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Case Study: Aerospace Manufacturer

Financial Advisory, Valuation, Financial Restructuring

Company: $200 million Aerospace Manufacturer

Situation/ Tasks Performed: The Company was a highly leveraged roll-up of independently operated suppliers to the aerospace industry with operations in both the U.S. and U.K. The Company was decentralized with weak systems and controls, and no perpetual inventory. There was substantial uncertainty surrounding actual gross profit levels and a lawsuit regarding a recent acquisition. In addition to current management not being "operators", Boeing decreased aircraft delivery and inventory, and there was excess capacity at business units and throughout the industry. It was uncertain that the Company would meet senior creditor obligations and pay interest to the senior subordinated note.

TRG consolidated operations, eliminated excess capacity, reduced SG&A and overhead. Excess inventory was liquidated and real estate, machinery and equipment were sold. Management was replaced with an industry experienced group, contracts were renegotiated with Boeing and a non-strategic overseas operation was sold leading to significant senior lender pay down.

Results: TRG increased operating leverage by focusing on strategic business units. EBITDA improved to $18 million on Sales of $125 million and Total Debt/EBITDA improved to 4x (after financial restructuring) vs. 12x. Subordinated debt was converted to equity and senior debt was restructured.

Nature of Assignment:
Primary: Financial Advisory
Secondary: Valuation
Tertiary: Financial Restructuring

Industry: Manufacturing