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Interim and Transition Management: Managing during Crisis
Situation:
The owner of a $100 million automotive retailer and wholesaler was diagnosed with terminal cancer with only months to live. There was no succession plan in place and the owner's children were not interested in running the business. The Company had been performing at record levels and the owner needed a CEO who could take his place and manage the Company through the sales process.
Task:
LMG was retained as interim CEO to manage the Company through the sales process. LMG engaged an investment banker and worked with management to develop materials for the Confidential Memorandum. LMG also worked with management to maintain employee moral and the Company's record financial performance during the transistion.
Actions:
LMG implemented a change in control bonus program to provide incentives to the management team. LMG met regularly with the management team to provide updates on the sale efforts.
Result:
The Company was able to sustain its record financial performance through the sales process and retain all of its key employees. LMG and the investment banking firm were able to negotiate a sale which resulted in a price of 7.0 times the Company’s most recent EBITDA. The equity improvement was over six times from the value of the Company just four years earlier.
