Company Transition and Restructure

Graveritas Group performed a Re-Engineering of the Company’s Business Model

The Client, a manufacturing and importing company with an industrial and consumer product portfolio had seen its margin and profits disappear with the strengthening of the Canadian Dollar. With commodities making up much of their product line and the bulk of the products having been around for a long time and therefore in the mature phase of their life-cycle, the company’s future was very bleak.

Graveritas was able to identify and action the following:

• Customers knew the company’s business in so much detail that the company was disadvantaged during negotiations;
• Company’s customer base order trend was one of reduced manufacturing run sizes while expecting their costs to remain stable;
• The threat of global competition was used to keep the Company’s pricing low
• Contract terms for major portions of available business meant no significant sales growth for up to 24 months;
• Sales cycle for qualification process prior to award of business was approximately 12 months;
• Research and development, as well as innovation, was being done by teams that worked in Silos – no means by which to add value to product or service without significant company investment;
• One business division out of three within the company was both profitable and sustainable and could be further developed as an independent entity ;
• Normalized costs for U.S. based manufacturers made the manufacturing segments of the business attractive ;
• A sale of two of the three segments would be profitable due to the excessive barriers of entry to the customers within the Company’s portfolio;
• A succession plan could be incorporated as part of the divestiture of two divisions;

Results:

• Client sold most of its assets and avoided possible bankruptcy;
• Ownership succeeded in holding on to its most profitable operating asset;
• All of the Client’s constituents; customers, suppliers, bankers, union employees and staff were dealt with in a respectful manner;
• Client had a smooth sales transition, minimizing customer disruption’ inventory anomalies, and supplier upheaval;