Get to the “next level” by being acquired / Sell Side
Challenge: A regional reseller, systems integrator, and managed services provider was evaluating various strategies to take business to the “next level.” It needed to make a critical decision: Was the company better off “going it alone” and trying to compete with larger regional, national, and international firms, or identifying a strategic partner and being acquired.
Solution: The Company hired Big Change to identify a strategic acquirer with a strong national presence and balance sheet that would enable the Company to expand its customer base, enhance existing customer relationships, retain key employees, and recruit additional sales and technical resources.
Plan: From there, a strategic sales plan was developed to identify qualified acquirers that had a strong regional or national presence, healthy balance sheet, broad customer offerings and services, and technical training programs.
The plan included a description and overview of qualified acquirers and target companies on a regional and national basis, including recent M&A activity and the valuations associated with each transaction. Big Change identified and contacted potential acquirers on a selective basis to ensure strategic fit. Within 12 months the acquirer was identified and a deal was negotiated and the transaction closed.
Deal Structure: The deal structure was a combination of cash at closing, seller paper (note), employment agreements for key personnel and owners, facility lease agreements, and a performance based earn-out.
Results: Synergies where achieved with solid performance and the seller received performance-based earn-out cash compensation every year for four consecutive years.