SITUATION
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- Level Propane, a regional propane distributor, grew rapidly to $70
million in annual revenue (within the top 20 U.S. propane distributors)
from start-up 10 years prior
- The company served principally the residential
market in 13 mid-west states and New Mexico
- The company's cost-efficient
strategy was based on a central operating model with all marketing, sales,
customer service, delivery routing and dispatch, and all support functions
located in Westlake, Ohio
- Poor business decisions, lack of effective controls
and imprudent pricing forced the company into Chapter 11 reorganization
- An
auction produced no qualified bidder for the company
- Union Partners teamed
with an investor group to provide DIP financing and interim management
to bring the company out of bankruptcy
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RESULTS
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- Union Partners successfully transformed the company during
the remaining bankruptcy period and achieved positive EBITDA for the fiscal
year
- Union Partners with an investor group purchased the assets of the business
bringing the company out of bankruptcy July 2, 2003
- Union Partners and the
investor group packaged and sold the company to a large strategic buyer
on October 1, 2003
- The transaction generated a 25%+ return on three-month
equity investment
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ACTION TAKEN
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- Union Partners assumed management of the company and implemented
an aggressive transformation program
- Cost and pricing models, operating
budgets and key performance indicators were established and adhered to
with discipline
- Customer retention and re-capture programs and new customer acquisition
programs were implemented concurrent with rolling out a new company name
(Horizon Propane) and identity
- Creative fuel sourcing strategies were developed
and implemented to ensure supply during a record cold heating season
- Staff
was evaluated, trained and redeployed to capitalize on employee strengths
and eliminate redundancy
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