Financial Challenge:
Unprepared for Sale of Business

A provider of software as a service to the pharmaceutical industry was challenged with funding the cost of the growing demand for its niche service; it needed cash for the continued build of customer service, technical support, and business infrastructure.

Management was also concerned that it didn’t have the expertise needed to grow its organization. Management and the company’s board decided that to ensure the survival of the company, a sale to a larger organization would be an ideal strategic move. Larger players were looking for complimentary businesses and could use their infrastructure to support acquired companies’ development efforts. A sale could be a win-win for both organizations. Their challenge – they did not have the internal capabilities to manage a sale transaction and were far behind in the financial and organizational structure needed to entertain prospective buyers and prepare for a diligence process.

SBC SOLUTION

The company engaged SBC’s Transaction Advisory Services to assist in the coordination of sale activities from the planning stage to the eventual close. SBC’s initial efforts were directed at organizing the company’s internal business and accounting records. SBC directly engaged in planning activities with the company’s accountants and lawyers. The objective was to position the company to be able to survive a thorough diligence process by a prospective buyer. Secondly, SBC worked with management and bankers to organize its business and sales presentation materials including historical and prospective financial information, trends, and key performance indicators. And lastly, during the diligence and agreement drafting process, SBC coordinated activities to keep the process moving while ensuring that business, accounting and tax deal structure issues were appropriately identified and incorporated into the transaction documents. No company sale is ever a smooth and easy process, but in this case, SBC’s support and direction enabled the company to initiate and manage the process and realize a successful sale to a strategic buyer.