Convincing investors to invest even more money in a declining software business

Investors sometimes need an expert opinion if they are to trust management’s plans for turnaround. The shareholders in this Oxford-based software company required an interim manager to develop, implement and manage a turnaround and rescue plan for this diversified software development house with six divisions. A full review of the business and its strategic options was completed in order to fully understand the non-core and unprofitable product lines, areas for cost savings and potentially profitable existing and new markets.

The business was successfully turned around and gained business in a profitable and growing market in the US healthcare industry.  Buyers were found for each of the non-core business divisions.

The Business Options Review armed investors with information that allowed them to support strategic decisions, such as implementing cost saving measures and reducing the headcount significantly. The review led to the investment of over £1.5m in the new business plan.

Turnaround expertise assisted the company with the sale of unprofitable and non-core divisions and with restructuring plans so that management priorities were focused on profitable business areas, such as supplying the USA healthcare market. Advice on the sale of the business, the best methods of marketing and the valuation of the re-organised firm assisted this process. Early involvement allowed the company to avoid decline which might ultimately have led to insolvency. Outside management allowed the investor group to see the situation from a new perspective, clearly judge options available and ultimately turn the business into a going concern which could be sold

Please note that the above is provided for illustration purposes only and comprises a short view of extremely complex insolvency and other legislation. This is a complicated area and specific advice must be sought before undertaking any course of action or before refraining from any course of action. Gore and Company takes no responsibility for any loss incurred to or by any person who either acts or refrains from acting on the basis of the above or of any other item published on this website. The above note may not be reproduced without the prior written consent of Gore and Company.

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