Company Overview
George F. Kempf Supply Co., Inc. (“Kempf”) is a building materials supply company serving the Greater Philadelphia area, northern Delaware and central New Jersey markets through locations in Philadelphia, PA, and Wilmington, DE. Kempf has been supplying building materials to the Philadelphia market since 1950. The Company is a Gypsum Supply Distributor (“GSD Supplier”) primarily supplying drywall, insulation, acoustical ceiling tiles, metal studs and lumber directly to construction contractors. The Company’s products are typically used in both commercial and residential buildings.
Situation
As a result of the economic downturn beginning in the second half of 2008, the Company experienced a reduction in sales and sustained losses from 2009 through 2011. In 2009, the Company began rightsizing the business in response to the downturn and closed its West Chester, PA, and Trenton, NJ, locations. Due to the cost saving measures and an increase in sales, the Company returned to profitability in 2012. From 2013 to 2015, the Company sustained losses largely due to inefficiencies due to working capital constraints.
In April 2015, the Company refinanced its existing line of credit and obtained a new equipment loan. While this new financing improved the Company’s liquidity position and reduced the trade payables significantly, the Company continued to miss potential sales opportunities. Therefore, the Company again experienced liquidity issues. The Company initiated a Company restructuring with layoffs and negotiated concessions from its union for rate and benefit cuts. Management expected these changes would provide necessary cash flow to improve operating performance.
Solution
Kempf retained Griffin as its exclusive financial advisor in both the sale of substantially all of its assets to prospective purchasers through Article 9 of the Uniform Commercial Code and the Company’s Philadelphia, PA, building and land.
For more information on this transaction, please contact Griffin’s Thomas G. Whalen, Senior Managing Director, at 610.205.6115, Glenn S. Bernabeo, Senior Managing Director, at 610.205.6034 or R. Patrick Wood, Senior Vice President, at 610.478.2110.
