A 7 Figure Purchase Price Increase
Overview
Exodus Business Solutions (EBS) was engaged to represent a company manufacturing power amplifiers for UAV’s and other defense-related applications.
The Seller was already under offer for $4M and was referred to EBS by a former client who successfully sold his company with the firm. Exodus Business Solutions was engaged to “land the aircraft” and represent the Seller’s interest.
Transactions such as this one must be handled with extreme care from sell-side representatives as a potential acquisition is already in play. However, for the buyer, the risk of handling a complex legal and financial situation such as this one without proper representation is almost always the greatest threat.
Although the company was already under offer with a final purchase price that was agreeable to the founder, the shareholders felt the company was being grossly undervalued. Due to this sentiment, they contested moving forward with the current Buyer’s offer.
The Buyer, a company operating in the public market, was seemingly unwilling to increase the proposed purchase price.
Exodus was hired to represent the shareholders as a fiduciary advisor and the team felt it was necessary to do a deep dive on the market, technology, and nature of the transaction.
Upon completion of EBS research, it was determined that the primary motivation behind the acquisition from the buy-side was technology-driven.
With that, further market analysis was ordered to ascertain whether other suitable buyers existed in the market. Several were found and contacted confidentially with “teaser level” information.
Within 30 days, an auction-type environment was created between multiple public companies interested in the technology owned by the Seller.
Exodus successfully negotiated the offer from $4M to $14M with the original Buyer over the course of 45 days for a bump in purchase price of ten million.
EBS was able to achieve far more than the Seller(s) imagined by understanding the buyer’s motivations, following strategic processes, creating a competitive environment, and most importantly listening to the client(s) and acting on their behalf.