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Winding-down an ice manufacturing subsidiary to re-position a company’s operations​

Key metrics:
  • Successful wind-down of specific business units with managed liquidity​​​
Value levers pulled:
  • 13-week cash flow forecasting​
  • Liquidity management​
  • Value creation measurement​
  • Interim & crisis management​

Picture this...

You’re a family-owned business that has had considerable success operating cold storage warehouses across New England for three decades. The facilities also house a bagged ice manufacturing, sales, and distribution operation. However, increasing competition and rising costs have led to unprofitable performance in the ice business. This is compounded by below-market fees to tenants, selling bagged ice at prices lower than cost, and a reliance on manual labor that increases maintenance expenses. Your principal has been funding the losses from personal savings—estimated to be several million dollars. ​ Although there is significant value in the real estate that houses the ice business, the real estate was pledged as part of a $2.5M credit facility and is owned by your principal with his family, while the principal maintains sole ownership of the ice business. The ice business is the majority tenant and cannot pay market rent, which creates stress among the stakeholders. A court-appointed conservator is installed when the principal falls ill.​

You turn to Accordion.

The conservator hires Accordion to assess strategic options. Given the extensive deferred capital required to upgrade the facility and the continued operating losses, we recommend selling the customer base and winding down the operating business to allow your company to repay outstanding debt and repurpose the real estate. ​

Your value is enhanced.

With Accordion’s assistance, the ice business distribution accounts were sold as a going concern and all other assets were monetized with the rapid wind down of the balance of operations. This allowed for the real estate to be repurposed for 3rd party storage tenants who could pay market rents. As part of this process, Accordion prepared business plan scenarios, evaluated strategic options, assisted in managing liquidity, aided with stakeholder communication, and supported the management of the wind down activities.​

Enhanced value:

You reap multiple benefits, including:

  • ​​​Successful wind-down of specific business units with managed liquidity​