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 Software Design Company
Turnaround of a software design/engineering roll-up of
seven companies sponsored by two private equity firms who invested $70 million on top of $30 million of debt from a bank syndicate. The company saw annual revenues of
$55 million decline to $8 million over an 18 month period, causing it to default on its debt. McShane Group successfully worked with this customer to achieve the following;
- Closed three offices and significantly reduced headquarters' staff in order to increase overall staff utilization
- Reduced salaries across the board (with senior executives taking larger percentage reductions), increasing gross margins to economically acceptable levels
- Generated total annual operating savings of $4.3 million
- Stabilized operating cash flow, ending an annualized cash drain of $2 million
- Negotiated buyout of bank debt; bank group exited relationship
- Introduced previously missing long range planning function
- Improved company's internal procedures, resulting in greatly enhanced interdepartmental teamwork and greater efficiencies
- Minimal loss of key people
- Equity eventually purchased from private equity sponsors by several key executives of company
- Company is in business today and growing, with its software designs incorporated into products found in many homes throughout the world
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