Watermill - C&M

Division: Phoenix Management Services


Watermill Ventures hired Phoenix to conduct due diligence for C&M. C&M is a 44-year old family owned specialty cable and cable assembly manufacturer with sales of approximately $62 million for FY2007. The Company’s target markets include multimedia, medical, industrial, defense and public safety, datacom/telecom, and data collection industries. C&M is headquartered, together with its major bulk cable manufacturing operations, in a 350,000 square foot facility located in Wauregan, CT. The company operates offshore cable assembly facilities in Hemosillo, Mexico; Guaymas, Mexico and Guong Dong, China. C&M employs 275+ non-union, US full-time employees plus 180+ sub-contracted employees in Mexico.


C&M had grown from a $30 million Company in FY2003 to a $62 million Company by FY2007. The growth of the Company had lead the majority of its non-operating family members to explore selling the business while the Company’s performance and prospects for the future were at its peak. Phoenix was engaged by the potential buyer, Watermill Ventures, to conduct an extensive financial and operational due diligence of C&M to be relied upon by not only Watermill, as the potential buyer, but the senior lender and additional equity investors to finalize the acquisition of the Company.


Phoenix Management Services prepared a written financial report that included the following: a review of the Company’s business plan and historical operating performance; evaluation and review of the Company’s internal financial systems and controls; evaluation and validation of the Company’s EBITDA add backs; examination and validation of the Company’s financial forecast; examination of the quality of balance sheet and working capital needs of the Company; examination of the exposure and potential risks with respect to credit policies; identification of areas for operational or financial improvement; evaluation of the planned relocation of the Company’s Mexico based manufacturing facility; review of the CAPEX and ROI plans; and the examination of the management needs and capabilities. Due to Phoenix’s due diligence, the purchases and lender were able to make an informed decision about their potential investment and gain a greater understanding of the Company’s business and the proper valuation and transaction structure(s) to be considered.