Wall Street English: successful turnaround and preservation of the company’s value

SO-MG Partners provided the group with support for its recovery procedure and continues to work alongside its client to accelerate exit from the recovery plan.

A leading French player in the market for distance learning of English, in 2015 the Wall Street English Group experienced difficulties following a change in legislation. It tried unsuccessfully to renegotiate its bank debt and was obliged to initiate a recovery procedure which proved beneficial for the group by allowing it to:

  • Reschedule its debt over a longer period; and
  • Dispose of the necessary time and cash to implement several measures of performance improvement.

The group embarked on a series of measures:

  • Adaptation of its business model to the new legislative environment;
  • Implementation of an ERP system providing real-time visibility over billings and profitability for each training centre;
  • Improvement of each training centre’s contribution via better organisation and greater commercial impetus;
  • Identification of the sources of losses and rationalisation of the organisation.

Today, management’s efforts are concentrated on raising loan finance, repaying creditors and exiting the recovery plan. The company’s value has been restored and its access to finance has become easier.

The work performed by SO-MG Partners:

  • Provision of support for the company during the recovery procedure, involving the communication to the commercial court of reports presenting monthly operating and cash forecasts during the period of observation as well as the 8-year business plan serving as the basis for the company’s recovery plan;
  • Provision of support for management in the process of selling the least successful training centres;
  • Valuation of the group and provision of support for the purposes of raising loan finance and exiting the recovery procedure.

The results achieved:

  • Improvement of the Group’s fundamentals using the leverage provided by the recovery procedure as implemented by the team comprising company management and the company’s financial and legal advisors;
  • Creation of value for the group as a result of the successful turnaround, such that its value is currently higher than before the institution of the recovery procedure.

The three key success factors:

Support adapted to each context:

  • The precise and detailed understanding of the group acquired prior to the recovery plan made it possible to identify the drivers for turnaround and to propose a successful plan;
  • The implementation of focused and reliable indicators gave management the requisite toolbox for decision-taking during the phase of operational restructuring and subsequently during the phase of renewed development;
  • Henceforth faced with growth, we continue to support the group with its issues related to exiting the recovery plan and obtaining new finance.