Case
Study: Home Health Care Provider
Crisis Management, Turnaround Management, Business Strategy Development
& Implementation
Company: Regional home health care provider that
was formed in 1996 by a private equity group to roll-up the regional home
health care service providers
Situation/ Tasks Performed: The Company grew by
acquisitions and reached $70 million in revenues by 1998 and by late 1999
the Company ran into liquidity problems due to operating losses and slow
accounts receivable. The Company violated its bank and financial covenants
and was in payment default. The management departed and the private equity
group hired TRG for crisis management and turnaround consulting. TRG stabilized
the short-term cash flow situation by developing a vendor management program
to ensure uninterrupted material supply to all locations and entered into
a forbearance agreement with the bank group. TRG also established a group
to focus on revolving and collecting receivables. TRG worked with the
private equity group and valued the business for the purposes of restructuring
and de-leveraging the balance sheet by converting the seller notes to
equity in financial alternative scenarios. TRG and the new management
analyzed and developed operational restructuring which included selling
non-core assets and businesses, consolidating core operations, eliminating
non-profitable and low volume products and services, lowered insurance
costs and installed a new billing and collection system to reduce unbilled
revenues.
Results: The Company was able to restructure its
senior debt, which ultimately allowed the Company the time necessary to
rebuild shareholder value and repay its obligations.
Nature of Assignment:
Primary: Crisis Management
Secondary: Turnaround Management
Tertiary: Business Strategy Development
& Implementation
Industry: Health Care
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