Organics Management

Organics Management

Roles
Financial Advisor
  • Restructured balance sheet 
  • Developed plan to secure funding
  • Equity partner provided new funding 

The company is an owner and operator of composting facilities and anaerobic digesters that accept organic waste from municipalities across North America. Its Canadian subsidiary performed below expectations, was subjected to regulatory challenges and closed a facility due to odor complaints, which drove a significant EBITDA decline. The company’s Canadian subsidiary retained CR3 professionals to project and manage cash flow for three local facilities, evaluate current operations and help formulate long-term strategic options for the business. The company successfully restructured its balance sheet and, with CR3's assistance, developed a rehabilitation plan to secure funding for and manage the cash flow of the subsidiary.

The Situation

  • Owner and operator of composting facilities and anaerobic digesters that accept organic waste from municipalities across North America
  • Customers include municipalities as well as retailers for branded mulch and fertilizer generated from the company’s facilities
  • Company’s EBITDA declined significantly as the Canadian subsidiary underperformed
  • Additional issues included regulatory requirements to reduce the height of compost piles and mothballing a facility in response to odor complaints

The Work

  • Company’s Canadian subsidiary retained CR3 professionals to project and manage cash flows for three local facilities, evaluate current operations and help formulate long-term strategic options for the business
  • Created and supported understaffed finance team in executing payment plans on vendors’ past-due balances
  • Projected long-term cash-flow needs, which required significant new investment in capital after years of underinvestment
  • Provided analytical support to the parent company’s management team during negotiations with debt and equity providers to restructure the balance sheet

The Results

  • Successfully restructured balance sheet
  • Developed a rehabilitation plan to secure funding for and manage the cash flow of the Canadian subsidiary
  • Company raised prices by over 50% on municipal customers, losing only minimal volume in the process, and subsequently the company’s equity partner agreed to provide funding to the Canadian subsidiary for investment in long-term prospects

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