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 Managing Transitions: Selected Client Matters Rationalization of Failed Acquisition Amidst ERP Crisis in Public Company Norelli’s post-acquisition work with an acquired company revealed major working capital management and systems issues as well as competitiveness problems. Simultaneously the parent company was reeling from a start-up failure of a multi-million dollar ERP software installation project. After being named interim CEO of the parent company, Norelli divested the faltering acquisition, rolling some operations and customer relationships into a sister company (another acquisition). Norelli’s IT triage team had the essential parts of the new system (materials planning, production planning and control, inventory, billing…) working effectively within two months. back to top Restructure and Consolidation of a Failed Rollup A holding company with geographically dispersed operations (West, Southeast and Northeast) was pursuing a rollup strategy in telemarketing and call center services. Commercial lenders lost faith in the company following a series of management missteps, a decline in call center valuations, and a deterioration in the shareholders’ ability to support the company. When management engaged Norelli & Company, net enterprise value was negative. Norelli advised the Board on eliminating management at the holding company level, refinancing the debt, and selling a significant portion of the business. At the conclusion of this engagement, the original shareholders still owned, debt free, more than 50% of the business. back to top Restructuring and Repositioning of Public Multidivisional Manufacturing Company A public company was experiencing large losses resulting from a lack of strategic focus, stranded investment in manufacturing facilities, a failed ERP system implementation, and intense competitive pressure. Norelli & Company was engaged by the Board for an interim management role. The mandate was to do whatever necessary to assess the situation, stabilize the business, and save the company. The Norelli triage team stabilized the cash position, restored the ERP system to acceptable functionality, developed and implemented initiatives to reduce costs, refinanced the bank debt, strengthened management, redefined the business model for certain businesses, and developed the strategy which led to the sale of one division and the spin off of another. The remaining parts of the business survive as a healthy, profitable public company. back to top Assimilation and Rationalization of Ill-Conceived Acquisitions A third-tier manufacturer of automotive components and assemblies had significantly overextended its management and financial capabilities through domestic and international acquisitions. When Norelli arrived, the company (a late first-generation family business) was in Special Assets, losing money, overadvanced on its credit line, had a multimillion dollar “air-ball” on its term loan and less than three weeks left on a forbearance agreement. With the mandate of interim President and CEO, Norelli stabilized cash flow, realigned senior management, returned the company to consistent profitability and refinanced the company’s debt. Furthermore, Norelli conducted a detailed strategic evaluation of the recent acquisitions which led to the divestment of a European plant, the restructuring of the sales organization of a domestic distribution company and its consolidation with that of the parent company, and enhanced technology and talent transfer to an Asian subsidiary to promote global manufacturing and sourcing. Nineteen months later, Norelli turned the CEO title over to the founder’s son. back to top Family Distribution Business in Transition The lack of management depth and outdated technology and processes paralyzed the organizational development of this third-generation family business (a leading distributor of supplies and materials for construction and HVAC markets). While still financially stable, the Board asked Norelli to be the change agent and position the company for future growth. Under Norelli’s nine-month-long leadership as interim President & CEO, unprofitable market segments were eliminated and the management talent realigned. Norelli restructured the MIS department, followed by the design and implementation of a company-wide IT conversion program involving more than 100 branches, which was successfully completed ahead of schedule and under budget. back to top Restructuring of a Public Franchise Business After a period of rapid domestic and international growth, this publicly-held franchise operation was losing money once again. Norelli was hired by high-profile outside directors though management fiercely objected. Tensions were also high between the company and its institutional creditors and single largest trade supplier. Norelli conducted customer focus groups and confidential interviews with host retailers and employees. Norelli’s strategic assessment led it to the conclusion that management’s strategy was doomed to fail. The Board asked Norelli to become the interim CEO to restructure management and oversee a new turnaround plan. Cash flow improved dramatically, bankruptcy was averted, shareholders unanimously approved the infusion of new equity, and the company returned to profitability by its fourth quarter. The company remained profitable for its entire first Fiscal Year following Norelli’s engagement, and the banks were paid in full. Surprisingly the best days of the company were still ahead. back to top Distributor of Paper and Printing Supplies Restructures its Entire Business Concept This second-generation family business and leading multi-state distributor of packaging and printing supplies required a comprehensive strategic and organizational assessment, with specific focus on upper management talent. In a ten-month stint as interim COO, Norelli acted to ensure a swift analysis and subsequent implementation of the proposed action steps. The entire business was restructured from a geographic to a Strategic Business Unit concept and significant cost synergies were realized. A new incentive plan for the reorganized sales force was put in place resulting in a substantial reduction of total sales compensation while providing additional rewards for top performers. Norelli’s restructuring concept helped enhance shareholder value and made possible the transfer of the business to the third generation. back to top |
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