Private Placement/M&A

Situation

A leading health care company with an aggressive growth strategy turned to our professionals for help as a result of rapid growth outstripping their financing capacity. The company’s financial and ownership structure was complex and made it difficult to assess the company’s cash flow and cash needs. Shortly after working with the client to address the perceived financing need, our professionals quickly identified that a debt crisis loomed due to unfunded obligations and commitments.

In addition, due to the high financial risk of the business, one of the partners wanted to get out to reduce his financial exposure. As the company continued to grow and as industry consolidation occurred, the remaining owner voiced a desire to cash out of the business.

How our professionals helped

Our professionals managed to help the company stave off a major liquidity crisis and covenant default by quickly managing the company’s cash flow and negotiating a principal moratorium with its bank. Our professionals assisted the company in recruiting a CFO with the requisite skills to manage its complex financial and ownership structure. And our professionals negotiated and structured a buyout of one of the minority partners and for a second, structured a partial buyout involving the exchange of a business interest in an unrelated business for a share of the remaining business.

After solving the company’s previously unrecognized bank crisis, our professionals completed the company’s first private placement with a major US institutional investor. Our professionals closed additional follow-on financings as the company continued to grow. Throughout this process, our professionals acted as financial advisor in connection with its sale to a NYSE listed company.

The result

Following the sale, the company continues to prosper under new management and the shareholders were able to realize significant wealth.