OVERVIEW
- Revenue: $20,000,000
- General Description: Produces High-Performance Diamond Tooling
- Geographic Location: Southern US
- Markets Served: Commercial Construction, Concrete, and Stone Cutting Industry
THE SITUATION
Our private equity-owned client (the “Company”) has been a leader in the diamond tooling industry for nearly 80 years. However, in 2023, the Company faced significant financial challenges, breaching its loan covenants and entering a forbearance agreement with its lender. As part of this agreement, the Company was required to engage a financial advisor to establish and monitor critical financial benchmarks for the bank.
The Company grappled with numerous obstacles, including difficulties in creating an accurate budget, maintaining sufficient liquidity, achieving reduced covenant levels, and managing a complex supply chain. Increased competition from overseas manufacturers further compounded these issues, while limited resources hindered their ability to expand product offerings. As a result, revenues stagnated, and rising costs placed additional pressure on the business, deepening its financial troubles.
To recover, the Company needed to enhance efficiency and reduce costs without compromising quality or customer satisfaction. With a long-standing reputation for exceptional customer service, a loyal customer base, solving difficult application problems, and a strong “Made in the USA” brand promise, it was imperative to uphold these values while implementing necessary changes to regain financial stability and competitiveness.
THE SOLUTION
JACO stepped in as Chief Restructuring Officer (CRO), providing interim leadership as the bank sought ways to exit its relationship with the Company and recover its capital. Despite industry speculation about the company’s future, JACO worked closely with its leadership to improve operations while simultaneously managing the Company’s sale process. During this challenging period, the Company stayed focused on its customers and operations, consistently generating sufficient cash flow. This success was largely due to the strong operational and administrative leadership within the organization, coupled with an “all hands on deck” approach.
JACO helped align the sales and operations teams around a shared goal of “winning,” fostering collaboration to achieve positive outcomes. Recognizing that a company sale would yield a better financial result for the bank than liquidation, JACO took the lead in orchestrating every stage of the sale process. This included identifying strategic buyers, securing letters of intent, overseeing due diligence, negotiating the asset purchase agreement (APA), and finalizing the transaction. Throughout the sale, JACO skillfully balanced the interests of multiple stakeholders, including the company’s 60 employees, its customers, the bank, the former private equity owners, and the supply chain.
By providing decisive leadership and a clear path forward, JACO ensured a successful outcome for all stakeholders.
THE OUTCOME
In Q4 2024, the Company completed a successful transition to new ownership, marking a pivotal moment in its history. This change has brought renewed optimism among both JACO and the Company’s employees. The sale has alleviated many of the financial challenges faced by previous ownership, paving the way for a stronger, more stable future. With this solid foundation, JACO is confident that the new ownership will act as capable and responsible stewards, guiding the business toward long-term success.
However, JACO’s involvement didn’t end with the sale. At the bank’s request, JACO has remained actively engaged, overseeing the orderly wind-down and dissolution of the legacy legal entity.
JACO takes great pride in knowing that the Company’s customers continue to enjoy premium, American-made products—products that reflect the dedication and craftsmanship of the 60 families who have been integral to the Company’s story for many years.
