Case Studies

After a few difficult quarters, a listed consumer products / industrial company entered into a debt restructuring agreement with its three largest lenders. Part of the plan included a capital increase by an existing shareholder, one of the world’s largest hedge funds, and a significant haircut on the nominal level of bank debt. Out of the three lenders, only two had accepted to refinance, subject to the new equity injection, while the third declined the option and decided to sell its exposure at a significant discount. 

At the 11th hour, the exiting bank realized they still owned a piece of the mortgage on the company’s headquarters. Given that the bank’s credit committee had clearly stated they needed to zero out any exposure to the company, the entire refinancing package was now at risk unless someone took on the partial mortgage risk in lieu of the bank. The remaining lenders and the hedge fund had already spent months negotiating the full refinancing and were not prepared to change any term or take on additional risk. The entire deal was hanging in balance.  

The company's management team asked us  in to identify potential alternatives to break the stalemate. In less than 24 hours, we brought to the table a Hong Kong-based distressed credit fund that acquired the exiting bank’s exposure in less than two weeks, allowing the full rescue transaction to go through.

One of the largest private equity firms in the world was preparing to exit from a multi-billion portfolio company via an auction. The challenge was that the company, a leader in the consumer ingredients sector, was missing an important product in its customer offering, materially reducing its value. Having worked with the portfolio company in the past, we had been monitoring the market for a long time to find management the ideal target. 

When the private equity firm was ready to move, we identified a family-owned business with succession issues; the founder, in his late 70s, knew the second generation had no interest in running the business. Over the years, we had built a solid relationship with the founder and convinced the management team to enter into exclusive negotiations with the portfolio company. 

Our relationships and the trust we had built with the various parties enabled the transaction to close in less than three months, filling out the portfolio company’s product line before the private equity firm launched the auction process. With its product portfolio complete, the private equity firm was able to fully exit their investment via a double-digit EBITDA multiple sale.

A long-standing client of our firm, a mid-market private equity group in Europe, called with a strategic issue: one of their companies needed to expand in North America and establish a direct presence to boost their international sales. The company’s board of directors provided Calit with a shortlist of potential acquisition targets that best fit their requirements.

Through our network, we reached out to the possible targets and brought two to the negotiation table. After a preliminary assessment, we zoomed in on one, which was also being heavily courted by a competitor. With our support, we convinced the target company’s management and shareholders that our proposal, albeit not necessarily higher in upfront price, gave them the best chance of closing the deal and realizing more value in the future via a special re-investment security.

Finalizing the deal across multiple time zones took longer than anyone initially expected, but the trust we built with our counterparts kept everyone focused throughout the process and ultimately brought the transaction to a close to everyone’s satisfaction and laid the groundwork for a successful future for all.

A 50-year-old family business in the precision tool sector had been underperforming because the second generation of shareholders did not agree on the company's long-term plans. We suggested to the CEO and 25% shareholder to buy out the other shareholders via a leveraged recapitalization. 

The family did not want the shareholder reshuffling to leak into the market before the official announcement to avoid any disruption to clients and employees which meant we needed to be surgical in the choice of the possible new financial partner.

In full alignment with the CEO, we called upon the senior partner of a private equity fund we’ve worked with that has a successful track record in the sector. After a few intense days of meetings, the fund was able to submit an offer that met the family’s expectations. 

Five months later, the company had a new set of owners and a completely different capital structure. With the full backing of the private equity fund, the business has started the consolidation plan the CEO had always envisioned.