FIRST ENGAGEMENT
Small businesses can turn around and regain optimal performance with a comprehensive business analysis and 13-week initiatives that set a charted course of action. Success from the strategy can ultimately lead to potential acquisition opportunities.
Situation
Situated in northwest Georgia is a well-established trucking company with a 15-year history of long and short-haul transportation of bulk materials including hazardous and non-hazardous liquid products, animal feed and livestock. Beginning at the end of 2015, over several months the company suffered a steady stream of setbacks that included declines in business from the destruction of a core customer’s facilities, untimely absorption of debt from the acquisition of a distressed company owned by a family member, family health issues, employee behavior issues leading to a compromised reputation, and overall increases in non-revenue generating costs. As the business continued to absorb losses, liens were taken on fixed assets, and to try to help capitalize the company, financing from a primary lender was executed which quickly evolved into an over-advancement the current assets could not support.
Objective
Fortis Business Advisors was referred into the trucking company by their financial institution. The primary objective was to stabilize the operation employing comprehensive turnaround initiatives, including 13-week cash flow statements, comparative operating statements, break-even analysis, and cost & profit distribution analysis. While gaining a better understanding of the financial condition of the business was underway, Fortis and the financial institution closely monitored cash flow to ensure the overall debt position had peaked and was improving, a new CPA firm was brought in to perfect the financials, and a triaged payment structure was implemented for secured creditors. This helped free-up the owner to focus on sales and service, employ exceptional drivers and a dispatcher to balance logistics, designate staff to manage invoicing and payables, sell non-revenue generating assets off of the yard, develop a high-margin brokerage business, and double-shift trucks for maximum revenue per mile.
Results​​​
Top-line performance improved by an average of 45.3%
The business stabilized, allowing the financial institution to designate factored receivables and develop a manageable term-loan payment structure for the outstanding over-advance
Debt service and payables steadily became more organized and scheduled with unanticipated A/P surprises eliminated
Actual cash flow was monitored against projections from 2-sets of developed 13-week initiatives
Fortis’ marketing team developed a comprehensive Investment Teaser Piece for prospective new investors and/or buyers
SECOND ENGAGEMENT
After a successful turnaround and operation stabilization, businesses are better positioned and more attractive for outside investment when an accurate valuation model is presented.
Situation
A well-established trucking company re-engaged Fortis Business Advisors to assist in a comprehensive analysis of the current financial, operational and managerial status of the company to develop an accurate valuation and pricing strategy. A potential buyer had come forward with an offer to purchase equity in the business with the request that an independent party analyze and asses the business to ensure arrival at an equitable price. During the initial engagement, Fortis had been referred to the company by their financial institution with the primary objective of getting a window into the organization and stabilizing the operation by employing comprehensive turnaround initiatives, including 13-week cash flow assessments, comparative operating statements, break-even analysis, and cost & profit distribution analysis. Once the business was stabilized, top-line performance improved by an average of 45.3%, and the lender was able to develop a manageable term-loan payment structure to get debt service organized. The company would ultimately be positioned for a merger or acquisition.
Objective
Fortis Business Advisors reviewed results from the initial engagement to establish a basis for the performance since the prior engagement. Fortis then proceeded to analyze 4-years and a trailing 12-months of financials to outline the current condition of the company and develop the strategy to not only establish a current valuation but also develop engineered profit projections to determine trend impact on a future valuation. Not only were the results of the analysis designed to give better insight to potential buyers, but also allow for the owner to recognize challenges the business was facing in order to take corrective action to make the business more valuable through future growth.
Results​​​
Top-line performance improved by an average of 45.3%
A comprehensive Ratio review was performed to highlight trends, performance, and strengths of the business over historical periods
Other deep dives of the analysis included, but were not limited to: Solvency & Capitalization, Working Capital Requirements, Break Even Requirements, Comparative Operating Efficiency, Profit Support, and Controlled vs. Uncontrolled Cost Breakdown
Engineered Projections were reflected in the EBITDA multiples, and additional projection models included, but were not limited to, Balance Sheet projections, Break Even projections, Working Capital Requirements, and Cost & Profit Distribution
Fortis’ marketing team developed a comprehensive Investment Teaser Piece for prospective new investors and/or buyers
THIRD ENGAGEMENT
Businesses that evolve from turnaround to growth planning ultimately benefit from a formal, bankable valuation to support financing, strategic planning, or M&A readiness.
Situation
Following prior engagements that stabilized operations and positioned the company to manage lender relations more strategically and outside investment, the owner of Trucking Company re-engaged Fortis Business Advisors to conduct a formal business valuation. With continued improvements in performance and capital expenditures, the owner required a credible, supportable valuation to guide strategic planning and assess M&A potential. The company's internal records still reflected accounting inconsistencies, such as improperly booked equipment assets, misclassified expenses, and an unbalanced Balance Sheet, making an objective outside analysis essential before engaging potential buyers or investors.
Objective
Fortis Business Advisors was retained to deliver a formal, weighted business valuation using the Asset Approach (including Adjusted Book Value and Liquidation Value), the Income Approach (Discounted Cash Flow), and the Market Approach (Comparable Transaction Analysis). In addition to calculating enterprise value, Fortis worked with the client to clarify asset and expense records, normalize financial reporting, and resolve discrepencies that could impact futre buyer confidence or bank underwriting.
Results​​​