Mid-size Company Transaction - Beach Mold & Tool, Inc.
Sheldon Stone, Amherst Partners
Brian Phillips, Amherst Partners
James Morden, Amherst Partners
Sue Cook, Warner Norcross & Judd LLP
Vince Pavlak. KPMG US
Peter Bolton, Wolfson Bolton PLLC
About the Transaction:
The restructuring team at Amherst Partners was initially recommended as a financial advisor by Wells Fargo Bank, Beach Mold & Tool's lender. Upon being engaged, Amherst determined that the company was insolvent, and operational losses were continuing to increase as time went on. These conditions ultimately proved serious enough for Wells Fargo to require Amherst to assume the role of CRO, at which point Wells Fargo also mandated a sale of the entity.
Rather than follow the path of pure liquidation, Amherst was able to first facilitate the sale of an underperforming division located in Virginia. The Virginia division was, at the time, responsible for the majority of the company’s continuing losses. These losses were consuming all positive cash flow generated by the remaining division located in New Albany, Indiana.
At the same time, acting as CRO, Amherst implemented an aggressive financial and operational restructuring plan at the New Albany facility. This included on-site cash management, operational restructuring, vendor negotiations, and management of customer relationships, including working with OEMs to ensure they would not re-source work to other suppliers, thus creating further difficulties for the company.
This work to stabilize the company, address systemic issues that resulted in its significant losses, and demonstrate the business’s potential value to prospective buyers paved the way for the successful sale of the business to Michigan-based NYX Inc.
Upon closing the transaction, NYX created a new operational entity, NYX New Albany, thus keeping the entity in the community. The results of the transaction were: 1) all existing jobs were preserved and new positions were created; 2) all secured and unsecured creditors were paid in full; 3) all professionals were paid in full; and 4) the final sale price exceeded the full payout to the creditors. Thus, Beach Mold & Tool equity shared in the proceeds and also maintained ownership of the facilities, which will provide ongoing rental revenues.