Deal Flashcards
1
Q
CTI Foods
-Description of the Company
A
- one of the largest suppliers of custom protein and soup solutions
- largest products by volume are beef patties to burger king, soup to panera and subway and Taco meat to Taco Bell
2
Q
CTI Foods
-Problems / Risk (Operational / Financial)
A
- operational problems coupled with too much leverage
- operational: McKinsey should cost analysis led to significant margin compression in taco meat, several food safety issues that occurred in their owingsville, kentucky plant, operational issues at Liguria
- financial: the company was purchase by GS and TH LEE in 2013 from Littlejohn, too much leverage for new operational dynamics
3
Q
CTI Foods
-Assessment and Solution
A
- broadly, equity and management wanted to avoid a chapter 11 as much as possible - were initially engaged to explore liability management solutions; SLB
solution: - entered chapter 11, took leverage from 14x to 4x
- Mgmt. Change - put a new CEO in place, as well as several other roles
- Strategic Improvements - more collaboration, aiming to develop more proprietary recipes
4
Q
Sungard
-Description of the Company
A
- effectively a “server hotel”
- owned by a sponsor consortium of Blackstone, KKR, Bain, Silver Lake
- IT infrastructure: disaster recovery and business continuity management - duplicating data
5
Q
Sungard
-Problems / Risk (Operational / Financial)
A
Operational / Industry Issues
- Increasing competition from AWS, outdated sales model
- liquidity issues: declining revenue and margin compression
6
Q
Sungard
-Assessment and Solution
A
- Assessment: refinanced its cap structure, raised a liquidity patch and embarked on sale process in mid 2018
- Solution: ultimately filed for chapter 11, took them from 10x to 3x leverage, new post-reorg management
