Category Case Studies

Situation

An established Brand owner of more than 14 years providing wide range of skincare and health supplements of herbs and natural products, this client’s revenue had reached a plateau of RM7 million annually. The Founder believed that they were missing a potential growth opportunity. They came to CAPITAL with a request to assist in creating a growth plan for the company and to raise the necessary expansion capital to fund the plan.

Challenge

• Diversification of revenue
• Scalability of internal management capabilities
• Positioning the company to raise capital for its grow plan

Solution

Working with the Founder and the management team, CAPITAL developed a three-year growth plan for the business, to help them develop a growth strategy for their business and to build an infrastructure to drive and manage that growth (include both organic growth and acquisitions). CAPITAL then worked closely with the client to prepare the necessary presentation materials and develop the potential financial terms to fund the grow plan.

Also, by establishing a regular process for defining, obtaining, and evaluating key performance measures, this client was able to translate that information into critical knowledge that helped them better manage resources and drive growth.

Results

CAPITAL provided the client access to several high quality funding sources, as potential JV partners for the company. CAPITAL was also able to demonstrate the inherent value of the client’s balance sheet and ensure the JV partners were comfortable with the risk represented.

The ability to understand what works best and continue to replicate it, while eliminating those efforts that fail to work, has successfully grown the company from 5 retail outlets in Klang Valley to more than 30 outlets in less than two years, with substantial online present and e-commerce capability.

The company is now planning to offer its products to all state of Malaysia including Sabah and Sarawak, and is in the process of exporting to Thailand and Indonesia.

Situation:

A Bumiputra – owned company, manufacturing (OEM) and distribution of its own brand of a health drink that includes an exclusive blend of the mangosteen, with a secret formulation of non-traditional ingredients such as herbs, vitamins, minerals, amino acids, additional raw fruit or vegetable ingredients and other body-beneficial fruits, was experiencing high sales growth but declining margins and increased working capital consumption. They were in breach of covenants with their existing suppliers and had fully utilized their banking facilities.

Challenge:

Management reporting inadequate and untimely
Margin erosion and increasing overhead due to operational inefficiencies in order processing
Existing technology and processes not meeting changed business needs
Increased customer complaint due to long delays in dispatch of products
Stock not being managed including poor credit terms and inbound/outbound cost control
Creditability with financiers and creditors very low
Shortage of required skill-sets to run a high volume customer facing business.

Solution:

Implemented rolling monthly and yearly cash flow forecast and 3 way forecast model
Interim Finance Manager appointed to stabilize the cash flow and financial reporting of the business
Customer delivery issues addressed through sales and stock forecasts, improved dispatch efficiencies
Stakeholder management strategy to regain support of creditors including a payment plan
Sales mix and margins agreed to increase profitability cash flow
Technology improvements to meet business needs and enhancement of social media marketing.
HR plan put in place to bring the required skill sets into the business and implement tighter management processes to deliver operational efficiencies
Banker fully briefed on issues and actions being taken
Business model reviewed and overhead cost reductions identified.

Result:

Ongoing support from existing bbanks and financial Institutions and increase its credit limits.
Stakeholders including creditors and suppliers were carefully managed and remained supportive
Profitability of various marketing campaigns understood and return to margin management
Operational efficiencies lead to cost savings and improved customer experience
Improvement to working capital and cashflow management
Now consider exporting its products to neighbouring countries

Situation:

The company managed a flash sale website that serves as a platform to market and sell great design products to customers. Sales events are only open to invited members and membership is obtained through invitation from a member friend or direct from the site. Sales events are announced via email a week in advance and last 36 hours or until all items are sold out, whichever comes first. They came to CAPITAL with a request to assist in raising expansion capital to further develop this platform.

Challenge:

The company is a startup will a small revenue, the business model needs a lot of fine-tuning including its revenue model, profit margin model, operating model, working capital model as well as the financing model before it can really attracts serious investors.

Solution:

Working with the co-Founders, CAPITAL developed the business model, assisted in the creation of the presentation to potential investors, designed the financial terms of the offering and participated in investor pitching and, ultimately, worked closely with management in closing the transaction. CAPITAL continued working with the Board and potential investors in negotiating terms.

Results:

This client successfully raised RM500,000 from an angel investor in 6 months plus RM500,000 commited capital, which enabled the company to further develop its product, fund key marketing initiatives, and position themselves for the next wave of growth and strategic partnering opportunities.

Situation:

A leading Motorcycle Dealership Business in Malaysia was looking to develop a Systemized Brand Identity, to upgrade their Sales Force management, to improve supply chain, and a better Financial Management System to cope with its growth.

Challenge:

To develop a Brand Identity, that works perfectly with its own sales force (mindset change), at the same time improving supply chain (bulk purchase), while having sufficient capital (cash flow) to sustain sales growth.

Solution:

We conducted a series of in-depth analysis, and invested our time to properly understand the business. We have concluded and designed the Holistic Motorcycle Ecosystem, and named it Motorpreneur Program. The Motorpreneur Program brought together the Brand, the Retail Showroom, the Sales Force, Centralized Supply Chain and the increase in Capital to fund growth.

Result:

Sales growth of almost 50% after the implementation of the new Program. Recruited more than 30 enterprising individuals to join the company’s sales force. Improve capital needed by the company by 25% to fund sales growth. Centralized Supply Chain reduces cost by almost 7%.

Situation:

A group of young and enthusiastic individual has secured a master franchise from a Singapore-based leading soya bean food and beverage retailer to expand the presence of its brand in Malaysia. The first outlet was setup at the Curve with moderate sales. CAPITAL was appointed by the major shareholder to raise growth capital so that the brand continues to grow and franchisor–franchisee relations remain strong.

Challenge:

It has the strong potential to be the leading brand for soya bean products as the high market demands for consistent quality soya, with their modern soy offering, the company would be able to penetrate younger crowd. Nevertheless, these require time and effort in building up the brand value by adapting the right business model and customer value proposition to Malaysians.

Bank loan at this stage is not an option yet as it is a newly setup and the company’s shareholders were not in a position to infuse significant amounts of new equity capital into the business.

Solution:

CAPITAL worked with the key shareholder and management to strengthen the business plan and to prepare a financial model to analyze various scenarios on performance before preparing an investment package and approaching potential investors. Our roles:

Preparation of an “Investment Package” consists of investor’s deck, business proposal and presentations.
Approaching potential private equity investors.
Negotiation with investors of the key terms including valuation of the company.
Project management of the due diligence process.
Management of the documentation process.
Liaison between management and the private equity investor and
Driving all parties to achieve completion

The Result:

We obtained a detailed term sheet from a company investor that specialized in affiliates program within 3 months, providing RM500,000 growth capital, plus an attractive profit sharing scheme for management if certain sales targets were met. Of particular note, the company investor was willing to take a minority position, a highly unusual situation given the relatively early stage of the company.

Another plus was that the investor’s firm had extensive ties to the young community that could open doors for additional sales as well as new location and franchisee. The company is soon to open its new franchise outlets at Mid Valley, The Mine Shopping Mall and The Main Place at USJ. CAPITAL’S on-going role has been to work with management to implement the business plan and to continue to liaise with the investor group and management.

Situation:

The company is one of the leading alloy wheel manufacturers in Malaysia. Over the years the company had distinguished itself through its niche casting capabilities, quality record and long-standing customer relationships.

The company was awarded a large number of contracts with an automotive OEM and was in need of additional manufacturing capacity to support the launch of new products. In addition, the company was looking for end-market diversification in an effort to grow outside of its core segment.

Challenge:

The Company needed to raise additional capital to move to a new location to increase its manufacturing capacity, purchase new machinery and equipments and to fund the incremental working capital necessitated by the forecasted increase in revenue.

They had relationships with two local commercial banks; one relationship was 5 years old and the other 6 years old. Both banks turned down the company’s request for an increase in their working capital line and for a term loan of 5 years. The banks stated that the company’s business was stagnant for the past few years. In fact the bank the company had been with for 5 years stated that the company was fortunate to get a renewal of its present facility despite the fact that the company had been a very good customer, paying its obligations on time and always in compliance of its loan agreements

Solution:

Management agreed that we would approach other FIs for the working capital and seek term loan for renovation of the new factory according to its specification. With the strategy agreed upon, we put together a loan proposal on the company which discussed its history, products, management, historical performance and the new opportunity.

Result:

CAPITAL’s significant experience and relationships in the industry allowed us to quickly identify and approach a few Malaysia development banks to provide the necessary credit facilities and governmnet incentives to grow the company as planned:

• SME Bank: RM 5.0 million term loan with 5% interest p.a. for the new factory and working capital.
• MIDF: RM1.3 million to purchase machinery and equipments including furnace and robotic arms at 90% financing with 5% interest rate.
  AmBank: RM1.1 million to purchase a fully automatic paint line.
• MIDA: Approval of Pioneer Status which enjoying 5 + 5 years of 100% tax exemption under SME category.

Situation:

Founded in 2004 and acquired the Malaysian Industrial Development Authority’s (MIDA) pioneer status recognition in early 2005 with 70% tax exemption for 5+5 years, the company is a leading producer of the most technically advanced polymer pipe (High Impact Resistant, Anti-Bacterial). The Founder was seeking liquidity for his investment and a financial partner to work with the management team to continue growing the business.

Challenge:

CAPITAL’s mandate was to recapitalize the business with financial partners to provide liquidity for the company’s founder, while preserving their ability to continue to participate as equity participants in the recapitalized company.

Solution:

Through the network CAPITAL had cultivated in the private equity / financial community we arranged several meetings with interested investors and bankers. The assignment included developing a detailed three year business plan and financial forecast.

Result:

CAPITAL structured a RM20 million recapitalization of The Company. The transaction structure enabled the founder to reinvest a portion of his proceeds in order to maintain over 51% ownership of the new company. Further, participation from the management team resulted in approximately 10% of the recapitalized company being owned by members of the existing management team.

CAPITAL managed the transaction from start to finish, successfully negotiating significant liquidity for the Company’s shareholders, while providing the company with a financial partner to fuel future growth.

A wholesaler and retailer of bathroom accessories and kitchen products such as shower sets, sanitary wares, shower screens, tap fittings etc.
Puchong, Selangor, Malaysia
Commercial Bank
RM2 million including Term Loan & OD

A trading company specializing in doors, door glass, locks and other household products.
Puchong, Selangor, Malaysia
Commercial Bank
RM1 million including OD

A Jewellery Boutique specializing in designing and producing high quality finishing products; one-of-the-kind and fine master piece jewelleries with unique creations by an awards winner designer group.
Kuala Lumpur, Malaysia
Commercial Bank
RM1 million including Term Loan & OD

A Malaysia – Korean JV specializing in manufacturing of the most advance water pipe, namely AB-3P which is patented in Korea and applied worldwide
Nilai, N. Sembilan, Malaysia
Commercial Bank
RM20 million including Term loan, OD, LC, TR & BA

A company specializing in blasting and painting of pipes, fittings, structure steels and storage tanks including surface preparation and protective coating for power generation, petrochemicals, oil & gas industries
Petaling Jaya, Selangor, Malaysia
Private Investors / Commercial Bank
RM5 million, including private fund injection and tradeline

An engineering and construction company specializing in designing, fabricating and installation of telecommunication and transmission towers, its equipment cabin and other related foundation works for MAXIS, DIGI, MiTV
Kg. Baru Subang, Selangor, Malaysia
Commercial Bank
RM3 million including OD and Tradelines

A leading information technology services provider specializing in diversified ICT solutions, products and services catering for small, medium and enterprise businesses, as well as government agencies.
Penang, Malaysia
Venture Capital
RM2 million

An engineering company specializing in instrumentation, control, telemetry, mechanical and electrical works for water related projects in Malaysia.
Selangor based. Operate nationwide
Investment Company
RM1.4 million

An importer, distributor and retailer of Indian textile merchandise. Its main business including import, wholesale and retail sales of fabric and ready to wear materials for men, women and children.
Klang, Selangor, Malaysia
Commercial Bank
RM400,000

Manufacturer and distributor of hot & cold water dispenser, water filters and purified system.
Sg. Besi, Kuala Lumpur, Malaysia
Commercial Bank
RM800,000

A software company specializing in workforce planning and scheduling software.
Singapore and Malaysia
Private Investor
RM500,000

Manufacturing and assembly of machinery for food & beverage line, ovens and conveyor line. Also an importer and exporter of new and used confectionery machines.
Butterworth, Penang, Malaysia
Commercial Bank
RM870,000

An engineering company in the semiconductor industry specializing in environmental test chambers, data acquisition software and energy management.
Ipoh, Perak, Malaysia
Commercial Bank
RM300,000

A manufacturing plant specializing in powder coating, including metal parts, aluminium / die-casting, wood and plastic coating.
Shah Alam, Selangor, Malaysia
Commercial Bank
RM2.4 million

An international trading company dealing with OE/RE automobile parts to the local and regional market as well as providing services in component design, technical services, and engineering.
Kuala Lumpur, Malaysia
Commercial Bank
RM3.5 million

An importer and wholesaler of automobile audio systems and audio equipment such as stereos, speakers and amplifiers, and car accessories such as auto starts, alarms and driving lights in all major town of Malaysia.
Kuala Lumpur, Malaysia
Commercial Bank
RM1.75 million

A manufacturer and wholesaler of high-end office furniture for computer users as well as general office usage such as office table, conference tables, cabinet, chair and counteriser.
Sungai Buloh, Selangor, Malaysia
Commercial Bank
RM700,000

An operator of Shell’s petrol station including its non-fuel retailing business and facilities.
Selangor, Malaysia
Commercial Bank
RM500,000

A supplier, importer and exporter of quality paper, greeting cards and other paper products.
Puchong, Selangor, Malaysia
Commercial Bank
RM2 million

A sole-proprietorship involving in wholesale and retail of “Shell Gas” (LPG) in the area in Tanjung Malim / Slim River.
Perak, Malaysia
Commercial Bank
RM1.4 million

A post-secondary education organization, providing a highly valuable learning experience that meets students’ needs for employability, career development and personal success.
Klang, Selangor, Malaysia
Commercial Bank
RM850,000

A company involving in salvaging, processing and recycling of ferrous and non-ferrous scrap materials.
Klang, Selangor, Malaysia
Commercial Bank
RM2 million

Proposed 29 units bungalow house and 261 units apartment house on Setapak, Gombak, Selangor
Setapak, Selangor, Malaysia
Company Investor
RM3.5 million

A manufacturer engaged in manufacturing, trading and marketing of a specialized range of metal ceilings and sun louvers in Malaysia.
Shah Alam, Selangor, Malaysia
Private Investor/ Commercial Bank
RM5.5 million

A Malaysia based company specializing in manufacturing and marketing of wax additives and other specialties chemicals for the coating and ink industries worldwide.
Shah Alam, Selangor, Malaysia
Private Investor/ Commercial Bank
RM6.5 million

Importer and distributor of a Taiwan brand kitchen hood, hob and home electrical products.
Kuala Lumpur, Malaysia
Commercial Bank
RM800,000

A company specializing in all types of interior design and renovation works for offices.
Sri Kembangan, Selangor, Malaysia,
Commercial Bank
RM300,000

An engineering firm engaged in fabrication and installation of water tank supports, fencing railing, gate, door and windows grille and trading of other steel related products.
Sg. Buloh, Selangor, Malaysia
Commercial Bank
RM300,000

A leading specialist contractor and supplier in the field of pumping, water and wastewater industry for sales, installation, refurbishment, testing and commissioning services.
Sunway Damansara, Selangor, Malaysia
Commercial Bank
RM1.3 million

A civil, mechanical, electrical and instrumentation engineers and contractors firm based in Selangor, now expanding to overseas.
Kepong, Selangor, Malaysia
Commercial Bank
RM2.5 million