Restructuring concepts and expert restructuring reports

Entrepreneurial action is based firmly on intelligent concepts. Particularly high standards apply in times of change. In such situations, not only a sustainable future strategy must be developed, but the status quo must also be transformed. In best-case scenarios, such a process takes place during a period of positive results and stable financing. However, if initial drops in results are identified and financing is increasingly strained, then restructuring is needed. When restructuring a company, or major parts of it, there are particular requirements that must be observed. This is a special situation in terms of economics, finances and legal aspects. All actions taken towards customers, suppliers and financing bodies have direct consequences. An orderly and efficient restructuring process therefore requires a firm restructuring concept that meets the requirements of BGH (Federal Supreme Court of Justice) jurisdiction, and is also in line with IDW S6 standards. These are the prerequisites for decisions on further financing and restructuring. CIC Consultingpartner provides restructuring concepts based exclusively on IDW S6 standards and provides expert reports in accordance with current BGH jurisdiction. Reasons for the crisis and the need for change are identified, and finances budgeted in close cooperation with the company. Here, special focus is placed on the reassessment and realignment of the business system and on measures for improvement of the operative result. CIC Consultingpartner stands for tailor-made restructuring concepts of outstanding quality and feasibility.

Services

  • Planning and structuring of concept development in accordance with applicable BGH jurisdiction on the basis of IDW S6 standards
  • Identification of reasons for crisis and assessment of the crisis stage
  • Assessment of liquidity situation and preparation of liquidity forecast
  • Stabilising liquidity situation through cash-management optimisation
  • Monitoring and hedging legal risks
  • Reassessment of business system and adjustment of strategic alignment
  • Optimising organisational structures and business processes
  • Planning restructuring measures (measure-implementation management) and implementation of immediate measures
  • Budgeting restructuring measures
  • Elaboration of integrated three-year plan
  • Determination of financing needs and requirements for financing
  • Implementation of a programme of measures
  • Provision of an expert opinion regarding restructuring potential in accordance with BGH jurisdiction


Turnaround Management

The success of a restructuring concept ultimately depends on its ability to be implemented. CIC Consultingpartner restructuring concepts have been operationalised with extreme time and care, and thus provide the best preconditions for successful turnaround management. In comparison with normal implementation setups, turnaround means change implementation in difficult circumstances. Daily business is under tight scrutiny by customers and suppliers, liquidity is limited, and management is under two-fold pressure. Implementation measures force virtually all business areas into the background, and frequently generate uncertainty among the workforce. CIC Consultingpartner turns those affected into those involved. CIC consultants work as a rule in mixed teams together with the workforce, thus providing an optimum mix of external knowhow and internal competence. Outstanding functional consultancy expertise supports implementation and, if so wished, management responsibility can be assumed within the CRO function. Successful turnaround management is, above all, rapid. This is why CIC Consultingpartner installs powerful measure-implementation management right from the start in order to create both transparency and security. Proven methods and efficient tools are drawn on so as to efficiently control liquidity, reduce costs and increase sales performance. Mutual success generates even more success. Growing self-confidence and motivation strengthens the management system, so that support from consultants can be reduced. A company „comeback“, sparked by its own power and resilience deserves recognition. As a result, CIC Consultingpartner sees turnaround management not only as resolving crisis, but also as implementing a sustainable, value-added process.

  • Developing a restructuring concept and deriving a programme of measures to increase value
  • Optional involvement in management-body responsibility (CRO / CFO)
  • Steering and accompanying M&A processes
  • Carrying out implementation organisation
  • Coordination of those internally and externally involved in restructuring
  • Steering and control of measure implementation
  • Organisation and support of internal and external communication
  • Mediation with various interest groups


Operational Excellence

Value-added structures that have hitherto worked are changing ever more rapidly within the framework of global competition and are subject, in part, to radical changes. New competitors are conquering the markets with new technologies and sales methods. This development is intensified by the effects of low-wage countries and subisidies. The saying still goes: „Time waits for no man“. In the past, however, changes took place more slowly and were usually one-dimensional. In the meantime, the majority of changes display a high degree of complexity. Isolated improvement measures are thus no longer sufficient. Operative excellence applies to the entire value-added chain of a company. This is why CIC Consultingpartner takes an integrated approach to improving the offer range, according to customer-specific needs on the market. A range of functional programmes are syncronised and combined individually with each other. The effect is thus heightened and more broadly based.

  • Implementing cost-reduction programmes
  • Introducing lean production
  • Optimising the supply chain
  • Increasing organisational efficiency
  • Optimising the product and services catalogue
  • Increasing sales efficiency
  • Improving pricing and margin management


Private Equity Services

The German market for company takeovers is growing increasingly complex and demanding. The ongoing good situation in terms of economic development, combined with a high level of liquidity, is leading to a drop in offer numbers with ever-increasing purchase prices. A reasonable return on investment is becoming more and more difficult to attain during the normal holding period. In addition, the “drop height” greatly increases where risks are under-estimated. Normal financial leverage and the harvesting of “low hanging fruits” is thus no longer sufficient in complex and expensive takeovers. Operational leverage then becomes a vital factor for success.

Minimizing risks and increasing value are the central levers to any transaction. An appropriate purchase price and systematic development of performance guarantee the envisaged return on investment. A successful purchase phase demands rapid and meaningful due diligence. Here, the key to success lies in detailed and efficient analyses, in which all areas of competence (financial, commercial and operational) are optimally tuned to each other.

To master this degree of complexity, it is vital to have a coordinated and, above all, experienced team. CIC Consultingpartner have all the skills and experience needed to effectively support such a transaction process. Our team, consisting of financial auditors, engineers and experienced turnaround managers, takes charge of the financial, commercial and operational due diligence. For legal and tax due diligence, we have recourse to our well-proven specialist network or we create well-functioning interfaces to professional partners. Our emphasis lies on the analysis and plausibility checking of strategic orientation, the business system and operational competitiveness. It is here where the potential lies for further increases in company value. Many years of experience enables us to rapidly pinpoint where and how the EBIDTA of a company can be increased and cash flow improved.

Overload on the existing management following a takeover can often impede the implementation of necessary measures. With our Transformation+ approach we relieve strain on management and focus on the change process. Professional change-management specialists drive value increases and, at the same time, prevent negative impacts on the traditional business. It is generally sufficient to install a team of three turnaround managers in the company for a limited period, whereby, if required, responsibility for management functions can also be assumed. In this way, CIC Consultingpartner both support and ensure the realization of potentials and the successful development of the company – right from the start.

Commercial Due Diligence

  • Analysing strategic focus and business models
  • Scenario development regarding market and competitive competency
  • Analysing customer and supplier portfolio
  • Forecasting market developments and market
  • Validation of turnover- and sales plans
  • Validation of pricing and margins
  • Analysing customer and product revenues
  • Evaluating cost structures and organisational efficiency
  • Identification of growth and optimization potentials
  • Evaluating take-over and integration risks
  • Determination of critical deal issues / potential deal-breakers

Operational Due Diligence

  • Evaluating manufacturing equipment and production processes
  • Technology assessments
  • Evaluating quality management systems
  • Evaluating procurement organizations and processes
  • Evaluating maintenance management systems
  • Evaluating supply chain management
  • R&D assessments
  • Validating the company’s investment planning / capital expenditure
  • Evaluating the achieved degree of digitalization
  • Evaluating take-over and integration risks
  • Determination of critical deal issues / potential deal-breakers

Financial Due Diligence

  • Analysis of Balance sheet-, P&L- and cash flow-situations
  • Assessment of the company’s financial strength and forecast-reliability
  • Comparison of (financial) periods adjusted for particular factors
  • Comparison of Sector KPIs
  • Assessment of tax effects
  • Validaton of budgetary planning
  • Assessments of financial instruments
  • Evaluation of cash flow-development and management
  • Assessment of risk management systems

Transformation+

  • In-depth analysis regarding insufficient corporate performance
  • Development and implementation of improvement programs
  • Evaluation of the management team and corporate organization
  • Securing of the turnaround process with task force teams (up to 3 managers)
  • Temporary assumption of management functions like CEO, CRO and CFO

Options Analyses

The saying „the journey is the destination“, also applies to change situations. Before starting to develop a concept, all fundamental options for action should be thoroughly investigated. This applies not only to decisions on expansion, but also to consolidation or turnaround implementation. Priority here is always given to directional questions relating to company structure, shareholders and financing. Typical examples of this are regulating company succession, bringing in new shareholders, deciding to increase company equity or a takeover. Early analyses of the options available create transparency and show existing scope for action. They are based on targeted analyses of the sector and functions, and the resulting individual modules are then combined step-by-step to create a full picture. CIC Consultingpartner, with its interdisciplinary approach, provides a vast spectrum of specialist competencies and skills. All essential commercial, financial, legal and technical matters can thus be processed both professionally and efficiently. In a multi-stage process, CIC Consultingpartner creates various scenarios and identifies their financial impacts. The results are discussed in parallel with the relevant decision-makers in the form of workshops, and the decision-process moderated. Here, the clear objective is always the optimum economic solution combined with broad consensus.

  • Carrying out Independent Business Reviews (IBR)
  • Assessing existing restructuring reports (Second Opinion)
  • Plausibility assessment of business plan (Plan Approval)
  • Preparing audits (commercial, financial, production)
  • Reviewing business models and company strategies
  • Developing scenarios for investment and restructuring
  • Preparing and accompanying regulations on succession


Financing

Without sound financing neither growth-strategies nor successful restructuring can work. The financing requirement, in the situation given, must be clearly determined and chronologically ordered. If a restructuring concept already exits, the level of financing needed is derived by means of an integrated three-year plan, and is the starting point for negotiations with financiers. CIC Consultingpartner supports and assists these negotiations by providing the necessary information, and by developing proposals that are open to compromise. The goal is to find solutions that safeguard the restructuring process and, at the same time, limit the financial burden and risks. CIC Consultingpartner takes over responsibility when objectifying matters relevant to decision-making, as well as providing neutral support in negotiations. This starts with continuing existing loan agreements through to renegotiating follow-up financing with adequate contractual credit agreements (covenants), also in accordance with LMA standards. In this way, both company and financiers reach a common understanding of what is needed and when for the turnaround. In the case of financial re-orientation required for implementation of a growth strategy, possible alternatives for action should be assessed in advance within the framework of an options analysis. In this way, equity-capital options can be compared with alternative forms of external financing. CIC Consultingpartner supports measures on the capital market by providing the relevant information necessary. In general, an IBR (Independent Business Review) is expected for further-reaching financial measures. Here, alongside a comprehensive overview of the company and its asset and financial situation, further development is depicted in an integrated planning concept. IBR is regarded as an internationally acknowledged and applied method that CIC Consultingpartner recommends and implements as the market standard. CIC Consultingpartner supports the process of choosing from offers for external financing by means of a structured selection procedure and, if necessary, develops proposals on which to base decisions.

  • Developing strategy-conformant concepts for financing
  • Identification and selection of suitable financing partners
  • Identifying and assessing alternative financing options
  • Obtaining, evaluating and comparing various financial offers
  • Preparing suitable documentation for decision-making in financing negotiations (IBR)
  • Neutral facilitation in negotiations on financing
  • Follow-up negotiation of loan agreements (covenants)


Digitalisation

Digitalisation is no fashion craze, but rather a major success factor in terms of global competitiveness. Market leaders in all sectors have meanwhile digitally transformed their business models. Wherever there is the need for change, digitalisation is thus the overriding topic. This goes for the development of growth strategies as well as for considerations regarding digitalisation options in turnaround situations. CIC Consultingpartner is specialised in operative consultancy in change situations, and has the capacity and skills needed for digital analyses and digital transformation. The aspirations of CIC Consultingpartner are not to „do everything (digitally) possible, but to (digitally) do the right thing. Decisions on digitalisation are generally far-reaching and intensive in terms of capital. For this reason, CIC Consultingpartner fundamentally advises a systematic review of the situation. The business system and IT organisation is analysed across the entire value-added chain, and the level of maturity for digitalisation is assessed. In contrast to digital standard solutions, efforts are concentrated on company-specific digitalisation potentials and their feasibility for implementation in the company. The result is a tailor-made programme targeted at successful digital transformation.

  • Carrying out digital readiness checks
  • Analysing customer interests and buying behaviour
  • Optimising management of regular and new customers
  • Developing and implementing digital marketing and sales strategies
  • Optimising digital marketing and sales systems, such as eCommerce platforms and Customer Relationship Management Systems (CRM)
  • Carrying out simulations and 3-D visualisation for the planning and optimisation of production and logistics processes (Digital Factory)

CIC Consultingpartner GmbH
Friedrichstraße 88
10117 Berlin

T +49 (0) 30 408 173 425
F +49 (0) 32 121 478 938

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