Case | HBS Case Collection | July 2012 (Revised June 2013)

MC Tool

by Richard S. Ruback and Royce Yudkoff

Abstract

Two partners acquired MC Tool in October 2007 for $5 million. The company was a machine shop that manufactured parts for a wide variety of applications in the energy, automotive and industrial equipment industries. In their first year of ownership, the partners focused on improving operations and enhancing sales with impressive results: sales doubled and EBTIDA increased by over 40%. But the "Great Recession" had an immediate impact in the fall of 2008 as customers cancelled orders and new sales became scarce. MC Tool's core business was cyclical and risky. The partners were considering transforming the business towards manufacturing more precise parts that would be less cyclical and less risky.

Keywords: Capital Budgeting; Risk Management; Risk and Uncertainty; Problems and Challenges; Business Strategy; Production; Manufacturing Industry; United States;

Citation:

Ruback, Richard S., and Royce Yudkoff. "MC Tool." Harvard Business School Case 213-013, July 2012. (Revised June 2013.)