$100 Million Equity Investment Facilitated by AccuVal Appraisal; Capital Structure Optimized by Maximizing Leverage on Inventory Revolver
Client: Private Equity Firm
Challenge: Value Unique Inventory Located in the United States and Europe
A private equity firm interested in optimizing the capital structure of a pending acquisition turned to AccuVal for an appraisal of an internationally recognized manufacturer of high-quality men's footwear and accessories. A critical component of this $100 million transaction was the evaluation of the inventory located throughout the U.S. and in Italy, as well as raw material, work-in-process and finished goods inventory in the company's manufacturing facility and warehouses. The inventory was unique. Unlike other footwear manufacturers, the company offers shoes in more than 100 sizes and width combinations together with shoe trees and racks, tie racks, hangers, belts and shoe care products.
AccuVal Approach
AccuVal suggested an innovative approach to appraising the company's inventory so its full value would be recognized for lending purposes. In addition to conventional methodologies used to value the stock at the plant and distribution warehouses, AccuVal executed an integrated Going-Out-of-Business (GOB) liquidation strategy to accurately evaluate the company's inventory at 26 retail and outlet store locations. We also quantified the cost associated of acting on the customized exit strategy by performing a detailed expense analysis and Stock Keeping Unit (SKU) level turnover analysis at the store level for all locations.
Bottom Line: Capital Structure Optimized by Maximizing Leverage on Inventory Revolver
The company successfully attracted a $100 million dollar equity investment to further grow its prominent brand, and the private equity group effectively leveraged their position utilizing AccuVal's valuation strategy. All parties to the transaction, including the global investment bank and global asset-based lender, were complementary of our work, approach and responsiveness.
The AccuVal AdVantage™
Strategic thinking. Ability to provide integrated solutions with real world application. Intimate knowledge of inventory values at manufacturing, wholesale and retail levels. Logical exit strategies. That's The AccuVal AdVantage™ at work.
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