Supporting a Private Equity Portfolio Company
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Situation. A private equity firm faced a subsequent round of investment in a retail distribution company whose novel business model was not producing its pro-forma financial performance. C3 was engaged by the portfolio company to validate its business model and provide support for future investment.
Actions. Assessed the market structure, operating configuration and cost efficiencies of the company. Evaluated the management structure and capabilities of the organization. Assessed its service offering, pricing model and competitive strengths/weaknesses relative to alternative distribution channels.
Recommendations. Current distribution model not viable. Restructure around smaller hub & spoke configuration; downsize corporate center. Verify new economics, then pursue multi-regional rollup. Minimize new investment and seek alternative investors to reduce exposure
Results. PE firm partnered with new investors and restructured bank debt. Firm subsequently sold to strategic investor.
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