How a $600 Million Telescopic Tractor Company Raised a $60 Million Line of Credit in Three Months

Situation

Having your CFO leave abruptly is never good. Having it happen while you are in the middle of trying to raise a $60 million line of credit ahead of selling the business is, to say the least, poor timing.

The company needed help obtaining the line of credit and also fixing cash flow issues so that the sale could go forward as planned. This was on a tight deadline to ensure the sale. Within three months, they had $60 million and the sale provided good ROI to the shareholders.

Actions

Due to the scope of the problem, our MetaExpert, David, worked with the company full time for three months. In fact, they asked him to stay on as Vice President of Operations until the sale was finalized, which lasted another year and a half.

As interim CFO, he had to come in and assist their executive team and their board of directors, who were venture capitalists and thus didn't always have the same goal as the bankers. They already had all of the expertise they needed, but they needed somebody to bring it together and also deal with Wall Street. This was a publicly-traded company, so there were a lot of outside actors. It required people skills and the ability to bring disparate stakeholders together. It also required a strong focus on earnings per share, because that was how it was made to look good.

Results

Ultimately, David achieved the goal set by the company of raising the $60 million line of credit. Thankfully, he was dealing with some very competent people with no weak links or other issues. However, everyone had different levels of concerns and risks.

It only took three months to raise the line of credit and to merge with the larger company. Everyone involved got the ROI they were hoping for!

Return on Investment

The ultimate ROI for the company in this case was the final sale of the company and increase in value of the shares. The $60 million that came in was small compared to the $600 million at which the company was, in fact, valued.

This was a short-duration project with a long-term ROI.

Project Details

David brought important skills to this project. The required skills as interim CFO were:

  • The ability to hit the ground running and quickly learn what was required.
  • Strong people skills to handle the disparate stakeholders and negotiate between different entities. He had to connect to people where they were and understand their concerns.
  • The ability to be, first and foremost, a good accountant.
  • Exposure to a variety of corporate boards, understanding how they worked. He had to spend time with the boards of different subsidiaries, which each had their own culture and purpose.
  • Experience raising money.
  • Experience working with bankers and attorneys.
  • Skills at making presentations. He had to continually show target goals, what the current price per share was, and how close they were to getting the line of credit. He also had to work on projections of cash flow and capital purchases. He did this on a whiteboard in the corner of his office.

In fact, David did such a good job he was never called to task by the venture capitalists, which is quite an achievement. It says that he was very prepared and used fact-based, believable presentations to make the case for what needed to happen.

Contract Length

The initial contract length was three months, but David was offered a permanent position of VP of Operations in one of the divisions. He stayed on until the sale was completely finalized.

Manufacturing Insights Magazine named MetaExperts one of 2020’s Top 10 Lean Manufacturing Solutions Provider

Read Article Now

Ready To Get Started?
Schedule a Call Now

Get MetaExperts™ & Get it Done Now

With one phone call, email or clicking a link to schedule a time to speak with the MetaExperts™ sourcing expert. You are just minutes away from getting your improvement initiative started or re-energized.

Contact NowBecome a MetaExpert

©2021 All rights reserved, MetaOps, Inc.

Address

Corporate Address:
10343 RS Avenue
Mattawan, MI 49071
Canadian Address:
168 Blvd Beaconsfield, Beaconsfield, QC H9W 4A1
Mexico Address:
Haciendas del Cortes. Ext. 502 Interior 31
Colonia Haciendas de San Juan
San Juan del Rio
Querétaro, Mexico C. P 76830

Support

734-425-1455
experts@metaexperts.com
envelopephone-handset linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram