Cratos is in the business of fixing businesses. More important, we are in the business of finding solutions for stakeholders that stand to lose value if the distressed enterprise with which they are associated fails. Measuring success for our clients can vary depending on the stakeholder position they possess. It may be a return to profitability, elimination of future liability, loan reserve reductions or obtaining preferred stock or warrants in lieu of a complete write-off. Our measure of success is understanding and delivering our constituents’ needs. Because we have represented such a wide variety of clients, Cratos is able to understand the unique perspective of each:
Private Equity Groups (PEGs) – Sometimes, despite the best due diligence, PEGs do receive that for which they thought they paid. Cratos has been hired by multiple PEGs to address under-performing operating results, develop early exit strategies, and sometimes we’re even used as due diligence advisors on future transactions.
Partnerships, Families, or Individuals – Despite success in the past, business circumstances can change and finding the right path is difficult particularly for those that have been immersed in a business for years or even generations. Cratos has not only returned companies to profitability but also executed transactions that allowed business owners an exit that provided long-term security and minimized shareholder risk.
First Lien Lenders – Cash flow lenders can see EBITDA evaporate overnight and asset-based lenders may realize their collateral value is not what they thought. Cratos has been successful developing both operational and financial solutions that minimize losses and sometimes even return the borrower to an attractive credit.
Second Lien Lenders – Being the fulcrum credit of a complex waterfall comes with advantages. However, knowing how to leverage this position to maximize return may not always be clear. More often than not Cratos has been able to negotiate exits with equity shareholders or provide successful turnaround plans for new equity that yield a return above initial expectations.