Background
- Earthmoving equipment repair company
- Annual turnover of $6 million
- Loss of $300K FY07 (profit of $800K FY06)
Key Issues
- Succession plan - sale of business required
- Senior management change did not work
- Reduction in morale
- Business is undeperforming but significant profit/cash generation opportunities
- Considerable thought required on finance structure for the purchaser
4 Phases
- Financial and operational due diligence
- Determine appropriate finance facilities
- Develop turnaround strategy for purchaser
- Implement & monitor turnaround strategy
Outcome
- Debtor book leveraged as part of purchase consideration
- Debtor finance required as considerable working capital growth forecast as part of successful turnaround strategy - Debtor finance is an important tool in any turnaround
- Transaction settled and a similar structure will be used for further acquisitions by this client
For further information, visit http://www.vantageperformance.com.au/ or call Vantage Performance on (07)32295750
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