The Situation

A regional bank had a longstanding client that began defaulting on loan covenants. The company manufactured and distributed industrial parts and was insolvent due to the downturn in the economy. The bank needed quick action to be taken in order to collect on outstanding principal and interest.

Copper Run’s Role

Copper Run was brought in to advise the company. Copper Run and management quickly decided the best action was to separate the manufacturing segment from the distribution segment, and then proceed with selling the two portions of the business separately.

Timing

Copper Run was able to create a buyers book, identify a list of qualified buyers across the U.S., and contact the qualified buyers in less than two weeks.

The Solution

In less than one month the manufacturing segment had an LOI in place, and in two months, the owner of the company received a cash payment for the manufacturing business, thus allowing him to make a large payment on his loan.

Final Analysis

Copper Run was able to quickly sell off a business segment, which prevented the Company from declaring bankruptcy. Selling the business as two different segments allowed for a quick sale with value maximization and prevented an orderly liquidation, which would have taken time, been costly and resulted in the company’s employees being laid off.

Air Waves, Inc. Case Study The Situation

Air Waves, Inc. was at one time a $25mil in sales manufacturer and international distributor of heat transfers and graphics for various forms of apparel and clothing. Air Waves had experienced a decline in sales during the prior 5-6 years and needed a fresh strategy and energy to bring the company into new and different markets. The Company was also owned by four individuals who were looking to retire and tiring of the day-to-day grind and concerns of running a 150 employee firm.

Copper Run’s Role

Copper Run was brought in to advise the company on a sale. Copper Run designed a prospectus and maintained an online data-room, assembled a list of potential buyers from the U.S. and abroad, conducted buyer tours and information sessions, and conducted a modified auction process to sell the company.

Separating Assets - Different Buyers for Different Assets

During the sales process Copper Run was able to develop a relationship with a South Korean company (E-Land Group) that initially was interested in purchasing the entire company. As time went on it was discovered that E-Land Group assigned the most value to Air Wave's graphics library (intellectual property) which had no value on the company's books. During this same time two separate buyers emerged for the entire company.

The Solution

Copper Run was able to negotiate the sale of a portion of Air Waves' graphics library to E-Land Group. Copper Run was then able to close a transaction for the entire company that enabled the owners to realize significant value in the sale and retire from the business.

Final Analysis

Copper Run was able to sell Air Waves in two separate transactions in order to maximize value for the sellers. Ultimately, the previous owners were able to stay with the Company for a short transition period prior to a successful retirement.

Private Equity Divestiture Case Study The Situation

When a local PE firm made the decision to exit one of their investments, they choose Copper Run to assist them in finding appropriate buyers. The company was Caretree, a niche manufacturing company of farm and nursery attachments.

Copper Run’s Role

Copper Run was brought in to make introductions to potential buyers. While we contacted some local buyers, we concentrated our efforts on contacting larger strategic buyers all across the country as we thought it would be more attractive to a strategic buyer who would move the company.

Timing and The Solution

Copper Run was able to contact buyers and have a singed LOI in less than 5 weeks. The company was sold to a strategic buyer based in Iowa.

Final Analysis

Copper Run was able to quickly sell the business allowing the PE firm to exit their investment. Our ability to work quickly and contact buyers all over the country was essential to getting the business sold.