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The O'Connor Group eNewsletter


December  2014

The O'Connor Group does more than just help companies manage cash flow and improve profitability. We help business owners execute their vision.

 

When The O'Connor Group was retained to help an events and promotions company, we had to quickly address some potentially fatal operational flaws. But more importantly, we provided a road map for the business owner to reach his goals.
Despite owning and operating some of the best and biggest trade shows in the country and having more than $18 million in annual sales, the company was losing money. And the weight of $4.6 million in liabilities was seriously impeding the business operations.
By addressing these issues, we were able to stabilize the company and eliminate the need for additional capital from investors. But we also helped the owner realize his larger vision. Today, the company has transformed to a leading provider of Business and IT education programs.

Fixing Problems, Reaching Goals

In the 1990s, Shared Insights' founder and CEO Barry Libert believed he could transform the increasingly stale business of trade shows and business conferences by leveraging the power of community.
He acquired the assets and liabilities of DCI, a bankrupt events and promotion company. The company owned and operated some of the largest trade shows and conferences in the country and would serve as a platform for his vision.
But the weight of the liabilities he acquired and a lack of capital nearly derailed his plan.
From the onset, the company was undercapitalized. Despite approximately $18 million in annual sales, the company was posting net losses and had nearly $4.6 million in unpaid bills. The company started using future show funds to decrease past payables and had little cash available to pay for hotel and conference space needed to conduct new shows. New vendors went to the back of the very long line and awaited payment.
Libert and his private equity partners were periodically forced to infuse new rounds of capital, totaling over $1 million, just to keep the business going and the creditors at bay.
That was when Libert turned to the O'Connor Group. The O'Connor Group quickly devised a turnaround plan. It took over cash management and vendor relations and made a series of changes to make the company profitable.
The O'Connor Group:

  • Placed vendors on COD in an effort to conserve cash and instill a sense of financial discipline
  • Pared office space and conducted a small number of layoffs
  • Eliminated one unprofitable show and sold another for approximately $500,000
  • Negotiated deals with vendors to put $1 million in outstanding payables on three-year interest free payment plans
  • Negotiated an additional $900,000 in outstanding payables down to $400,000

"Retaining O'Connor, was the single best business decision I have ever made", Libert said. "They are simply the best financial people I have ever worked with."

The O'Connor Group was able to stabilize the company and eliminated the need for additional capital infusions. More importantly, the O'Connor Group put Libert's vision back on track. Within a year, the O'Connor group was back assisting the company as its interim CFO, but this time from a much stronger position.
O’Connor played an integral part assisting in due diligence efforts to spin off the assets of the event business for approximately $7 million. Additionally and nearly simultaneously, the O'Connor Group helped consolidate the managed community business with Knowledge Planet under the parent company, SNAP. SNAP has $50 million in acquisition capital and was backed by such known investors as GE Capital and W Capital. The managed community consolidation yielded Libert $6 million in GE preferred stock.
Today, Shared Insights is now called Mzinga and is a leading provider of Business and IT education programs. Through regularly scheduled live events, conference calls and online seminars it helps leading companies like WebEx, Deloitte, Adobe and IBM improve product innovation and time-to-market, drive better customer service at a lower cost, increase sales through better business intelligence, and create more efficient marketing programs.

"Without The O'Connor Group, I don't want to think of where I would be today," Libert said. "They came in, helped turn my business around and we are now profitable. I'm very thankful for all of their insight, knowledge and guidance.”

For more information about how The O’Connor Group can lay the foundation for your company’s future success, please contact 781-275-2423 or info@theoconnorgroup.com


BUSINESS RECOVERY SERVICES

WORKOUTS & TURNAROUNDS

CRISIS MANAGEMENT

INTERIM MANAGEMENT

FINANCIAL / OPERATIONAL SUCCESS

BANKRUPTCY CONSULTING

BUSINESS PERFORMANCE

 

James O'Connor

James O’Connor, Jr.
President

Edward Schatz

Edward Schatz
Senior Managing Director

Steven Petrarca

Steven C. Petrarca
Managing Director

Jeffrey O'Connor

Jeffrey O’Connor
Managing Director