1. Restructuring

Professionals at ClearRidge have a solid understanding of the issues which affect business survival and financial strategy in distressed situations.

We serve midsize companies, working alongside our client’s managers, attorneys and bankers to evaluate the complex and highly pressured situations in short time frames.

ClearRidge is also a leader in acquisitions and divestitures for distressed companies, both in and out of bankruptcy court.

Led by Bruce Jones, CTP, a restructuring and turnaround expert for the last 30 years, ClearRidge’s Restructuring practice has the expertise and bench strength your clients need to navigate through these challenging times.

In economic and business downturns, failures are to be expected. Returning to profitability or salvaging viable assets involves a variety of options, choices and decisions for company owners, creditors, and stakeholders.

In these situations, ClearRidge Capital brings knowledge, stability and positive action to resolve the financial troubles.

ClearRidge’s Restructuring Practice continues to build on to its reputation for thorough and comprehensive advice and its ability to deliver creative and timely solutions. For clients, this translates into an efficient restructuring process and maximizing value for the stakeholders.

In the case of excessive debt, we negotiate directly with vendors and creditors to create a plan to satisfy debt obligations that are acceptable to all parties. Through planned asset liquidation and accounts receivable funding, we secure capital that the company can use to continue operating and move forward.

We also help create a business plan that details the financial strategy of the company and the steps critical to achieve success.

During times of fast growth or stretching to meet targets, many companies need to realign their debt structure with their ability to service their debt requirements.

ClearRidge prepares a realistic forecast of a company’s likely financial performance, including significant drivers that could impact on the achievement of the intended results.

We assist the owners and managers to develop a plan to improve the company’s performance, and present recommendations on the debt level the business can support.

In restructuring, bankruptcy and turnaround projects, we prepare for a divestiture of assets or a sale of the company in a parallel process to the main project. In the unlikely event that stakeholders determine that divestiture is the best way to maximize value, we are already position to go to market . Rather than delay a further 60 or 90 days to get ready for a sale, we are already prepared to go to market and are able to move very quickly. In distressed situations, time is money.

ClearRidge’s Restructuring services include:

•    Credit Negotiation
•    Recapitalizing debt obligations to equity
•    Capital Solicitation
•    Bridge or mezzanine financing
•    Forecasting and Financial Modeling
•    Business Turnaround and Restructuring Plans
•    Asset liquidation
•    Distressed Sale and Divestitures

2. Distressed Mergers, Acquisitions and Divestitures

ClearRidge Capital has extensive experience in changing ownership, asset sales, mergers and acquisitions for distressed middle-market companies. These situations may involve liquidating assets, or selling a company quickly and under extremely troubled circumstances, often in contested environments, in or out of bankruptcy.

While ClearRidge typically serves as the sell-side advisor and intermediary in these transactions, soliciting and negotiating the sale of the company, the firm has also advised the buyer acquiring a distressed company.

3. Recapitalization

A recapitalization is the partial sale of a company resulting in the payment of a cash lump sum, while the owner still retains minority ownership in the business.  In addition, the seller will typically be offered performance-related bonuses and stock options.

Many business owners choose this option, because they remove most of the financial burden and risk of owning the business, eliminate their personal guarantees and still get to participate in future profits.

Let’s say a company has an enterprise value of $25 million. A buyer may offer $20 million in cash to recapitalize (buy) the company, with an additional $10 million of stock in the company post acquisition. They are prepared to pay a higher price for the company, if you are confident to take a position in the new company and  receive an incentive to assist them in the transition.

Many entrepreneurs are ready for a cash lump sum to reward them for their efforts, and also feel that the business could use a new injection of capital, as well as new direction and leadership to continue growing the business.

The buyer often refers to recapitalization as “partnering with management”.  The owner will typically remain in day-to-day control of the company, but with a reduced workload and reduced stress.  This provides continuity for both the seller and the new equity participants.  The buyers bring fresh insight, expertise and capital to fuel the growth of the business.

4. Sale Preparation

Ideally, business owners should spend a couple of years planning the future sale of their company.

There is a big difference between a company that has been run for the owner’s benefit and a company, which has been running lean and efficient for a planned future sale.

Statistically, an owner is far more likely to get a higher price for their business if they can simultaneously solicit a broad range of offers from a variety of buyer types, so you want to ensure that your Company appeals to a broad range of buyers.

The goal should be to ensure that the company has been posting consistent sales and profit growth, the financials are clean and up-to-date and managers are prepared for the transition.

Services include:

•    Strategic and financial reviews

•    Financial analysis and recasting

•    Marketing and sales initiatives

•    Operational restructuring

•    Improving operating margins

•    Transition Planning

•    Implementation of Standard Operating Procedures

•    Reducing dependency on the owners

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