Aviant

Size

Middle Market

Expertise

Strategic Assessment and Financial Restructuring

Assignment

Aviant, a $140 million Long Beach California supplier of contract engineers and IT personnel had violated its bank covenants and was being forced to financially restructure the business. The owner, a Private Equity Firm wanted to evaluate their options which included making additional investment or exiting the business.

Actions

Aviant was developed as a spinoff of an internal department at Boeing Aircraft Company. Management's original intent was to use the Boeing business as a foundation to build a larger diversified contract supplier. Management’s efforts were met with limited success. They were able to build a commercial business that amounted to 35% of their revenue total but that amount was inadequate to offset the vagaries of a changing aircraft business. Boeing who made up 63% of Aviant revenues was facing major cost and revenue pressure as a result of delayed programs and overall increasing costs. With stock values falling, Boeing Management was being pressured to speed up revenue as well as cut costs. As part of these efforts Boeing was attempting to control their staffing costs by centralized purchasing through one master vendor. Within Aviant this program looked to control future growth and to further disappoint their equity investors. MainStream evaluated the options and provided recommendations to the company's board.

Results

The environment for staffing companies was such that consolidation was necessary to meet changes in the market place and adjust to the demands of the customer. As a result, the best option for Aviant investors was to sell the company to a strategic buyer rather than invest additional capital and yield the same return. Soon after MainStream's engagement a strategic buyer was identified and the company sold.