Case Study: Transportation

How Hilco Performance Solutions Helped Convert The Purchase of a Faltering Truck Leasing Operating Company Into Financial Success

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BACKGROUND

In May of 2020 Hilco Valuation Services and Hilco Receivables purchased the assets of 19th Capital Group, a distressed provider of asset financing and fleet management solutions for operators of Class 8 fleets across the North American trucking industry. The purchased assets included a fully equipped industrial shop space, ~1,700 idle trucks and ~2,050 trucks on active lease. Hilco was able to retain ~50 employees as part of the purchase and establishment of the new fleet management operating company, H19 Capital. 

PROBLEM STATEMENT

Hilco Performance Solutions (HPS) was tasked with managing H19 Capital’s assets & operations. This included management of the fully equipped repair and maintenance shop, idle truck sales, and active truck leases. Due to multiple changes in business ownership over recent years, the new H19 operating company was left without transitional CEO or CFO leadership and no unified companywide direction. Furthermore, H19 Capital’s operational procedures & reporting were outdated and inefficient.

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SOLUTION & IMPACT

As the first order of business, HPS leveraged not only its own staff for interim leadership roles within the new operating company but added tenured staff from Hilco’s Valuation Services and Receivables operating companies. Each new leader seconded into the business helped create new goals, objectives and focus areas for the retained employees in their functional areas where they have a deep level of expertise.

Next, gaps in existing operational procedures and reports were identified and addressed with the overarching goal of minimizing operational costs while maximizing the value of the assets purchased. Stringent approval channels were implemented to scrutinize every business cost. Additionally, all staff were trained to identify and call out observed redundancies which resulted in additional reductions across insurance policies, IT contracts, rental agreements, facility, and people costs. They tracked every idle truck sale, pushing the H19 sales staff to scour the market for the highest and best prices to place the idle trucks to ensure they were always outperforming deal expectations.

As many of the assets are sold and the company winds down over time, HPS continues to actively identify ways to right-size business operations to match the fleet at hand. To date, this has included lowering fixed labor costs by outsourcing of the mechanic shop to a third-party dealer, exiting underutilized rental locations, increasing use of the auction sales channel, and reducing vacant office space. Constant monitoring of company financial performance via weekly dashboards has also enabled the business to maintain a highly accurate forecast model. 

The exceptional post acquisition results of H19 Capital demonstrate the capability of Hilco Performance Solutions to drive down costs while optimizing operational efficiency on behalf of their clients.



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