Castronics, LLC

Richard S. Ruback; Royce  Yudkoff

Case | HBS Case Collection | September 2012

Castronics, LLC

Abstract

Patrick Dickinson (HBS '09) and Michael Weiner (MIT's Sloan '07) acquired Castronics, a firm that specialized in threading pipe used in the oil and natural gas industry, at the end of 2009. The partners overcame significant hurdles during the first two years of ownership, which included the loss of nearly half of their workforce, the threatened entry of a formidable competitor into their market, and limited production capacity. In spite of these challenges and many other day-to-day obstacles, by the summer of 2011, the company successfully tripled production and EBITDA and the partners were deciding whether or not to sell the company.

Keywords: small business; Search Funds; corporate finance; Entrepreneurship; Financial Management; Energy Industry; Western United States;

Language: English

Format: Print

24 pages

Educators Purchase

Citation:

Ruback, Richard S., and Royce Yudkoff. "Castronics, LLC." Harvard Business School Case 213-028, September 2012.

Lind Equipment failed to meet its loan covenants with its senior bank lender in the summer of 2008, just six months after it was acquired. While the senior bank debt comprised only 6% of the capital used in the acquisition and was fully secured, it exercised its right to stop payments to Lind's subordinated lender that funded about 40% of the acquisition, pushing that debt into default as well. These financial problems were the result of declining revenues and profits at Lind as exchange rates and the impact of the Great Recession took its toll on the firm. Without a quick solution, Lind could be pushed into bankruptcy.

Faculty & Research

Castronics, LLC

Abstract

Citation:

About the Authors

More from these Authors