Case Study:

Rossi American Hardwoods - Management Buyout

Situation

• Rossi American Hardwoods is an 80 year old, privately-owned, family business.
• In the mid-90’s the majority stockholder sold a significant equity interest in the business to private equity investors and acquired several regional companies over the next several years.  However, the company had to suspend their acquisition strategy due to unfavorable industry conditions.

Objective

• Matrix was engaged by the CEO to assist in formulating an operating budget and to raise equity to repurchase certain operating businesses, with only a 90 day window to close the transaction.

Solution

• Due to unfavorable industry conditions and the short time frame, Matrix proposed an unconventional financing strategy.  Matrix approached a series of hedge funds to provide multiple layers of capital.
• This transaction raised nearly $30 million in acquisition financing for the CEO to re-acquire the family business founded by his father.
• Matrix was engaged to assist the owner with a subsequent transaction and the Matrix representative was asked to sit on their Board of Directors.