Engagement Results

Company:

Atlantic Extrusions Corp.

Industry:

Manufacturing - Plastic Extrusions

Size:

$65 million

Expertise:

Liquidation & Asset Sale

Assignment:

Atlantic Extrusions manufactured and distributed plastic products to the furniture, utilities and landscaping industry. The firm struggled with the challenges of operating a low margin business in a high cost environment. Management had not been able to achieve significant market share with any of the product lines and as such were frequently competing on price. Five executive management changes over an eight-year period had further eroded the confidence of staff members, lenders, customers and other stake holders.

Actions:

After working with senior leadership on-site, and in cooperation with the secured lender, MainStream provided a recovery valuation analysis that provided the parties with a forecast on recovered cash as well as an operating budget. During the first week, facilities were secured, equipment, account receivables and inventories were verified and payroll was reduced by 87%. MainStream identified that the best opportunity to provide the maximum return was to divide the assets and operations into four specific business lines. After consultation with the Board of Directors and the secured lender, MainStream identified prospective buyers for the business lines, trade names, customer lists and other intellectual property. MainStream then marketed them to approximately 40 strategic and financial buyers. During the sale process, existing inventories continued to be sold through to end-users and collection of the receivables continued to take place enabling the client to continue to generate positive cash flow. The property, approximately 240,000 square feet of industrial/office space located in New England, was placed on the market.

Results:

All business lines were sold in three transactions that were completed in less than 30 days. Because the New England real estate market was weak, the acquiring businesses were provided with short-term leases for the specific space that each needed. This allowed them to begin generating revenue off of their new business operations immediately, and provided the company with needed cash. The building was then sold for a respectable value with the proceeds going to the secured creditor for debt repayment.