Case Studies

The Situation

Sale of a Mapping Services Company

An information technology company was owned equally by two individuals, one of whom was nearing retirement and anxious to do so; and the other, the President, who was significantly younger but was ambivalent about remaining with the company. Though profitable, the company was under capitalized and the President had become burned out with the cash flow issues. Neither the President nor the company had the resources required to fund the older owner’s retirement or to purchase his interest in the company. Nor did he have the wherewithal to recapitalize the company.

The Alpha Omega Solution

Alpha Omega began by not only valuing the company based on past performance, but also estimating the value of a new OEM relationship that had not yet begun to bear fruit but had great potential. The listing was structured as an asset sale based on history and an earnout based on the future results of the OEM agreement. Alpha Omega then contacted hundreds of strategic and job seeking buyers; and engaged over twenty potential buyers in serious negotiations. Four offers were presented to the owners with a strategic buyer being selected who had synergistic products in the same marketplace.

The Results

The older owner’s share of the proceeds is funding a comfortable retirement; whatever the earnout yields will be “icing on the cake”. The younger owner accepted the acquirer’s offer for continued employment as General Manager of the acquired company with a minority ownership interest. He is refreshed by the availability of capital and support and the elimination of personal liability. He plans to continue indefinitely.

Disclaimer

All project history examples are guaranteed factual. In some cases, names of companies are excluded at the request of the client or can only be disclosed after execution of a non-disclosure agreement acceptable to the client.

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