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Mergers & Acquisitions
A European private equity fund was approached by a U.S. strategic buyer to sell one of its industrial portfolio companies. The strategic buyer offers an interesting price but wants exclusivity to move further.
The industrial portfolio company was in the beginning stages of recovering from a significant restructuring program, and its full earning potential had not yet been proven. However, the private equity fund was about to begin fund raising for a new fund and wanted to return some capital back to its institutional investors.
We analyzed the industrial company and highlighted the earning power of the business when the one-time restructuring costs were extracted from a "normalized" earnings stream. We then helped develop a presentation of the industrial company that properly reflected its value as a leader in its market with attractive growth potential. While we entertained preliminary discussions with the U.S. strategic buyer to clarify several issues in its offer, Novahill discreetly talked to the top 3 other strategic and selected financial buyers to ascertain a sense for the market's interest in the industrial company.
The European private equity fund sold the business to the U.S. strategic buyer at a higher price than was initially offered and well above indications of interest from other qualified buyers.
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