Growth Partners | Client Examples
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By Company Size

Emerging Stage ($5m to $25m)

Setting: The owner of a $12 million valve repair and sales company reached a decision inflection point related to needing advisement regarding whether to continue to build or sell the company.

Engagement: We: 1) provided a value realization analysis regarding the nature and risk associated with achieving the company’s next-level development, 2) recommended that a majority or outright sale was optimal given the risk/reward profile of the build propositions, and 3) handled the sale of the company to a large company.

Outcome: Our client was afforded a clinical data point and confidently agreed with our conclusion about selling. We handled the transaction process and the outcome that was produced included a 7.0x multiple.

Growth Stage ($25m to $50m)

Setting: A $45 million real estate brokerage company experienced rapid growth, and sought an evaluation of both, its status (value maximization), and the nature of its next-level development (value creation).

Engagement: We: 1) conducted a classic value maximization and creation analysis, 2) presented an assessment of the basis of the company’s value, 3) crafted a strategic development agenda defining the growth and development path , and 4) contributed to decision-making regarding difficult changes.

Outcome: Our client was able to better understand its strength and weaknesses, engage the strategic development agenda to increase value, and we handled the sale of the business years later for a valuation over 6.5x.

Platform Stage ($50m to $100m)

Setting: The owner of an aerospace manufacturing company wanted to explore opportunity to further build his business, notwithstanding limited resources.

Engagement: We: 1) proposed a horizontal integration plan via multiple add-on acquisitions, 2) positioned three acquisitions, 3) recruited a senior management team, 4) raised $42 million in debt financing, 5) raised $24 million of equity capital from a private equity firm, and 6) provided integration advisement and a strategic agenda.

Outcome:  The post-transaction company’s enterprise value was $66 million, and it was sold for $110 million five years later via an 8.5x multiple, with our client earning $40 million based on a $10 million investment (30% IRR).

Expansion Stage ($100m to $250m)

Setting: The owners of a number of synergistic precision machining, sheet metal and fabrication companies manufacturing structural components with sales totaling $125 million wanted to sell their companies.

Engagement: We: 1) designed a value creation plan based on coalescing the companies capabilities to create a “one-stop-shop” supplier, 2) enrolled the owners of five companies and negotiated transaction terms, 3) recruited the CEO, 4) raised debt financing of $40 million and equity capital of $20 million, and 5) created the strategic agenda.

Outcome: Over a period of four years, the new company’s ownership concluded additional acquisitions, and the company grew to over $200 million in revenues, and $300 million in assets.

Complex Stage ($250m >)

Setting: A $300 million public sporting goods company was seeking to strengthen an under-exploited dimension of its business pertaining to institutional, or team sales via the acquisition of a platform company.

Engagement: We: 1) evaluated the optimal target upon its identification, 2) negotiated the purchase price and concluded a letter of intent, 3) handled the forgiveness of liabilities, 4) facilitated the closing process, and 5) prepared a comprehensive integration plan addressing six key assimilation dimensions.

Outcome: The acquisition was executed at a highly competitive price, and our client was afforded with a platform operation possessing the infrastructure, position and capability that was used to build this business.

By Offering Type

INVESTMENT BANKING

Liquidity Events

Setting: The owner of a leading regional metals reclamation company wanted to retire to spend more time with his grandchildren and hired Growth Partners to sell his company.

Engagement: We: 1) provided a set of expectations, 2) prepared compelling information materials, 2) assembled a nationwide candidate buyer group, 3) engineered a tight auction process, 4) maximized negotiations, 5) recommended the execution of a Letter of Intent, and 6) assisted with the closing process.

Outcome: Our client was afforded with a “record” purchase price from the most active acquirer within our client’s industry (the buyer had acquired 20+ companies before purchasing our client).

Capital Formation

Setting:  The ownership (father & son) of an industrial materials processing and distribution company were desperate to recapitalize based on restrictions being applied by its existing funding source.

Engagement: We: 1) evaluated information and provided a set of expectations, 2) prepared analytical materials, 3) assembled a group of alternative funding sources, 4) engineered a tight auction process, 5) maximized negotiations, 6) recommended the execution of a Letter of Intent, and 7) assisted with the closing process.

Outcome: Our client was afforded with a new funding source that provided both, greater funding capacity and a less restrictive set of terms and conditions thereby enabling the return to a smooth operating modality.

Buying A Company

Setting: The owner of leading manufacturer of machine tool accessories wanted to proactively build his company to further exploit its special assets while increasing its value.

Engagement: We: 1) identified a set of value-creation propositions, 2) determined the optimal proposition to best horizontally integrate the company and recommended an acquisition, 3) identified, nurtured and secured a target, 4) raised the funding, 5) facilitated the closing of the transactions, and 6) prepared an integration plan.

Outcome: Our client purchased a highly synergistic company that was 3x its size, and the combined company outperformed the initial set of projections by 20% thereby substantially increasing the value of the company.

STRATEGIC ADVISORY

Maximizing Existing Value

Setting: A high-tech company specializing guidance applications sought advisement in regard to both, how best to make decisions about a number of new opportunities, and the current value of the company to buyout a partner.

Engagement: We: 1) conducted an assessment of the operating, financial and strategic dimensions of company, along with the new business opportunities, 2) identified the key value drivers and detractors, 3) prepared the valuation of the company, and 4) prioritized all of the new business opportunities.

Outcome: Our client gained insight into the valuation-related dynamics of the business, had a valuation to predicate the partner buyout, and benefited from a clinical assessment of the new business opportunities.

Creating New Value

Setting: A design and engineering company serving multiple industries was interested in achieving its “next-level” development for purposes of increasing the company’s value and sought advisement.

Engagement: We: 1) conducted an assessment and defined a set of value-creating propositions, 2) identified the optimal proposition pertaining to vertically integrating, 3) determined the best outcome would be to affiliate with a top manufacturing company producing the designed structures to create efficiencies and margin protection.

Outcome: Our client enthusiastically endorsed the recommendation, and affiliated with a manufacturing company to create a design-build platform that became a compelling competitive force within its supply-chains.

Realizing Existing Value

Setting: The owner of a manufacturing company was interested in determining whether to pursue a liquidity event based on the prevailing conditions or defer such an action under different circumstances.

Engagement: We: 1) conducted an assessment of the company, 2) evaluated the value-creation propositions by assigning risk/reward quotients, 3) extrapolated the optimal proposition to create an expression of the company’s possible future value, and 4) recommended a sale event not take place at the current time.

Outcome: Our client was afforded with a dispassionate business-case whose conclusion was that it was best to continue to build the company to increase its value, and then consider a sale at the right time and in the right form.

A Quintessential Example

Setting: The owners of the leading west coast based international lodging company that contracts with US hotels in prominent US cities for purposes of being able to sell room capacity to off-shore travel agents primarily domiciled in China, were interested in obtaining guidance about their company’s next-level development given the narrowing of margins and the desire to maintain, if not increase, the value of their business in order to sell the company at some point. The owners contacted their Vistage Group Chairperson, and this person introduced us.

Engagement: Over a period of time, we engaged the following tasks and functions for our client:

1. We conducted a Creating New Value assessment of the operations, financial standing and strategic profile of the company, along with the set of historical, current and possibly future market dynamics that had been, and were changing the boundaries of the marketplace, and sentiments of customers, etc.

2. We developed a set of strategic and non-strategic value creating propositions related to taking the business to its next-level for purposes of increasing earnings of the proper quality and enhancing the growth profile in order to increase the short, and longer term value of the company.

3. We endorsed a horizontal integration alternative as the best build option given its risk/reward profile This proposition entailed the “bundling” of elements beyond just offering lodging capacity, but also, transportation, food, document execution, etc., and the creation of travel themes for purposes of creating travel product.

4. We assisted the company create this new “layer cake” and over a period of time, the company was able to transition from decreasing commissions on the sale of lodging (“filling an order”), to expanding revenues and margins through the creation of new “packaged” product that was valued by customers.

5. We were retained a few years later to represent the sale of the company to a multi-billion travel company headquartered in Spain that desired to purchase a value-added supplier of product to the Chinese market. The buyer assembled a strong team which included KPMG (financial), Deloitte (tax), Marsh (insurance) and Nelson Mullins (legal).

6. We: 1) assembled an equally strong legal and accounting team for our client, 2) discriminated each request selectively providing information, 3) prepared new projections and a build plan, 4) handled all diligence activities including visits, 5) provided daily advisement to our client, etc.

7. We, most importantly, were able to negotiate a maximized valuation and consideration exchange arrangement based on arguments about current and future value, and the necessity for our client to be indifferent between selling today or years later. The differentials between the initial, and agreed upon offer was as follows:

Initial LoI Offer Final LoI Offer
Purchase Price Multiple 6.2x 8.6x
Cash at Closing Percentage 60% 75%
Earnout Percentage 40% 25%
Earnout Term 3 Years 2 Years
Delivery Form Debt Free Debt Free / Cash Free
Non-Solicitation Period 6 Months 3 Months
Holdback Percentage 15% 5%
Holdback Term 2 Years 1 Year
Employment Contract 5 Years 3 Years

Outcome: This is a quintessential example of the power of our model and approach. We assisted our client with building their company to generate new and high-quality revenue and earnings growth, and then at the proper time, maximized the sale of the company given our deep knowledge of the company and its potential, thereby enabling us with special leverage in the negotiation process. Our client benefited greatly from this integrated approach as the build, and the transaction outcomes exceeded their expectations. We truly optimized our client’s opportunity.

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