Liquid/Dry Powder Egg Processor and Egg Farming Operation

Company Overview

 

Liquid/Dry Powder Egg Processor and Egg Farming Operation

 

•  Our client is a $150 million revenue holding company with two wholly-owned subsidiaries and multiple plants throughout the Midwest.

•  Subsidiary 1: breaks, separates and processes shelled eggs, and dries egg liquid into powder primarily for ingredient and foodservice customers.
  
•  Subsidiary 2: manufacturers and packages agglomerated, dispersible and coated specialty ingredients.
Engagement Overview

•  Subsidiary 1 was in the process of executing a strategic plan to diversify its product offering and consolidate/upgrade/relocate its production facilities.  During this time, the Company also faced margin pressure due to challenging market conditions and high input costs. As a result, the Company suffered significant operating losses for two consecutive years.

•  Subsidiary 2 experienced the loss of two key customers resulting in significant volume loss but remained profitable.  Within a year, the Company secured 4 new major customers.  However, these customers required the Company to make significant capital investments in order to retain the business.

•  Fort Dearborn was engaged to review and revise the Company’s strategic plan and financial forecast.

•  As part of the process, Fort Dearborn developed a thorough understanding of the company’s operations, its sales and hedging strategy, as well as its purchasing contracts and commitments.
  
•  Fort Dearborn worked with management to refine its hedging strategies, revise its procurement practices and to develop a robust cost accounting for its products.
Results
•  Based on Fort Dearborn’s assessment of the Company’s strategic plan and current financial position, it was determined that one or both businesses should be sold.

•  Fort Dearborn was instrumental in assisting the Company with obtaining additional financing from its existing lender through a credible and thorough financial forecast process to bridge to the sale of the Company.
  
•  The sale of both Companies are pending, and are expected to close during the summer of 2013.