Case Study

Maximizing Enterprise Value To Sell The Company – Or Retain It

man in suit with arrows going up in foreground

Insights

  • The company created a unique technology-based solution that was being distributed via third party institutions, which was significantly affecting margins
  • Stripped of cash flow, the client had slowed its product development and international market expansion plans
  • A number of offers were received to acquire the company, but none met the founders’ expectations

Action

  • The Newport partner was engaged as a CEO adviser to help the client maximize enterprise value in preparation for discussions with potential acquirers
  • The partner developed a structured data room, a five-year pro-forma financial model based on a revised product and market strategy, and created new pricing and distribution models
  • New collateral was also crafted for use in investor meetings and support in negotiations with potential acquirers

Results

  • The Newport partner’s application of financial analysis and modeling, scenario planning, and focus on factors that enhance enterprise value resulted in total preparedness for institutional-class due diligence
  • In the end, the Newport partner created such a compelling growth plan that, despite increases in offer prices by multiple potential acquirers, the founders opted to continue operating and further optimize the timing of the exit for maximum value
  • The company is now leaner and growing more rapidly, with a quantifiable increase in enterprise value
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