Exit For Family-Owned Chemical Concern
Spin-Off of Multinational Division
Turnaround of Multinational's Automation Division
Rejuvenation of Conglomerate Division
Turning R &D Project to Profit
Finding Alternative Funding for VC
LG10 Restructures Family Chemical Business For Exit to Bayer AG
An LG10 associate engineered a take-over and exit strategy for a family-owned specialty chemicals business. An initial analysis revealed that competition from large multinationals and the company's lack of economies of scale yielded a neutral-to-loss making business-to-business revenue proposition. Although the firm had produced several environmentally-friendly and market-oriented products, sales volume and profits were low.
The LG10 associate's research found that the company's customer base growth had stagnated and that it had entered a phase of declining turnover. From the results of a market study and a new market communication campaign, a new business plan was implemented to rejuvenate operations, revenue and growth. Functional areas were reorganised, from sales and marketing to the implementation of new IT and logistics systems, in order to facilitate entry into the consumer market segment. An exit strategy for the holding family was developed with growth through acquisition by a new owner as the optimal mechanism. LG10's associate lay the groundwork for introduction of the company to a number of large European market players who lacked presence in the company's geographic market segment.
The key changes to realize the strategy were realized in 6 months and were driven by an Enterprise Resource Planning (ERP) system. By focusing on a profitable niche market segment, a 12% market share was realized. The impressive results from the business and product reorganization campaign led the company's main competitor, Bayer AG, to make an offer and eventually acquire the company in a deal which exceeded the owner’s expectations.
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LG10 Associates Develop Strategy for Philips Spin-Off
Following corporate management's realization that the Philips Test & Measurement division was on an increasingly diminishing path of profitability, the decision was made to sell off the holding to external investors. To prepare the holding for sale, LG10 associates were asked to evaluate the company's current operational strategy given the goal of a successful divestiture.
In interactive analytical and strategy formulation processes with the division's management team and employees, strategy scenarios were developed to identify and leverage current competencies.
Results from the strategy reformulation led to the company being restructured into two divisions, with one dedicated to studio equipment and the second to digital broadcasting. With the company divided along these competencies, each division was sold to ew parents specialised in the niche markets, thereby securing not only a successful exit for the investor, but also a future for the original division's employees.
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LG10 Manages Turnaround and Sale of a Philips Subsidiary
After years of excellent, well-managed financial performance, an automation systems subsidiary of Royal Philips Electronics was faced with a crisis. The subsidiary's owner no longer saw complementarity between the company's mission and the overall organization's long-term strategic plan. The decision was made by the owner to exit the enterprise with maximum profit and minimum executive involvement.
An LG10 partner, who was at the time on assignment at Philips, was called in to prepare the company for sale and find buying prospects for the divestment. Together with the subsidiary's management, the LG10 associate crafted a new business and turnaround plan to make the company attractive for purchase through elimination of value-draining activities.
The LG10 partner's plan reduced costs for the firm and provided a sound sustainable business growth model, providing an attractive acquisition to an IT service company that further invested into the subsidiary for future growth. Through the LG10 associate's plan, the high costs of a cold closure and subsequent negative PR were avoided, and staff was retained to all parties' best interest.
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LG10 Develops Partnerships for Danish Enterprise
A national sales subsidiary within the Metra Corporation conglomerate was in a protracted loss-making trend. Later, in addition to the bottom-line impact of a demotivated organisation, the subsidiary became insolvent. Through this difficult period, the firm's main competitor had achieved a monopoly position, enjoying substantial control of the distribution channels and therefore access to customers. Although the situation required it, the corporate owners were not willing to invest into the subsidiary to reverse the situation.
An LG10 partner was called in on an interim basis to re-develop the company to solvency and growth. The organisational structure and processes were changed to address customer needs in tandem with those offered by the competitor, and the organization was re-energised through an innovative change management plan. With the absence of direct investment from the corporate owner, the LG10 associate acquired local financial institutional investment in the new business strategy, and secured additional staff to support the new growth strategy.
Following implementation of the business renewal plan, revenue for the subsidiary grew 26% through business expansions involving partnering and alliances. Threatened by the expansion, the competitor approached the subsidiary and, two years later, merged their operations to create a new entity, Assa Abloy.
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LG10 Turns R&D Project to Profitable Business
A two-year product development project in telecommunications equipment was scheduled for termination by Philips Electronics after several years of investment. An LG10 associate was brought in to review the current situation and design and execute a new business model to see if the operation could be turned to profit before the termination deadline.
Following a detailed analysis of the project's state of market readiness, the LG10 associate crafted an innovative business case involving new business models and financial plans to jump-start the project into commercial viability. The company entered in joint product development together with dominant market players in the mobile hand-set industry, and secured internal investment funding for manufacturing ramp-up and distribution. LG10's associate built executed the strategy through building a small, agile and effective organisation.
As a result of the plan's implementation, the company gained corporate and customer acceptance of the project's re-engineered business proposal with project engagements leading to initial sales of Euro 10 million with expansion to over Euro 100 million in two years. Through the findings of marketing research and price point analyses, significantly higher margins were achieved than previously expected. Over the same time period, the company realized several successful partnerships throughout its value chain.
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LG10 Develops Core processes for Seed Capital Fund
An internationally recognised venture capital company specialising in early stage start-up investments required a solution to find additional funding to finance their existing portfolio holdings. Equally important to the client was a complementary solution that could enhance their business creation processes so as to accelerate the development time of startups to sustainable, stand-alone businesses geared to quick and safe exits.
An LG10 partner was brought in to establish methods and processes to simultaneously enhance the performance of current holdings and facilitate the creation of new businesses in their portfolio sectors.
As a result of LG10's work in revamping business creation processes, the VC firm was able to secure Euro 4 million funding from institutional and professional investors.
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