Providing Sell-Side Transaction Services and Bankruptcy Support for a Healthcare Provider
Challenge
A national provider of healthcare equipment and services had been in the marketing process to be sold by an investment bank to repay its existing debt. Its rental assets were not generating enough revenue and profit continued to shrink each month. With the overall outlook for the medical equipment rental market unclear, potential buyers were skeptical regarding the company’s forecast of significant rental growth. Alternatives for reducing the company’s debt burden became limited after buyers declined to make offers.
The provider exited bankruptcy after a short 45-day period with a significantly reduced debt load and an achievable and realistic plan to meet its forecasts.
How we helped
Our team was engaged to support the company through the investment banking sale process. We provided the company and potential bidders with analyses on asset utilization and other key metrics that are central to equipment rental businesses. We collaborated with management to develop and report on liquidity by preparing 13-week cash flow forecasts and developing multiple versions of KPI analyses to provide a clearer picture of the company’s operations and business performance. As a result of this due diligence and working together with the company’s legal and investment banking advisors, board of directors and management team, the parties determined it was in the company’s best interest to effect a change of control transaction through a Chapter 11 bankruptcy proceeding.
We guided management through the bankruptcy process and managed all critical vendors and related payments to ensure no trade vendors or unsecured creditors were impaired. Additionally, we prepared and submitted financial schedules and key pleadings to the company’s legal counsel while providing required weekly and monthly compliance reporting to debtor-in-possession (DIP) lenders and the US Trustee’s Office.
Results
The company exited bankruptcy after a short 45-day period with a significantly reduced debt load, new owners, fresh liquidity, and an achievable and realistic plan to meet its financial forecasts and business goals.