Diligence Case Study 1
Sometimes the Best Deal May Be the One Not Done!
Diligence Case Study 1
Client
Private Equity Owned Strategic Acquirer
Industry
Waste management and recycling services
Buyer’s Transaction Objectives
A synergistic add-on to platform company — EBITDA growth, multiplier increase, resulting in higher valuation; vertical integration; geographic expansion, and revenue diversification, resulting in reduced operational risk.
Seller’s Transaction
Recapitalization, capital return, liquidity, and growth capital at a reduced cost; risk mitigation.
Target Characteristics
Expansion stage company and related capital needs; high growth infrastructure and regulatory compliance challenges; safety management, increased risk, and insurance costs.
Assignment
Financial due diligence/quality of earnings assessment; calculation of working capital target and determination of capital expenditure requirements; preparation of pro forma projections.
Transaction Pricing
Based on revenue target (an implied EBITDA multiplier), including earnout contingent on future revenue thresholds.
Other Deal Points
Financial due diligence/quality of earnings assessment; calculation of working capital target and determination of capital expenditure requirements; preparation of pro forma projections.
We Preserve Value and Reduce Risk of Loss
Our depth of knowledge, experience, and expertise facilitate the successful and quick close of transactions when warranted. But, we have also surfaced risks, issues, and concerns – even including fraudulent accounting and financial reporting. Without question, value has been preserved and loss was prevented by our proactive identification of those “deal breakers.” When performing meticulous and comprehensive financial and business due diligence that is well beyond the routine, or in offering independent and objective transaction advisory services, or in post-merger integration and implementation assistance, Avant® always provides value.