An acquired industrial manufacturing company was diversified into multiple unrelated and non-core businesses and functions, including a construction products manufacturer, cafeteria, medical clinic, hotel, typographical shop, and dry cleaner. In addition, the plant was vertically integrated with many ancillary shops and properties that were not part of the company’s strategy or value.
Management needed to focus their efforts and capital on core operations, rather than diluting them on these non-core activities.
(1) Established a strategy, in concert with the company ownership, to focus on the company’s core manufacturing operations and remove distractions.
(2) Initiated divestiture process to sell off or shutter non-core subsidiaries.
(3) Initiated outsourcing process to transfer non-core workshops to third parties.
(4) Initiated process to sell unneeded corporate-owned real estate assets.
(1) Successfully sold construction products manufacturer, medical clinic, and hotel businesses, shut down typographical and dry cleaning businesses.
(2) Profitably outsourced cafeteria, automotive repair and wood products workshops to third party companies specialized in these services.
(3) Sold off dozens of real estate assets to third parties.
(4) Refocused management attention and corporate capital on core operations.
(5) Generated millions of dollars in cash flow redeployed to core manufacturing.
- Date: 2017
- Categories: Case Studies