26 Oct Manufacturing Case Study
Ferrin-Tech, LLC Case Study
Multi-Phase Business Growth and Asset Sale Leads to New Entity Consulting
Robert Davies, Managing Director of Ferrin-Tech, LLC, has worked with Schmidt Westergard on a variety of tax, audit, compliance and business transactional needs since about 2011.
With more than 30 years of executive and financial leadership experience, Davies needed a CPA firm that had experience in the various phases of a manufacturing business — from mid-stage to sales to new start-ups. To understand the basis of the business relationship, here is a little history:
Advanced Protein Systems, LLC, was founded in 2003 to build a colostrum manufacturing facility that would set a new global standard for colostrum product quality and efficacy. In 2004, a large scale, efficient colostrum plant was completed in Phoenix, Arizona. With the expansion and development of other products, including lactoferrin, the company rebranded itself under a new name, APS BioGroup, LLC.
Attracting interest from private equity investors, APS entered an asset sale transaction to sell the colostrum products business while retaining ownership of the lactoferrin business. Effective December 30, 2016, APS BioGroup, LLC, was renamed Ferrin-Tech, LLC, which is now a producer of lactoferrin products from USDA Grade A skim milk. Production is in conjunction with joint venture partner United Dairymen of Arizona (UDA). Ferrin-Tech lactoferrin is sold world wide.
Since 2012, Schmidt Westergard has been instrumental in the growth and asset sale of the colostrum business, according to Davies. Tax strategies and audit oversight for the company’s operations, internal controls and processes supported clean books and growth. This solid foundation contributed to private equity interest and a smooth transaction, Davies said.
He also appreciated guidance on tax impacts for company decisions as well as the tax reporting and filing services provided for individual owners. This work included tax return amendments and representing owners on questions by the Internal Revenue Service following the sale, resolving queries to everyone’s satisfaction. When Ferrin-Tech, LLC entered joint venture negotiations with UDA, Schmidt Westergard guided decisions on tax structures and treatments that were advantageous to both entities.
“It’s a complicated venture crossing several industries, and these were complicated transactions, but Schmidt Westergard helped us stay on track,” Davies said. “They were there during the asset sale, for example, to handle things like working capital adjustments and making sure everything was reconciled. Their knowledge of our operations and goals were invaluable.”
Davies feels confident in his ability to call Schmidt Westergard partners or key managers with any questions about ongoing accounting controls or tax strategies — and that hasn’t changed with his role at Ferrin-Tech, LLC. As new ventures come under consideration, he brings the Schmidt Westergard team into the discussion early for tax planning and regulatory compliance.
“Over the years, I have dealt with many accounting firms. When it comes to our needs, Schmidt Westergard is more efficient and consultative, looking at all the options to help us determine our next move — and that’s a huge benefit. We are very happy with them.”