Business

Premium Plastics, Inc. is a leading US manufacturer of disposable patient care utensils used in hospitals and nursing homes.

Client Objective

Premium Plastics had experienced deteriorating profitability resulting from changes in its competitive environment and increases in its material costs. The advent of hospital purchasing groups put pressure on pricing and reduced contribution to manufacturers. White Oak Group was engaged by Premium Plastics to advise the owners on issues relating to profitability and to explore strategic alternatives to restructure the business or pursue the sale of the Company.

White Oak Group provided financial and management services. As Chief Restructuring Officer we negotiated a forbearance agreement with the secured lender, operated the business within negotiated liquidity constraints, explored strategic alternatives and pursued the sale of the Company.

Client Objective

Premium Plastics had experienced deteriorating profitability resulting from changes in its competitive environment and increases in its material costs. The advent of hospital purchasing groups put pressure on pricing and reduced contribution to manufacturers.

White Oak Group was engaged by Premium Plastics to advise the owners on issues relating to profitability and to explore strategic alternatives to restructure the business or pursue the sale of the Company.

Results

By reducing manufacturing costs and increasing contribution we were able to operate the business with positive cash flow while strategic alternatives were explored. As a result, the Company’s senior lender experienced increased collateral coverage and was able to expand the Company’s term debt facility.

Cyclical trends in resin costs, structural changes among industry customers (a growing concentration among distributors and the advent of purchasing groups which now controlled the purchasing for more than half the hospitals in the US) shifted competitive advantage to manufacturers with greater scale. Ultimately, White Oak Group structured a transaction which combined Premium Plastics’ business with a major industry participant to achieve scale and a broader product mix, and to gain power relative to these purchasing groups.

Transaction value achieved was significantly above prevailing market multiples.

Acquirer

Medegen Medical Products, LLC (sponsored by Nautic Partners LLC )

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