Restructuring Strategy for an Agribusiness Operating Division
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Situation. A new division president was hired to turnaround a $200 million operating division with businesses in fresh produce distribution, specialty food processing and packaging. The division had grown by acquisition, but underlying growth was flat and profitability had gone negative. C3 was engaged to lead a systematic strategy audit of the businesses and enable the division leadership team to set a new strategy for renewed profitability and growth.
Actions. Assessed market dynamics, client position and current strategies for each business. Evaluated plant and supply chain economics. Profiled foreign suppliers’ cost position and competitive strategy. Analyzed acquisition performance and acquired-personnel contracts.
Recommendations. Consolidate/restructure the distribution network around core plants and high-value customers; buyout existing acquired personnel contracts. Improve specialty food plant loading; pursue industry rollup or divest to consolidator. Divest packaging operation.
Results. Sold packaging and processing businesses at 35% premium to operating value. Improved distribution business EBITDA by $11 million within 12 months.
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