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Case Study

Disposal of High Value Assets made idle through M&A

Multinational Oil & Gas OEM

The customer is a multinational Oil & Gas OEM with operations in over 120 countries.
Location
Eastern Europe

Customer Problem / Need

Customer acquired an idled manufacturing facility (as part of a larger acqusition) in Eastern Europe which contained a significant number of high-value assets.  The end goal was to sell the real estate, necessitating the removal of these manufacturing assets as soon as possible. The customer did not have any local facilities where redeployment of equipment was viable or needed, and the customer did not maintain an active in-country presence through which to sell the machinery.

Challenges

The assets were valued prior to the COVID pandemic. The region was hit hard by the pandemic putting strict limitations on commerce, many equipment removal and transportation companies were now out of business. This resulted in pricing for these services increasing anywhere from 200-400%, with long lead-times for removals to start-with. Furthermore, buyers were very reluctant to invest in any machinery purchases through fear they would be unable to collect the machiney for an indefinite period. The Russian invasion of Ukraine further stoked fears of entering the region strictly from a safety perspective in addition to the already present reluctance for buyers to do business there.  

Market conditions globally during the pandemic caused machinery values to decrease dramatically, the customer decided to relocate several key machines back to the United States. These machines represented approximately 25% of the pre-COVID valuation.  However, the Customer had planned for a financial return on liquidation of the site on the pre-COVID numbers.  Maximization of sale proceeds was more critical than ever.

Solution

Chain accessed it’s already established global network of suppliers, machinery dealers and repeat-buyers of similar types of machinery. A multi-phased sales strategy was implemented in an effort to reach pre-COVID values in spite of the global market conditions.

Phase one was a targeted calling campaign to known end-users of the highest value machines being sold. Prospects were identified through our broad industrial contact database (60,000+ contacts), focusing on pre-qualified buyers and bidders from prior sales.  In addition, pre-defined SIC and NAICS searches were performed to further select likely buyers.  

Phase two was a public auction which drew buyers from Eastern-Europe, Europe, and the Middle-East.

Outcome

‚ÄćThis resulted in achieving 90% of entire plant assets, with remaining lots requiring little scrap cost to remove.

Final sales results exceeded 70% of original valuation in a market that had been seeing values 50% or more of pre-COVID values.

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What we did
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