OVERVIEW
- Credit Facility: $2,500,000
- General Description: Commercial Construction
- Geographic Location: Midwest
- Markets Served: Natural Gas Utilities, Telecommunications, Public Works Projects
THE SITUATION
For over 25 years this Midwest-based company has provided industry-leading natural gas utilities, telecommunication, and government entities with horizontal directional drilling services. Serving customers in all 50 states, this company is an industry leader with a reputation for its ability to get the job done right and on time.
Despite the company’s market-leading position, it was confronted with several unanticipated course-altering events that had a negative impact on the company’s operations, financial performance, and cash flow. As a result, the company was in violation of its credit agreement with its lender.
THE SOLUTION
JACO Advisory Group (JACO) established a comprehensive five-step restructuring plan to support the refinancing of the business into a new lender. To provide the required “runway” the company needed to execute the 5-step plan and meet the bank’s reporting requirements, JACO worked with the company to implement a robust 13-week cash flow forecast model, while also working to bring past due accounts payable current and restructuring the balance sheet through the sale of $11.4 million in non-strategic assets.
As part of the restructuring plan, JACO worked with the company to create pro-forma financials including multi-year projections. JACO worked with the company and a strategic lender to understand the company’s needs as it returned to stable operations and refocused on the profitable growth of its business.
THE OUTCOME
The company successfully refinanced with a new lender who understood the company’s business and the turnaround plan it was executing. The new loan has provided the company with the required working capital needed to stabilize its operations, allowing it to return to a profitable growth trajectory with a right-sized balance sheet and conservative debt levels.
