Storage Building Manufacturer

Company Overview

Storage Building Manufacturer - The Company is a $35 million manufacturer and marketer of metal self storage buildings, building storage conversion systems and related storage products in North America.  The Company also operates two related units:

•  A metal roll-up door company selling to door dealers, retailers and into the self storage arena.

•  A division that sells and constructs buildings and mobile units used by fire departments as training facilities including municipalities, military and other government entities.

 

 

Engagement Overview
•  The economic downturn and the inability of customers to secure financing to purchase and construct self storage projects led to a 50%+ sales decline on the heels of an ESOP led leveraged buyout .  At the time of the engagement, current operations could no longer support required debt service.

•  FDP was initially engaged to perform a “high-level” review of management’s plan to return the Company to profitability:
•  FDP worked with management on initiating additional cost cuts to reduce break-even
•  FDP negotiated relief on debt service from the Company’s senior and subordinated debt lenders
•  Recommended exit from non-core business unit
•  Performed valuation and exit strategy analysis comparing a sale to a wind-down, ultimately gaining acceptance of an “operate and hold” strategy

•  Working with Board and lenders, FDP was selected as the Chief Restructuring Officer for the Company.  Changes made include:
•  CEO stepped down; provided interim CEO services including direct involvement with customers, vendors and the union
•  Restructured sales and engineering departments into project management teams to reduce “silos”
•  Brought focus to customer service and error reduction efforts (“cost of quality” being addressed)
•  Initiated change to leadership in engineering department and in fire training division
•  Targeted inefficiencies in manufacturing and started lean initiatives
•  Developed incentive plans for all office employees, including revised sales force incentive plans
•  Led efforts to grow conversion product line to address the growing opportunities from increasing vacancies in retail, industrial and commercial real estate
Results

Under Fort Dearborn’s direction, including serving as interim CEO, the following initiatives were implemented:

•  Changed “stodgy” engineering  driven Company culture to a customer-focused environment and improved employee willingness to embrace change and explore new markets and opportunities.

•  Secured support of senior/mezzanine lenders totaling approximately $30 million, including significant concessions on principal and interest payments.

•  Gained Board and lender approval for acquisition of a West-coast competitor.

•  Initiated outsourcing business model to improve competitiveness in certain markets.

•  Recruited senior executives including new CEO, head of engineering and expanded sales force.