CAPTURE THE VALUE THAT FALLS BETWEEN THE CRACKS
Today’s deal teams are highly professional and highly specialized. Lawyers handle risk and deal terms. Consultants cover the market and competition. Accountants handle quality of earnings. Recruiters fill skill gaps. Technical specialists handle technical diligence and can step in as interim management. Sponsors own the investment thesis.
NMC looks at what falls between them, and takes a view of the whole transaction:
- Upside others missed
- Under-exploited assets
- Lateral opportunities invisible to industry specialists
- Cost efficiencies left on the table
- Better ways to structure and finance the deal
Examples
Global media and entertainment group
Co-originated, structured and raised all the capital for a $31BN bid for assets of a conglomerate seller, in 23 days. Moved fast, attached key management, identified the upside, and structured around negative covenants and adverse tax consequences. At the time it was more equity than had been committed to any LBO in history, including RJR Nabisco. Ultimately lost to a rival bidder.
Global telecommunications network
Assembled the telecom consortium and management team to acquire a loss-making undersea cable network at a 95% discount to its recent $4.3BN construction cost. Rebuilt the P&L from contracts and detailed the $58M of cost eliminations that enabled the transaction. The asset was merged into a consortium partner, whose market value rose $2.5BN on close.
Mass-market cosmetics brand
Built the business case and initial credit pack to buy an under performing subsidiary of a pharmaceutical group. Bought at 1x revenue ($744M) and sold six years later at more than double the revenue multiple, for a 5x+ MOIC.
Specialty materials division of a European conglomerate
Organized a management buyout of a non-core division and arranged a fully funded, private equity-backed offer of $325M.
[Discuss an acquisition]