Phoenix Capital Resources Creates Value Through Pre-Emptive Sale
Phoenix Capital Creates Value Through Pre-Emptive Sale
Phoenix provided:
- Financial Advisory
- Sale of Business
Client
Heritage Cutlery, Inc., the largest U.S. manufacturer of hot-forged scissors and shears for a wide variety of markets, was a profitable subsidiary of Rogers, Lunt & Bowlen Company (“RLBC”).
Situation
Despite the positive cash flow of the Heritage business, the business did not fit into RLBC’s long-term strategy and RLBC was not re-investing the profits in the business to support its growth potential. In addition, the Heritage business had known environmental issues on the company-owned real estate that were continuing to be addressed over time. In order to maximize the value of RLBC’s investment and to help achieve its overall corporate goals, Phoenix Capital Resources was engaged as the exclusive financial advisor to sell Heritage Cutlery in late 2006.
Solution
Phoenix Capital Resources began its due diligence in late December 2006, then prepared a Descriptive Memorandum, and was ready to go to market by the end of January 2007. Prior to going to market, a customer of Heritage Cutlery was identified as an interested buyer. Phoenix Capital Resources negotiated a premium purchase price in exchange for allowing a “pre-emptive” bid prior to starting the competitive sale process. The final sale price represented a very attractive multiple of adjusted EBITDA as a result of real synergies between the two companies.
When the strategic buyer expressed interest in Heritage, it noted that the environmental due diligence would be its top priority due to a negative experience with a prior real estate transaction. Maneuvering through the environmental due diligence issues and negotiating acceptable solutions for both sides proved challenging and nearly derailed the closing several times.
Over the course of seven months, Phoenix Capital Resources:
- assembled a strong professional team,
- spearheaded the transaction process,
- coordinated communications between numerous constituents,
- managed expectations of the various parties,
- mediated disputes to resolve environmental due diligence issues, and
- reached a successful closing despite numerous delays
About Phoenix Capital Resources
Phoenix Capital Resources specializes in providing capital advisory services to middle market companies in transition. As an operationally-focused firm, Phoenix Capital assists challenged and growth-oriented companies with complex transactions including re-financings, restructurings, capital raising, mergers and acquisitions, recapitalizations and auctions in the context of a bankruptcy. Headquartered in Philadelphia, Phoenix Capital’s mission is to maximize transactional value and return on investment for its clients.
Delivering Value to the Bottom Line
Phoenix offers a unique blend of turnaround, crisis and interim management services, capital advisory services and operational due diligence. With extensive experience gained from more than 800 engagements, we understand our clients’ unique business drivers and create specialized solutions to meet their needs in both distressed and growth-oriented situations.
Phoenix specializes in working with middle market companies to enhance and preserve the value of our clients by solving the operational and financial challenges they encounter.
More Information
For more information about Phoenix Capital’s capital advisory services, please visit www.phoenixmanagement.com, or contact Vince Colistra, Managing Director and Shareholder, at vcolistra@phoenixmanagement.com.
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