12/01/2023
How a private equity firm turned around an installed-sales specialty dealer by hiring an exceptional President to take control of the business
EXECUTIVE SUMMARY:
A private equity-owned installed specialty product dealer was losing revenue and producing zero profit since the acquisition, with frequent turnover of leadership and lack of trust from employees.
The clear need was for a strong operator to drive a financial and cultural turnaround. Within Misura Group’s existing network was a proven turnaround expert in the installed residential building products industry.
The result:
Within 1 year, the new President gained the trust of the team, implemented new process improvements, increased sales by 20%, and improved EBITDA to 16%. The company is now poised to make its first acquisition due to this president’s leadership.
THE CHALLENGE:
PRODUCT COMPLEXITY
A building materials industry private equity firm purchased a $25m business with 25% EBITDA, not anticipating the level of complexity of the 100% installed, specialty residential product line.
INVENTORY LOSS
The ERP system was a paper ledger, and there were 25 different crews accessing inventory daily. This led to a $1.5m inventory loss in the first 6 months post-acquisition, with another $1m loss in 3 years.
LEADERSHIP TURNOVER
Within the first 4 years post-acquisition, the company had 3 different presidents and 2 different CFOs. Sales declined from $25m to $20m with zero net profit. The frequent turnover led to employees not trusting leadership, resisting collaboration and new process implementation.
OUR SOLUTION:
PROVEN TURNAROUND EXPERT
This private equity firm needed to hire a strong operator to take control of the failing business and provide both financial and cultural turnaround. Misura Group identified the following must-haves:
Installed residential building products experience
Strong team builder with proven ability to gain trust and drive culture change
Financial turnaround success
BUILDING MATERIALS INDUSTRY NETWORK
The advantage of focusing solely on the building materials industry – our network. Misura Group had an existing relationship with a proven turnaround expert in the installed residential product space. This operator is excellent with P&L and knowing which knobs to turn to increase profit. We were able to present this leader immediately resulting in a quick hiring process.
THE RESULTS:
The new President was able to engage with the team and gain their trust, initiating the cultural change that would lead to financial improvement. Within 1 year:
Sales increased to $25m and EBITDA improved to 16%
New process improvements including inventory tracking, job budgeting, and cost control
Implemented WIP accounting and performance-based billing
The Private Equity owner is currently staging for this company’s first acquisition due to this president’s leadership.
WHAT THE CLIENT HAD TO SAY:
“The Misura Group team has helped our firm hire the greatest talent from the building materials industry, connecting us with entrepreneurial leaders. The impact Misura Group has had on our success has been irreplaceable.”
WHAT THE CANDIDATE HAD TO SAY:
“For any professional navigating employment opportunities, there is always a level of ambiguity. The Misura Group team focuses on creating transparency and synergies that accelerate the learning curve. Misura Group is a true professional partner.”
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