Arlington Machine & Tool Company – 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 an inventory report caused the lender to cut off funding that the company used for working capital, putting the company in significant distress. The company 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 investment 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.