Aerospace design engineering services : Specializes in aftermarket modifications of aircraft, conversion from Passenger to Freighter. weight and interior design. Provides expertise in systems integration and structures and obtains FAA certifications. Develops in-house supplemental type certificates.
April 2015-October 2018
Maximize exit value: sell-side business due diligence. Focus areas:
- Validation of current performance.
- In-flight and planned improvements.
- Under-recognized and under–quantified opportunities.
- EBITDA, Working Capital levers:
- Sales, Inventory & operations planning.
- Productivity – upgrade labor utilization.
- Sales – backlog and pipeline improvements.
- Gross Margin uplift and sustainability. (eg: price increases)
- EBITDA validation going back ten years.
- Review and solve issues with Assets &Liabilities – on and off Balance sheet
- Apply audit and GAAP principles in preparation of Financial statements and related schedules.
- Prepare supplementary information, CIM , forecasts and scenario planning.
- Value creation in the business: 1. Expanded Sales reach and increased backlog and pipeline by over 50% sustaining it over the next 5 years. 2. Analyzed and identified sources of Gross Margin improvement – productivity improvements and reduced idle time, faster turnarounds, price increases, new pricing opportunities.
- Established and assisted in the execution of a strategic plan.
- Identified a 30% EBITDA uplift for the past ten years.
- Assets and Liabilities – identified red flags, cured them and updated to reflect reality and ensure off Balance Sheet items regularized.
- Identified and engaged a M&A firm and worked to prepare the company for sale – Valuation, Investment deck, Financials, Q&A.
- Organized data room, answered questions from interested buyers and provided detail follow up information.
- Evaluated offers, valuations and advised the owner on options.
- Completed a buyer’s due diligence audit by Price Waterhouse without any changes to the Financials.
- Worked with buyer’s tax accountant – Ernst & Young on the tax aspects – cash to accrual, R&D tax credits and other considerations – S to C corporation conversion.
- Prepared Proforma 3 years earnings projection and related Financials.
- Tracked current YTD actuals and proforma to establish credibility during deal process.
- Worked with the owner to establish a retention plan for key employees.
- Worked with the owner and several other advisors on the deal structure – upfront, earn out components, bonus and tax implications.
- Worked on a post-sale integration plan.
- Increase in Enterprise value – from $5m – $7m, deal closed at $11.5m. both due to higher EBITDA and higher multiple.
- Enterprise risk reduction due to an ever increasing pipeline of sales orders and quality of customers and projects – Sales increased from $6m to $11m and gross margins increased from 33% to 41%.
- Quick turnaround of consistent information increased buyer confidence in dealing with “one set of truths” and no surprises.
- Transaction velocity increased due to shortened buy side due diligence, faster close/faster diligence timeline.
- All round confidence sustained – seller, employees, advisors and buyer.
- All round value delivered to seller to increase deal price that also showed a credible path to the buyer.