Overview
This public company (de-SPAC) is a growth-stage SaaS SW & HW company with an unsustainable burn rate based on current sales trend. The company is well-funded but if action is not taken, it could run out of cash before break-even. Customers, partners, and shareholders were worried about their long-term viability due to low overall gross margins, negative EBITDA, and departures and turnover among the management team. The Board of Directors was concerned and asked AlixPartners to help turnaround the company.
In the immediate term, AlixPartners provided interim leadership support (CEO and CFO) to help stabilize the organization and increase management capacity. The team then evaluated the company’s operating model, reviewed labor and third party spend, reduced inventory, and renegotiated purchase commitments. For the company’s market approach and strategy, the AlixPartners team analyzed the overall market and current market share, redesigned the go-to-market strategy to accelerate growth, and helped the company explore strategic alternatives and related transactions geared toward repositioning itself in the market and spurring a growth strategy.
Ultimately, a combination of cost and growth initiatives is expected to increase EBITDA by 112% in year 1 and 49% in year 3 by:
- Reduced labor cost by 44%
- Streamlined external party spend by 20%
- Increased software pricing to be in line with competitors
- Reorganized sales team to increase sales effectiveness
- Created a channel partner program to scale faster
The AlixPartners team helped the company create a governance structure and processes to sustain and enable future growth and helped position the company to achieve a sustainable level of growth.