Cheese Manufacturer – Contingency Planning

CRO and contingency planning role in a £30m private equity owned food business

Background

Introduced by Private Equity owners to appraise business, management and where necessary engage with company’s lenders.
Business dangerously underperforming and threatening to breach covenants but with a potential sale still progressing.
While this was a watching brief my purpose unspecified to management was to take over the running of the business immediately should the sales process fell over.

Key Challenges

Management focussed on Sale and disengaged with running the business and did not want to engage with me.
Needed to understand issues and options without derailing sale.
Profit improvement plan had been introduced but was half hearted in its implementation.
Bank were happy to keep a watching brief while sale process was live but would become extremely demanding in the event of it falling over.

 

Main Actions

Assessed Profit improvement plan and drove that in key areas where applicable.
Got broad understanding of market, product and customer profitability and viability.
Prepared bank engagement strategy and through that got better engagement of management and understanding of some of the historic issues.
Through formal and informal engagement got a clear view on management structures needed.

 

Main Results And Achievements

Prepared and agreed a detailed contingency plan for the Turnaround of the business with the PE owner. The plan covered:
Bank Engagement
Management changes and interim cover
Customer engagement
Cost reduction
Product profit improvement and rationalization
Supplier review and rationalisation

Sale was successfully finalised integrating the business into a larger international trade buyer.