A manufacturer of specialty foods sold primarily to national restaurant chains intended to grow its business, and in 2018, embarked on a capacity expansion project. During the installation process, the company lost significant volume from a few key customers, causing its sales to drop by 50 percent. There were also significant delays and cost overruns in the installation of its new plant.
By the summer of 2020, the company was losing $0.5 million of EBITDA per month. The owners no longer had resources to contribute to the company and the lenders were fatigued.
Novo Advisors was retained as the company’s CRO in August of 2020. Recognizing that the situation required immediate and decisive action, we acted quickly to stabilize the business. Within 90 days, Novo was successful in reducing the monthly EBITDA burn to neutral.
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