Business

Homak Manufacturing Company, Inc. was a leading manufacturer of Tool Chests and Roller Cabinets, Home Security Cabinets and Gun Safes, and Medical Carts sold throughout North America into large national retailers, distributors and OEM’s.

Client Objective

Consolidation among national retailers and alternative sources of manufacturing capacity offshore diminished sales and eroded margins. Our charge was to evaluate the strategic alternatives for the business and maximize the outcome for the family owners who personally guaranteed senior debt.

Results

Committed overhead levels mandated an increase in contribution margin on long term contracts and pricing to big box retailers. Failing to re-negotiate pricing, the Company pursued other strategic alternatives. Ultimately, White Oak Group structured a resolution which separately sold real estate and machinery, a product line, and the brand name. The transaction value achieved ensured a full recovery for the senior secured lenders, allowed for the extinguishment of the personal guarantees and a return of pledged collateral over and above the firm value.

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