Liberating Value in a Deteriorating Business: DuraFiber Technologies
Situation: Competition Vitiates a Company's Business
January 08, 2019DownloadsDownload Case Study
DuraFiber Technologies (DFT) was one of the world’s leading producers of industrial polyester fibers and fabrics for a variety of applications such as tires, seat belts, hoses, tarps, awnings and nautical rope. Since 2004, It had been a privately-owned portfolio company of Sun Capital Partners (SCP), a U.S. global investment firm. At its peak, DFT generated over $900 million in annual revenue. However, after the 2007 – 2010 Great Recession, it began to struggle to compete with low-cost Asian producers. As a result, it required support to determine the best strategic path for its remaining six facilities in North America and Europe.
As DFT’s revenue continued to decline, and its cash position deteriorated, its secured lender, JP Morgan Chase, requested SCP to engage a financial advisor to analyze its liquidity, providing a choice of three firms. SCP selected FTI Consulting to help manage DFT’s liquidity constraints and improve the company’s cost profile, in order to retrieve optimal benefits for the company, SCP and its lenders when SCP additionally determined that a sale would make sense.
FTI Consulting and FTI Capital Advisor’s Role: Managing a Wind-Down and Sale
In November 2016, FTI Consulting and its investment banking subsidiary, FTI Capital Advisors, was engaged to begin the process of analyzing liquidity and selling both DFT’s domestic and international facilities and operations. At the same time, FTI Consulting’s Performance Improvement team began exploring cost-optimization strategies and supply chain improvements to stabilize the company’s cash position, while FTI Consulting’s Restructuring team monitored and advised all parties on the company’s cash flow situation.