Organics Management

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

Role(s)

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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Overview

  • Energy
  • Assessments

Engagement Team