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Case Study: Home Health Care ProviderManagement of Investor/Debtholder Relations, Profit Enhancement, Financial RestructuringCompany: $370 million provider of home health care services, consisting primarily of respiratory and infusion therapies and the rental and sale of medical equipmentSituation / Tasks Performed: The Company is the result of a roll-up growth strategy wherein over 300 locations in 39 states were purchased and merged. The Company's Bank Group became concerned about their exposure in the face of operating inefficiencies and performance issues at the Company. They were unwilling to fund additional operating losses and advised the Company to hire an outside advisor to assist them in resolving their situation. Phase I: The Company hired TRG to assist them in managing their relationship with the Bank Group, including providing analyses on cash flow (both short- and long-term), profitability (by business line and location) and debt restructuring with the objective of convincing the Bank Group to offer the Company continued support. Phase II: TRG was rehired approximately 18 months later to assist the Company in developing a business plan to support the negotiation of a more favorable, long-term lending agreement. Results: Phase I: TRG was able to convince the Bank Group that although the Company had operating performance issues that needed to be addressed, it did not face either a short- or a long-term cash crisis. In fact, while TRG was working for the Company, its cash balance grew by close to $20 million. In addition, TRG was able to demonstrate that long-term viability could be achieved given the right set of circumstances and that the Bank Group's exit options in the short-term were limited. Consequently, the Bank Group agreed to continue to lend to the Company under an amended lending agreement. Phase II: With TRG's support, the Company was able to negotiate a three year lending agreement with significant improvements in terms. Nature of Assignment: Primary: Management of Investor/Debtholder Relations Secondary: Profit Enhancement Tertiary: Financial Restructuring Industry: Health Care |
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© Copyright 2007 The Recovery Group, Inc. All rights reserved |
