Insights
- A recently formed private equity firm identified an acquisition target in the energy space
- The target was privately owned with a strong record of growth and an enterprise value of approximately $30 million
- The target was an asset-heavy, capital intensive business that required continual cash infusions
- The PE firm developed a recapitalization plan for the target and received a lukewarm reception to its proposal
- With no energy or sector-relevant executive management expertise, the PE firm was searching for a way to expand its capabilities and improve its reception by the target
Action
- A Newport partner with extensive energy sector experience was retained
- The target’s financial and operating information was reviewed and assumptions were validated around the company’s business
- A roadmap was developed for future business development and growth opportunities
- The Newport partner also provided the PE firm credibility with the target company as well as with potential transaction funding sources
- The Newport partner further provided both strategic and tactical advice on how to successfully navigate through a prolonged deal process
Results
- Ultimately, a transaction was announced with another buyer, with the PE firm as runner-up
- The PE firm is now pursuing other opportunities and the Newport partner was retained as a fractional operating partner to assist in pursuing additional acquisition opportunities
