Twine Manufacturer

Division: Phoenix Management Services, Phoenix Capital Resources


Client

Our client was a $31 million Manufacturer of Polypropylene Twine for the agricultural industry based in Utah. Products were sold through large agricultural distributors through the farm industry for use on their hay baling equipment.

Problem

The corporate parent sought to divest the company as it did not fit into its core automotive strategies. A private equity firm acquired the Company at a very high valuation. Management was replaced and significant debt was added to the Company’s balance sheet. High inventory levels and delayed payments from its agricultural industry customers further strained cash flow.

Solution

Phoenix Management Services was retained by the secured lender to maximize its recovery after the Company had agreed to surrender its assets. Phoenix immediately identified industry buyers for certain segments of the inventory. An aggressive program was implemented in order to reduce outstanding accounts receivable balances. Phoenix sought out potential acquirers for the remaining assets of the Company. After a bidding process, a secured party sale was concluded with a strategic buyer from Europe that wished to establish a footprint in the United States. The secured lender achieved a total recovery of its position.