller, its culture and methods, implementing new systems and controls, executing the applicable layoffs at all levels, taking measures to recover the diverted resources and transferring the headquarters to another state capital, where the multinational's Brazilian base was located.

OUTCOME: In seven months all objectives had been achieved, the transfer was carried out, new systems and controls were implemented, the layoffs were concluded with a 10% cut in personnel, more than US$ 500 thousand recovered from accounts abroad and customers, a and the company achieved a 12% level of net profit on sales. Its management was then physically transferred and integrated into the headquarters of the multinational buyer group, ending the interim exercised by our professionals.