CASE STUDIES

CASE STUDIES 2017-06-20T16:36:09+00:00

Maximizing Value for Our Clients

 

 

 

 

 

Miller & Associates and Dedo Interactive - Sell Side

Miller & Associates and Dedo Interactive - M&A Case Study - Sell-Side Transaction

Standing Beside Our Clients, Every Step of the Way

Featured Case Study – Sell-Side Advisory

Technology

Miller & Associates and Dedo Interactive are leading business intelligence and user-experience companies. Through human capital, the Companies developed unique expertise in data warehousing, Big Data and data analytics. SDR Ventures was enlisted as the exclusive sell-side advisor for both Miller & Associates and Dedo Interactive.

As the SDR team began to prepare the Companies for sale, it became evident that the market likely would expect to see additional detail and clarity in the Companies’ financial statements and reporting packages. Fortunately, due to SDR’s financial-minded approach and persistence in the project, we were able to help the Companies fine-tune their financial statements and reporting packages and therefore more confidently bring Miller & Associates and Dedo Interactive to market.

From LOI execution, through buyer diligence and close, the revised financials withstood buyer scrutiny and helped all parties achieve high confidence to close. The deal was ultimately closed with a former owner of an IT consulting company, who was looking to once again enter the space. Because of the closed transaction that SDR helped facilitate, the sellers were able to realize significant value generated through over 10 years of ownership.

Hollandia Produce - Sell Side

Hollandia Produce - M&A Case Study - Sell-Side Transaction

Unique Deal Structure Creates Win-Win Scenario for CEO

Featured Case Study – Sell-Side Advisory

Consumer Products

Founded in 1970 in Carpinteria, California as a fresh-cut flower producer, Hollandia Produce evolved over the past 45 years into a prominent rooted-greens producer with several highly specialized, hydroponic greenhouse facilities.

Hollandia’s CEO desired to find an exit strategy that would reward loyal employees and capitalize on the Company’s unique positioning and high growth potential. For Hollandia, the answer was to pursue a leveraged Employee Stock Ownership Plan (ESOP).

To help Hollandia capitalize on its unique growing and packaging process, and its high growth potential, SDR utilized its extensive consumer-products network to locate two qualified investors (Mosaic Capital and The SEAM Fund), each of which fit the financial and ESOP-related goals of Hollandia.

Hollandia’s CEO was given the exit opportunity that he was seeking while ensuring that he would be able to guide the Company as it transitions into its next phase of ownership. The unique deal structure also allowed Hollandia’s loyal employees to be rewarded for their years of work, while positioning them to continue to be financially incentivized for their efforts.

AlphaCM - Sell Side

AlphaCM - M&A Case Study - Sell-Side Transaction

Underserved Market; Outsized Results

Featured Case Study – Sell-Side Advisory

Healthcare

Since 2005, North Carolina-based AlphaCM, Inc. has been developing and implementing software solutions and services that ensure the success of mental health and intellectual/developmental disability providers and payers. From the outset, AlphaCM provided high-quality solutions for an underserved, yet growing, niche market. Today, the majority of Managed Care Organizations (MCOs) in North Carolina and surrounding states are using an AlphaCM software solution. The AlphaCM management team selected SDR Ventures to serve as its sell-side advisor in order to help capture the value that it built in the Company.

SDR ran a thorough sell-side process that included locating and targeting a diverse group of potential buyers. AlphaCM’s strong market share in North Carolina and surrounding states was proof-positive of the Company’s superior software platform, but SDR was able to demonstrate the potential for national reach as well. Ultimately, Mediware Information Systems, a portfolio company of Thoma Bravo and a clear strategic fit for AlphaCM, presented the most compelling transaction option for the shareholders, employees and customers.

For the AlphaCM management team, this transaction represented the culmination of years of dedication and hard work in creating a unique, truly disruptive healthcare-technology solution and in building a strong company to support it. The transaction not only met the goals of AlphaCM’s management team, but it also helped to position AlphaCM as a whole for more rapid, high-profile growth and success on a larger scale¬.

Rubadue Wire - Sell Side

Rubadue Wire - M&A Case Study - Sell-Side Transaction

All About Family

Featured Case Study – Sell-Side Advisory

Manufacturing

Launched in 1977, Rubadue Wire Company is a pioneer in the wire and cable industry, having created the world’s first triple-insulated wire. Rubadue Wire has since expanded to offer numerous other solutions. SDR Ventures was engaged by Rubadue to facilitate the sale of the company and, of utmost importance, to preserve the family-run spirit that the company had established over the past 38 years. Also, while many of the stakeholders in the family were seeking an exit, some still wanted to remain involved going forward.

With these factors in mind, SDR ran a full sell-side process. The SDR team built an extensive list of qualified buyers, created in-depth materials to educate the targeted buyers, approached the market, gathered and vetted more than a dozen offers and eventually helped lead Rubadue towards a successful close with Pelican Wire Company.

But SDR’s role did not stop there. By keeping the family nature and unique shareholder goals of Rubadue top-of-mind throughout the transaction process, not only was the ownership team able to exit and achieve its financial goals for the transaction, but Rubadue’s CEO was able to continue in her present leadership role at Pelican’s new sister company. Meanwhile, the Rubadue employees were able to join a larger family at Pelican with an increased capacity for growth.

HealthTrans - Sell Side

HealthTrans - M&A Case Study - Sell-Side Transaction

SDR’s Small Deals Become a Big Deal

Featured Case Study – Sell-Side Advisory

Healthcare

In 2002, HealthTrans, a Colorado-based pharmacy benefit management company, contacted SDR for assistance with a transaction. Over the next decade, SDR Ventures acted as strategic consultants, trusted advisors and confidants to the HealthTrans team. While we worked together, HealthTrans grew from 18 employees in 2004 to 263 in 2011.

All in all, HealthTrans trusted SDR to assist it through 10 separate transactions, including three acquisitions, four financings, two shareholder recaps and eventually the sale of the company in January 2012. We were pleased and honored to put our industry expertise to use as HealthTrans’ sell-side advisor throughout the transaction, the result of which was a tremendous win for the HealthTrans shareholders and the 12th largest healthcare deal of the year.

Deep Rock Water - Sell Side

Deep Rock Water - M&A Case Study - Sell-Side Transaction

SDR’s Process Maximizes Value

Featured Case Study – Sell-Side Advisory

Distribution

Deep Rock Water Co. produces and distributes bottled water products, water coolers, water filtration and purification systems, and a variety of other sundry products, to business and consumer customers in the Rocky Mountain region. After the sale of the company in 2004, Deep Rock faced hardships with years of decreasing revenues, leadership changes and a declining market.

In 2010, SDR principal Andy Limes joined a Deep Rock Water board appointed to help build value for the company. Within a year, the board committee and company re-established effective sales and marketing efforts, increased awareness of other product lines, and restructured the Finance/Accounting business unit. In addition, as a part of the board’s initiative, the SDR team executed a sell-side process that resulted in the successful sale of Deep Rock Water Co. to a strategic buyer.

SDR Ventures served as Deep Rock’s trusted advisor, providing valuation consulting and transaction advisory services throughout the sale process. SDR worked to develop Deep Rock’s sale strategy, communicated with potential buyers and ultimately worked to help negotiate equitable terms with DS Waters in a sale process that was consummated in less than 120 days.

Qualmark - Buy Side

Qualmark - M&A Case Study - Buy-Side Transaction

 

 

 

 

 

 

Off-the-Radar Opportunities

Featured Case Study – Buy-Side Advisory

Manufacturing

Qualmark is a leading manufacturer of accelerated reliability test equipment. As part of an evolving business plan, Qualmark was seeking to purchase a strategic company to help expand its offerings. At the time Qualmark contacted us, they had so far been unable to find a match for its needs.

Through our proprietary buy-side process, we were able to identify numerous compelling off-the-radar opportunities, each offering significant strategic value to Qualmark as both investments and business assets. After a thorough evaluation of the options we presented, Qualmark elected to acquire a corporate “orphan” that could provide immediate product-line expansion, expand its customer list and strengthen its presence in several international markets.

SDR served as Qualmark’s buy-side advisor throughout the transaction process, navigating the seller’s corporate structure and presenting a compelling case to the CFO and management team that the proposed acquisition would be a win-win for both buyer and seller. Under our guidance, the transaction moved smoothly and resulted in satisfied parties on both sides.

Western Paper Distributors - Buy Side

Western Paper Distributors - Buy-Side Transaction

Fostering Long-Term Relationships

Featured Case Study – Buy-Side Advisory

Distribution

Western Paper is an award-winning provider of distribution services and products for the washroom, janitorial, food service and lodging industries. Since 2010, SDR has been helping to identify strategic acquisitions that will continue Western Paper’s successful role as one of the largest independent distributors in the industry.

SDR principals work closely with Western Paper’s management team to ensure that our goals are in line with the company owner’s goals of growth and expansion. By outsourcing the identification, negotiation and finalization of these acquisitions, Western Paper is free to focus on the strong organic growth and day-to-day management of a large and growing enterprise. This six-year relationship has led to two successful buy-side transactions that have helped increase Western Paper’s distribution services and customer base across a broad region of the western United States.

Cohio Ventures - Buy Side

Cohio Ventures - M&A Case Study - Buy-Side Transaction

Identifying Opportunities

Featured Case Study – Buy-Side Advisory

Private Equity

Cohio Ventures, LLC (“Cohio”) is private-investor group based in Denver, Colorado. In 2012, Cohio asked us to identify and help it acquire a profitable Colorado-based business that has a long operating history within certain targeted industries.

We initiated a buy-side search using our proprietary method, and found a terrific match for our client’s investment wishes: Mountain Tech Manufacturing Inc., a manufacturer of precision-machined and assembled components for the healthcare and aerospace sectors. SDR served as buy-side advisor throughout the successful transaction process.

All Copy Products - Capital Formation

All Copy Products - Capital Formation

$4.1 Million Loaned Over 10 Years

Featured Case Study – Capital Formation

Business Technology Solutions

All Copy Products, Inc. is a Colorado-based equipment distributor offering technology products for copying, scanning, faxing, postage metering, data archiving, electronic filing and storage solutions, as well as equipment, service, support and supplies. The company is known for its commitment to providing world-class customer service to its clients.

Since 2002, All Copy has trusted SDR Ventures to act as underwriter, financial advisor and financing principal throughout four subordinated debt loans and one acquisition. These loans, ranging from $750,000 to $1,500,000, have facilitated the growth of All Copy into an award-winning company on the leading edge of business technology solutions.

Office Evolution - Capital Formation

Office Evolution - Capital Formation

Capital Stack Evolution

Featured Case Study – Capital Formation

Business Services

Broomfield, Colorado is home to Office Evolution, a provider of virtual office services, executive suites, temporary offices, conference and training room rentals and business center locations across the Front Range. SDR has been helping Office Evolution develop and maintain a solid capital stack for over a decade.

At the start of our relationship with Office Evolution, we acted as principal investor, providing the equity capital it needed to establish the business. Over the next few years, SDR helped raise both debt and equity capital to support the growing working capital needs of an expanding company. From seed-stage equity to growth capital, capital investment dollars to mature lending relationships, SDR has helped Office Evolution develop and iterate an optimal capital stack. Now over ten years later, Office Evolution has become a leading virtual office provider, thanks in part to SDR’s commitment to engineering a sustainable balance sheet.

Carrier Dealers - Performance Exchange

Carrier - Enterprise Valuation

$500,000 in Recurring Annual Savings

Featured Case Study – Performance Exchange

Distribution / Trucking

For the past five years, SDR has moderated a Performance Exchange comprised of 10 non-competing Carrier Dealers. The 10 members, led by a dedicated SDR principal, have met twice per year and received quarterly composites detailing financial benchmarks and best practices.

The group has continually improved its collective average across nearly every metric and the members have taken advantage of shared best practices. Further, in 2008, SDR assisted the Exchange members in the creation of a captive insurance. As a direct result of the implementation of the captive, the 10 members are saving a combined $500,000 annually in insurance premiums alone.

Condit Exhibits - Advisory

Condit Exhibits - Enterprise Valuation

Enterprise Valuation

Featured Case Study – Strategic Advisory

Manufacturing / Business Services

Since its beginnings in 1945, Condit Exhibits has provided unique client solutions, including trade show exhibits, museum exhibits, television studio, corporate environment, kiosks and other custom projects.

In 2007, Condit Corporation approached SDR to perform an enterprise valuation that would assist the shareholders in understanding the market value of the company and help assess strategic options.

Within months of the valuation, Condit received an unsolicited offer.

Our valuation helped the shareholders assess and react to the offer from an educated and enlightened viewpoint. Thanks in part to our relationship with Condit, the sale was ultimately consummated on terms that exceeded shareholder expectations.

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