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Client Situation
Since 2005, HLB Gross Collins has provided tax and consulting services for a Cobb County engineering and services company that provides operations services to energy, manufacturing, and industrial clients. The company, which also offers global outsourced consulting and team augmentation services on energy projects, recently expanded internationally and has been actively searching for other companies to acquire.
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Client Situation
A group of investors interested in purchasing an industrial adhesive manufacturing company engaged HLB Gross Collins to provide due diligence and merger and acquisition advice. In June 2004, the investors purchased the company for $2.8 million. Sales were $3 million at the time of purchase.
What HLB Gross Collins Did
The new owners asked HLB Gross Collins to advise them on ways to make their acquisition more profitable. After a thorough analysis of the company, which had numerous financial and operational issues, the HLB Gross Collins team was able to add considerable value through recommendations which resulted in:
- Implementation of a new accounting platform
- Implementation of new inventory cost accounting and tracking software
- Training of team members on the new systems
- Implementation of new planning, budgeting and strategic initiatives
- Hiring of new sales personnel
- Hiring of new CEO
- Moving the facilities to a new manufacturing and warehouse location
Results
As a result of changes recommended by HLB Gross Collins, the company’s revenues grew to $15 million – a five-fold increase over 2003 revenues in under 30 months. In September 2006, the owners sold the company to a large Fortune 50 firm for an all-cash deal of $18.5 million – over five times its purchase price in 2004. From the company’s acquisition to its sale, HLB Gross Collins teams assisted with critical decisions and added value across functional areas of tax, audit, consulting and IT.
Also, as a result of HLB Gross Collins’ creative thought leadership and recommendations, the seller continued to own 10 percent of the new holding company, keeping experienced talent within the organization, and reaping the benefits of any increase in value.
For more information about how HLB Gross Collins can help your business, call us at
770-433-1711.
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Client Situation
When a landscape materials company engaged HLB Gross Collins to provide tax and business advisory services, one of the firm’s first steps was to review the company’s latest tax return. It was discovered that the previous CPA firm had not utilized Section 179, which allows taxpayers to accelerate the depreciation of newly acquired fixed assets purchased throughout the tax year.
What HLB Gross Collins Did
By amending the return, HLB Gross Collins secured a $20,000 tax refund for the company. Now considering the firm as an official member of its team, the company engaged HLB Gross Collins to perform an analysis of existing internal controls over inventory. The cause for large inventory adjustments being recorded monthly had not been determined.
After performing on-site field work to document the company’s existing internal control environment, HLB Gross Collins created detailed recommendations to fill in all the gaps in inventory controls. Once the recommendations had been completed, the team met with the company’s management, sales staff, yard staff, shipping staff, and accounting department to discuss the implementation of the new recommendations. The team wanted to ensure that the new procedures would not hinder business or customer satisfaction.
Results
The company is currently implementing the new inventory internal control procedures. Management feels confident that monthly inventory adjustments will become a thing of the past as the company continues to grow and become even more profitable.
For more information about how HLB Gross Collins can help your business, call us at 770-433-1711.
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