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
