Located in Atlanta, GA, the Company primarily provided over-the-road trucking services throughout the United States. At the time of GGG’s initial engagement in 2017, the Company employed approximately 160 people.
Despite significant growth in earlier years, the Company had struggled more recently to stay ahead of larger competitor carriers that, due to size, allowed for more favorable freight rates and the attraction of better drivers. The Company began incurring significant losses and made the decision to leverage its balance sheet to fund growing losses. In addition, the Company relied significantly on broker services in its sales mix. Often as much as 70% of freight was sourced by brokers that typically incurred a 10-15% fee.
The factors listed above, in addition to a variety of underperforming assets, resulted in significant losses for the Company. GGG Partners entered into an engagement to stabilize the business and establish the most appropriate path forward.
After initial meetings with management, GGG worked diligently to produce a detailed and accurate daily cash forecasting model to ensure that Company management were presented with a detailed assessment of their financial operations. Shortly thereafter, GGG sold a number of nonperforming assets to help generate the cash necessary for daily operations. Facilitating this was a new factoring relationship initiated by GGG that allowed the Company to benefit from higher advance rates. GGG worked with the Company in the creation of a disaster relief program that helped the Company to:
– Capitalize on advantageous freight rates
– Eliminate unprofitable transportation lanes
GGG further negotiated carefully with all significant creditors to ensure that they would hold their positions during restructuring so as not to threaten the vitality of the turnaround plan through the elimination of credit lines.
GGG was ultimately able to sell the business in parts to three different buyers. GGG’s strategic contacts in the industry resulted in significantly higher valuations than had first been anticipated. In addition:
– The majority of employee jobs were preserved
– All secured and unsecured creditors were paid off in full
– $3M was returned to the beneficiaries of the Company
– Many small local businesses were able to continue generating revenue through the provision of parts and services to the surviving entities