$20M revenue automated optical inspection industry

Background

  • Introduced by 5 VCs who were co-investors
  • Company participating in four markets in three areas around the world
  • Company perpetually lost money and sales were declining
  • Company revenues were deteriorating
  • Considerable exposure in the US subsidiary regarding vendors
  • Company had problems with revenue recognition
  • Investors had lost faith in management and vice versa

Activities

  • Provided interim President
  • Designed reorganization plan that focused on the company’s core competencies, and determined non-core technologies that could be sold
  • Lowered company burn rate by 60%
  • Implemented CVIP model which resulted in the sale (involving licensing fees, OEM, and royalties) of technologies as follows:
    • Early stage technology based IP, sold to a $200-million industry leader in smart card technology;
    • Pre-prototype technology based IP, sold to the largest privately owned printing company in the world
  • Negotiated dissolution with US subsidiary
  • Resulting cash flow sustained company through the reorganization
  • Remaining core business was sold to a listed company in Japan

Results

  • Company continued, including 60 jobs
  • First five tranches of obligation settled $1/$1
  • Further tranches at $0.60/$1
  • US parties settled and voided all pending litigation