Case Study: Turnaround and Sale of US specialty industrial distributor

Case Study: Turnaround and Sale of US specialty industrial distributor

Faced with stagnant and declining growth in a business with a high-cost operating model, and an unwillingness to invest adequately to secure a future growth plan, the shareholders elected to find a new owner for a leading US specialty flow control distributor. This was a multi-year engagement that began with an operating turnaround.

The engagement?

Drive up the numbers, stop the decline, get the company to grow again, and do it without any more investment. Get us into a position to achieve a good valuation, and then drive the sale.

What did we do?

Replaced the entire leadership team. Promoted from within. Restructured the sales force nationally. Moved, changed, upgraded, closed, opened over 50% of the national branch network. Focused on small operating efficiencies in the back office, small automation projects, small process changes, the cumulative value of which contributed to accelerated EBITDA growth.

Results?

We took a business in decline following two consecutive down years and drove 4 years of three years of top line growth at 9% (3x higher than the industry) and 19% annual EBITDA growth. On sale, we achieved a high water mark on multiples for the industry.

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