ARLINGTON MACHINE & TOOL CO. – This 52 year old, family owned and operated precision machine shop had an impressive list of customers, including Boeing, Lockheed Martin, and Sikorsky, but had been negatively impacted by a divestiture that took too long and cost too much to complete. A decline in sales and an inadvertent overstatement of inventory report caused the lender to cut off funding and this lack of working capital put the Company in significant distress. It was on the verge of losing the ability to serve customers and a shutdown of operations and piecemeal liquidation were looming.
SC&H Capital was retained and quickly completed an exhaustive marketing process and identified multiple groups that were interested in purchasing the Company. An offer from a private equity group with a platform in the industry was accepted as the stalking horse and subjected to overbidding, and was ultimately successful. Additional challenges regarding substantial tax implications to the owners were mitigated and the transaction closed, providing recovery for creditors far in excess of a liquidation. Operations continued without interruption to employees, vendors, or customers.