Case study

Organizational restructuring of a holding company

Situation

A holding company (with owned subsidiaries involved in industrial engineering and IT) experienced poor financial performance coupled with the near term requirement of significant capital investment. The company engaged a consultancy to develop a restructuring plan for survival of the subsidiaries. Delivery Partners provided analytical support for the project.

Our work

  • Determined economic earnings and return on assets for each subsidiary to identify course of action required
  • Reviewed product lines of each subsidiary to identify synergies for merger / consolidation
  • Helped identify areas of focus for restructured companies and develop a shared services organization structure for the holding company with increased emphasis on marketing and holding company management control

Results

  • Identified significant net profit potential be added over a 5-year period from the restructuring subsidiaries with return on assets above the hurdle rate
  • Identified that sale of non-performing assets could help reduce existing debt burden
  • Redefined corporate center role with specific tasks and deliverables