National Voice and Data Communications Provider
New Life to an Old Business: Acquisition, Turnaround, Reorganize & Re-launch
KMJ Partners was engaged by a private equity group to evaluate a potential public to private transaction involving the purchase of a struggling provider of communications services to office buildings nationwide. The company had grown substantially from acquisitions in the previous 2-3 years but had never fully assimilated these acquisitions nor developed a strategy to grow the combined businesses.
Mr. Shingler evaluated the business and developed an integrated growth strategy to use Voice over Internet Protocol (VoIP) to connect the company’s service locations nationwide, centralize and strengthen operations to take advantage of scale economies, and re-launch the business with aggressive sales and marketing of new products and services. He led the development of an investment case based on this new strategy, took charge of strategic and operational due diligence during the acquisition, and actively supported the PE firm in meetings with governmental and regulatory agencies to gain the necessary approvals to complete the transaction. Upon closing, Mr. Shingler assumed the role of CEO to lead the company through the re-launch of the business.
In the first six months, Mr. Shingler recruited a new management team, doubled sales and reversed a revenue decline that had exceeded 7% per year in the previous two years. Gross margins were improved from 56% to 65% though improved network design and optimization of existing facilities. These initiatives doubled EBITDA from the core business and provided the necessary cash flow to hire the engineering and operations talent required to launch managed VoIP services nationwide. A more skilled technology sales force was hired and trained, and the new products and services were developed and sold within 18 months of the change in ownership. One early indication of the success of this new venture was their ability to take away a multi-year, multi-million dollar national account from a significantly larger competitor – AT&T.