Omni-channel E-Commerce IT Solutions Company
M&A
Client: A leading US-headquartered, Mexico-market focused omni-channel E Commerce solutions implementation and software development provider with offices in Mexico, Argentina and the US.
The Problem: Client had spent 15 years building the company into one of the most experienced E-Commerce providers in Latin America. In order to maximize value to shareholders and access additional capital for growth, Client desired to sell part or all of the company.
The Solution: Serve as the Client’s strategic advisor and conduct an internal preparation and strategic alternatives, the goal of which is to execute a value-maximizing solution for the shareholders. Result was to combine with a much larger IT services entity, which was seeking to enter the E-Commerce solutions marketplace in Latin America and the US.
Key Solutions / Deal Highlights
The Problem: Client had spent 15 years building the company into one of the most experienced E-Commerce providers in Latin America. In order to maximize value to shareholders and access additional capital for growth, Client desired to sell part or all of the company.
The Solution: Serve as the Client’s strategic advisor and conduct an internal preparation and strategic alternatives, the goal of which is to execute a value-maximizing solution for the shareholders. Result was to combine with a much larger IT services entity, which was seeking to enter the E-Commerce solutions marketplace in Latin America and the US.
Key Solutions / Deal Highlights
- Carried out extensive internal due diligence, SWOT analysis and discussion of client priorities and goals
- Developed robust financial models and customized deal documents
- Conducted internal analysis from perspective of buyer for key valuation items, including growth prospects, customer concentration, profit by customer-product-employee basis and contract runoff analysis
- Built extensive, detailed database of potential buyers in the US, Latin America and Europe
- Carried out targeted marketing campaign; leveraged existing relationships with private equity firms, industry participants and other stakeholders to gain high level access and build credibility with potential buyers
- Generated credible interest from two private equity-backed IT service companies in Latin America and two strategic firms in Europe
- Advised Client on strategic issues relating to: the choice of partner; the negotiation, structuring and closing process; and specific structuring and tactical issues such as compensation schemes, earn-outs, EBITDA targets, equity structures.
- Negotiated LOI outlining deal terms with favored buyer, resulting in structural achievements such as: i) floating EBITDA valuation metric; ii) increased upfront cash per Client desire; and iii) EBITDA re-definition to include additional deal value
- Managed all elements of M&A due diligence process, including financial, legal, accounting, insurance, human resources, contract, customer interviews, benefits, tax, subcontracts, A/Rs, A/Ps, bonuses, 401k plan, liability management, fixed assets, environmental issues and employment agreements
- Created earn-out model to assess, negotiate and plan for 2 year payout period for portion of proceeds
- Negotiated working capital adjustment and final EBITDA calculation mechanics