We had several acquisitions working in March when everything shut down and were not expecting to initiate any new engagements until late summer. However, we did start discussions on a new acquisition at the end of May. Surprisingly to us, the response was overwhelmingly positive and, as of last week, we have nine bona fide offers to acquire this company, five of which are at or above pre-COVID market value. How could this be?
Most troubled companies share a common denominator: excessive debt and management indecisiveness. That doesn’t mean lack of desire to perform. It does, however, mean that there have been some fundamental issues, strategy mistakes or procrastination among senior management in the months or years leading up to that point. You could write several books on the lists of reasons that companies get into trouble and in a career of restructuring troubled companies, there are many stories to tell. In this article, we discuss 6 areas of focus for a troubled company: 1. Cash management 2. Profit and profitability 3. Controlling costs 4. Fixed Assets and Inventory 5. Accounts Receivable 6. Debt