We Must First Determine if a Company Has a Fundamental Reason to Exist
There can be many solutions to the problems facing the various constituents in a turnaround situation. At Cratos Advisors we believe it is important to focus on the most viable options as quickly as possible. We also believe that there is a key question that, once answered, helps define what type of solution is best for the engagement. That question; “does this company have a fundamental reason to exist?” If the answer to that question is no, whether it’s because of outdated technology, a tarnished brand or some other issue, the focus narrows quickly to trying to preserve the value of the assets and recover their value as quickly as possible.
But it is our experience that the answer to that question more often than not is YES. Cratos Advisors are able to discern that answer quicker than most because we are former operators ourselves and in addition to working through the financial data, we can intuitively understand the dynamics of an operation. There are then four key elements to a Cratos engagement:
Communications: Engage all constituents quickly and regularly. A successful outcome is not possible without information and credibility.
Operational: Any viable solution depends on a sound business which can ultimately produce profits and the affected constituents must believe that. Cratos will outline a plan which includes, but is not limited to, strengthening and supporting the management team, reducing costs, improving productivity and redeploying assets.
Strategic: Identifying appropriate markets, positioning products properly and developing growth plans consistent with available resources and a financial exit strategy, if applicable.
Financial: Daily cash management, financial restructuring, debt refinancing and equity infusion.