Value Creators

MCG Global’s Foundation for Active Value Generation and Growth


Implementation of a Global Growth Plan
Value can be achieved by implementing a global growth plan for companies by expanding the distribution of products and services to international markets. As an example, Carson, Inc., acquired in 1995, became the leading global manufacturer and marketer of ethnic hair care products by extending its operations throughout Africa, Brazil and the Caribbean which have the largest concentration of the target market. Largely as a result of MCG’s efforts, Carson was able to increase international sales from approximately $3 million to $80 million in five years.

Identification of Hidden Assets
Value can be achieved through the identification and exploitation of hidden or underutilized assets such as a neglected brand or non-core business. As an example, Global Household Brands, a portfolio of three non-core household chemical products acquired from Block Drug Company in 1998, introduced the Carpet Fresh No-Vacuum product, an innovation that increased the brand’s revenue from $6 million to $27 million in one year – revitalizing the entire rug and room deodorizer category.

Application of Technology
Value can be achieved by leveraging a portfolio company’s business assets such as a strong brand name or a business process with technology solutions to improve the marketing strategy and the operating performance of the company. As an example, National Car Rental System, Inc., acquired in 1986, created the “Paperless Express” rental process which enabled the company to improve its operating margin through the elimination of excessive documentation while increasing its revenue through the addition of corporate clients such as IBM and General Electric. The earnings generated through this initiative also served to establish the “Emerald University” where National employees received further training and continuing education.

Strategic Financial Management
Value can be achieved by providing financial solutions to produce the optimal capital configuration to drive the growth of the portfolio company. As an example, in July of 2001, under MCG Global’s leadership, Velocity Express, the leading nationwide same-day delivery and logistics company and a portfolio company of TH Lee Putnam Ventures, successfully eliminated $43 million of liabilities from the balance sheet through an amendment to the original purchase agreement with Corporate Express, resulting in over $26 million of increased liquidity in fiscal year 2002. In addition, MCG Global was instrumental in eliminating over $34 million in SG&A costs which produced positive EBITDA, for the first time in Company history, in fiscal 2002 (ended June 2002). Also in fiscal year 2002, MCG Global led investments of $16.5 million in Preferred Stock financing in order to strengthen the company’s working capital and directed the effort to refinance the Company’s revolving credit line with an oversubscribed $40 million facility led by Fleet Capital.