Regardless of circumstances, whether it be the owner's health failure, the lasting impacts of COVID-19, or the inevitable end of an economic boom cycle, periods will arise when certain businesses become unable to continue profitably. In these situations, if the stakeholders are able to react timely, there is often value significantly in excess of liquidation value that can be preserved and realized. Employee and customer relationships can be preserved under new ownership and the business and the owner's legacy can continue.
In distressed situations, creditors often initiate the sale process, as lenders seek to liquidate their claims in a struggling company that represents an increased risk. Distressed companies with negative cash flow must often be sold quickly before they run out of cash, leaving liquidation as the only available alternative. For service companies where the company’s receivables are their primary asset, a transaction must be accomplished before customers become aware of the distressed situation and potentially stop payments.
Calder is uniquely positioned to handle small and lower middle-market-sized companies with revenues of $3M+.
Accordingly, a distressed M&A Advisor must have the resources and experience to move quickly and be able to assess the trade-off between time and value. Although the process of contacting buyers and facilitating due diligence is similar to that of a healthy company M&A process, the expertise required to facilitate a distressed deal is specialized. To manage a distressed company sale process the Advisor must:
- Work with the various parties in interest, including secured creditors, landlords, shareholders, directors, and management;
- Work in a compressed time frame to avoid an extended and expensive bankruptcy process;
- Position and articulate the value drivers that make the company’s assets attractive to a buyer; and
- Effectively communicate with the other professionals involved, including crisis managers, bankruptcy attorneys, bank workout officers, bondholders, and other parties in interest.
Calder Capital assists owners of distressed/struggling businesses to find a suitable buyer in a compressed period of time, thus preserving as much value and continuity of present operations as possible. Calder has the resources to make it happen, chiefly:
- Calder has closed multiple transactions in less than 3 months.
- Calder has relationships with asset-based lenders that offer financing for distressed businesses.
- Calder maintains a growing database of 150,000+ investors, owners, and professional advisors.
- Calder's website appears high in Google for "distressed" and "turnaround" business for sale searches, driving a continuous stream of buyers specifically searching for distressed sales.
- While most distressed sale M&A firms focus on companies with significant revenues ($30MM+), Calder is uniquely positioned to handle small and lower middle-market-sized companies with revenues of $3M+.
The biggest mistake that owners make is waiting too long. Liquidation is almost universally the worst option, both economically and emotionally.
Contact Calder today to get the process started immediately!
Meet John Harrington: Turnaround & Distressed Business Advisor
John Harrington joined Calder Capital in October of 2023. He is responsible for leading Calder Capital’s turnaround and distressed advisory practice and assisting other advisors with working through the distressed sale process.
John has more than 40 years of combined experience in bank management, executive leadership, and turnaround consulting covering a wide spectrum of businesses. John received his BSBA from Central Michigan University with an emphasis in Finance and Economics. His executive leadership and consulting background help his clients focus on maximizing the value of their enterprise while his banking experience allows for effective negotiations and communication with his client’s lenders and creditors.
Outside of the office, John enjoys outdoor activities such as boating, golfing, and skiing. He takes pride in his role as a father to two children, Alexander and Pauline. Being a Grand Rapids native, John is deeply involved in community service. He has contributed his time and expertise to various local charities, serving on boards and committees for organizations like Guiding Light Mission, West Michigan Refugee Education & Cultural Center, Economic Development Foundation, YWCA, and GROW. In addition, he has been involved with the United Way of West Michigan, Grand Rapids Chamber of Commerce, American Heart Association, Leadership Grand Rapids, and the Early Childhood Education Program.
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