Large rubber mixing and compounding company
AirBoss is a large rubber mixing and compounding company headquartered in Toronto, Canada. The company is one of the leading providers of rubber compounds to OEMs and produces various engineered rubber products.
The company’s customers include automotive tire manufacturers, snowmobile OEMs, automotive OEMs, various industrial part manufacturers and the U.S. and Canadian defense departments.
Much of the company’s traditional customer base has been migrating to the Southeastern U.S. over the past 20 years. Additionally, several facilities were not producing near optimum capacity utilization, so there appeared to be room for consolidation. Given that the company’s production facilities are primarily in the Northern U.S. and Canada, the company asked Maven to assess its manufacturing footprint going forward and what strategic options are available to address this.
The Maven team evaluated various strategic options for addressing the company’s manufacturing footprint. The team developed a financial model to assess the impact of each scenario which included plant consolidation, optimizing product mix within the current footprint, exiting certain lines of business as well as potential strategic acquisitions. The team also assessed the potential customer and market risk for each move. Maven concluded that the maximum potential savings could be attained by combining plant consolidation with a strategic acquisition that would best align its future footprint with the geographic shift in its customer base. This option would enable the company to realize an after-tax increase in cashflow of more than $16M.