Insights
- A digital advertising agency with two founders wanted to continue profitable growth in preparation for a sale within a three to four year timeframe
- While the company had experienced fairly rapid growth, it lacked the scalable infrastructure, processes and talent required to support its future growth
- The owners wanted to transform the company into an “institutional quality” investment such that an attractive strategic or financial buyer would be willing to pay a premium EBITDA multiple for the business
Actions
- The Newport partner worked closely with the CEO over a three-year period to professionalize all aspects of the company, including developing a more robust budgeting and financial analysis capability, upgrades to the leadership team, a better defined go-to-market strategy and many operational improvements
- Newport focused on creating the type of risk profile for the company that would attract a wide variety of targeted buyers
- The Newport partner helped select a well-qualified investment banker and M&A attorney as part of his role in overseeing the sale process
- A wide range of sales, marketing, operations and financial skills were applied to identify key areas for improvement, develop appropriate action plans and oversee their implementation by company personnel
- The Newport partner was also engaged in considerable coaching and talent development with both the CEO and the broader leadership team
Results
- During the three-year period of business improvements, the client tripled its annual revenues, quadrupled its EBITDA and penetrated multiple new market segments
- The client was acquired by a much larger strategic buyer for a very attractive EBITDA multiple
- The CEO continues to run the business as a division of the larger entity and the Newport partner continues to advise the CEO and his leadership team
