The Process of Restructuring Business Essay Example | Topics and Well Written Essays - 500 words

The Process of Restructuring Business - Essay Example The several buyout funds that were interested in outright acquiring the firm would surely ensure a healthy payout to the shareholders however if these were sufficient to restructure the firm was unclear. Also, they would restrict the role of the founders. This led to a second option which was to attain leveraged recapitalization, as suggested by investment bankers. The downside of this option was the large scale of indebtedness and transactional complexity. This leads us to the most viable option for Fojtasek suggested in shape of a hybrid transaction by a private equity group from Boston, Heritage Partners; with the agreement leading to lower debt levels, control for the family, and majority ownership for existing shareholders. In July 1995, Randall Fojtasek—in partnership with Heritage Partners—undertook a considerable restructuring. The first step in this process of restructuring was acquiring Bishop Manufacturing, a vinyl window manufacturer in Northeast. This was seventeen months later sold to Hicks, Muse, Tate & Furst, a private equity firm in the United States that specializes in leveraged buyouts. At a 45% premium to the original purchase price the shareholder’s profited from the transaction and a small amount was reinvested into the firm. Heritage partners, also known as, Partners International (HPI) is a senior-level executive search and consulting firm that focuses on delivering superior work to a select group of clients globally in the life sciences industry. During the undertaking of the transaction, they were concentrating their efforts in raising follow-on funds of about 300 $ million. They were successful in their efforts and raised the amount from a variety of institutional investors such as Brinson Partners, the General Motors Investment Management Company, and the private equity arm of the Princeton endowment, Nassau Capital. It appears that Randall Fojtasek in the late 90’s had overcome the dilemma regarding the company he had faced in 95. Not only had he managed to remain CEO of the firm, now renamed to Atrium Companies but had also managed to retain a large equity stake in the firm.