Case Studies: M&A Advisory

Target Company Indentification

Case: Exploring new sectors for a loan servicing operation

SITUATION

A loan servicing operation faced diminishing revenues as regulatory and legislative changes threatened its core business, and it sought to diversify into adjacent markets. A prior Transom engagement had identified six high-priority verticals and determined which were better suited for organic development and which for entry through acquisition. Subsequently, the client requested help in identifying acquisition targets and cultivating a pipeline of proprietary deals.

our approachOur Approach

Transom conducted detailed market scans and generated a ranked target list for each prioritized vertical.  We then engaged owners and management at target companies, gauged their openness to a potential transaction, and cultivated relationships.  We also developed a pitch deck describing the loan servicer’s acquisition value proposition and built the infrastructure to enable ongoing acquisitions, including document templates, valuation models, diligence processes, and vendor relationships.

our impactImpact

The client has a steady pipeline of proprietary deal opportunities and is closing its first acquisition, with plans to conduct 2-3 additional acquisitions within the next year.

Target Diligence Support

Case: Refining and validating target selection

SITUATION

A private equity firm was considering purchase of a commercial furniture manufacturer with annual revenues of approximately $500 million. The investment committee was split on the deal, largely due to different perspectives on the target’s revenue growth potential and prospects for operational improvements.

our approachOur Approach

To help the committee with its decision-making, Transom assessed the competitive landscape, growth opportunities and potential operational improvements, assembled industry perspectives through in-depth discussions with more than 30 subject matter experts, deployed a team to the target’s facilities to assess operations and talent, and built a valuation model to compare against the negotiated pricing.

our impactImpact

Transom validated the attractiveness of the deal.  We identified $10 to $15 million of direct EBITDA impact from operational improvements. We were able to highlight several previously undisclosed challenges discovered via interactions with target employees, which the fund leveraged in final negotiations.

Post-Merger Integration

Case: Creating a unified post-merger organizational structure

SITUATION

A private equity firm was seeking to roll up three large, established players in the demolition and remediation industry. Geographic expansion (i.e., a national footprint) was central to the investment thesis, but the physical dispersion of the acquisitions presented major integration challenges.

our approachOur Approach

We served as PMO for platform integration, driving key integration initiatives and serving as the communications center and clearinghouse for employee and customer concerns. To create accountability, Transom developed cascading dashboards with metrics integral to the strategy. We also codified and syndicated best practices from across the precursor companies, refined the organizational structure and developed a brand positioning for the unified company.

our impactImpact

The private equity firm successfully completed its highest priority integration initiatives within just three months.

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