Consumer & OEM Plastics
Team
Roles
Financial Advisor, Chief Restructuring Officer, Analyst
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Dennis Gerrard
Partner, Partners
Dennis Gerrard's background spans over 30 years in senior leadership positions including 21 years in turnaround management and financial restructuring.
- Secured regulatory approval for the new product
- Settled outstanding EPA violations
- Preserved enterprise value during sale process
The client was a plastic blow molder with a line of retail products and a provider of custom OEM parts. Due to numerous missteps, key OEM customers were lost and operating performance declined, leaving the business at risk of violating covenants in their loan agreements. CR3 was engaged to address missed forecasts, and was ultimately retained as CRO, developing a plan to deal with the internal issues, and negotiating with the senior secured lender. Company infrastructure was deemed insufficient and as a result a sale process was undertaken for multiple portions of the business. CR3's handling of the sale ensured preservation of jobs and the associated enterprise value. The remaining facility and associated equipment were sold separately for asset value.
The Situation
- Plastic blow molder with a line of proprietary retail products and a provider of custom OEM parts across a number of industries
- Missed retail deadlines, an outstanding EPA violation, and one of two facilities falling behind, led to declining operating performance; numerous forecasts were missed; company would soon violate covenants in their loan agreements
- Key OEM customers were lost and the pipeline became underdeveloped
The Work
- Financial Advisor to address missed forecasts, ultimately engaged as CRO
- Reorganized product development team to address failed regulatory aspect of a new product and hasten its introduction
- Recruited new plant leadership and established task forces to isolate and tackle the issues associated with evaluation of relationship with three specific OEM customers
- Developed action plan to resolve commercial concerns and created CapEx program to deal with internal issues
- Negotiated with senior secured lender to recast the balance sheet
- Resolved issues with OEM customers, and determined company infrastructure was insufficient and unable to economically produce higher tolerance products
The Results
- CR3 secured regulatory approval for the new product and settled outstanding EPA violations
- Due to insecure infrastructure, funding could not be secured for sufficient plant and equipment improvements – engagement team undertook sale process for one of the two facilities, the consumer products business and a partial book of the OEM segment
- Team’s diligent handling of sale ensured jobs and the associated enterprise value were preserved; remaining facility and associated equipment were sold separately for asset value
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