Successful restructure and sale of Momentum Consulting Group

Client	Momentum Consulting Group Pty Ltd
Industry	Recruitment and Labour Hire
Services provided	Voluntary Administration and sale of business via a Deed of Company Arrangement

Key learnings

Voluntary administrations can facilitate the successful sale and recapitalisation of a business in an accelerated timeframe
Early intervention and stakeholder engagement are critical to preserving value and maximising creditor returns.

Scenario

BDO was appointed as the Voluntary Administrator of Momentum Consulting Group, after the business experienced a period of financial distress. The business employed approximately 800 casual employees, placed at client sites on labour hire arrangements.

The appointment allowed BDO to take control of the business, stabilise its position and secure a buyer for the business.

BDO’s role

We provided business restructuring services, including:

Voluntary administration
Distressed M&A sale process
Deed of Company Arrangement (DOCA).

Strategy and restructuring path

Our approach focused on stabilising the business and preserving value. Key actions included:

Securing funding to ensure the business could continue to operate
Maintaining the employment for majority of the workforce
Ensuring continuity of service for customers to preserve the underlying value of the business
Undertaking an accelerated process seeking proposals for the sale and/or recapitalisation of the company
Successfully completing the transfer of shares in the company to the purchaser
Executing a DOCA, transferring the business and distributing funds to creditors.

Outcome

The restructuring and sale process resulted in:

Successful sale of the company’s shares via a DOCA to an unrelated industry participant
Full repayment of the senior lender
Retention of the majority of employees retained, preserving jobs and operational continuity
Payment of priority creditors in full
A return of 20 cents in the dollar to unsecured and statutory creditors.