Case Study # 6: Due Diligence and Acquisition Services
The Client: A privately held holding company that was seeking to become publicly traded and had entered into over 40 letters of intent to acquire other privately held companies.
The Task: Serve as Chief Financial Officer (CFO) and Director of Mergers and Acquisitions. Evaluate the potential acquisitions, determine which to proceed with, and assist the company in its goals of becoming publicly traded.
Issues: Limited resources for acquisitions and time in which to complete public filings. Additionally the holding company had a small management team in diverse locations.
Plan of Action:
Coral Capital Partners immediately began the process of evaluating the 40+ potential acquisition targets. Simultaneously Coral Capital Partners revised the holding company’s plan to become publicly traded and in the process reduced the estimated cost by over 50%.
Coral Capital quickly identified an optimum initial acquisition to serve as the platform (“the platform company”) to which other acquisitions could be added in a synergistic manner. The majority of the potential acquisition targets were subsequently eliminated due to a variety of factors including geographic, management, and other factors. The remaining acquisition targets had the terms of their acquisitions renegotiated to allow for the completion of their acquisitions following the completion of the company’s objective of becoming publicly traded.
Coral lead the negotiation and closing of the acquisition of the platform company. Coral then oversaw the subsequent audit of the platform company’s financial statements for incorporation into the holding company’s financial statements to be contained within the company’s SEC filings.
Additionally Coral Capital located the necessary legal counsel and PCAOB registered audit firm the holding company required in order to complete its task.
The holding company successfully completed its platform acquisition and subsequently becoming publicly traded. The holding company successfully completed several other acquisitions before deciding to be acquired by its management in a management buyout transaction.