Corporate Finance Advisory
Our clients are typically
prospective buyers or investors who want assistance in evaluating a
deal. However, we have also assisted sellers in developing strategies
and business plans, identifying financial and strategic investors, and
Illustrative projects include:
- Evaluating public securities.
The client had
identified five stocks, all major public companies, as possible candidates
for investment over a three to five year time horizon, and wanted
a recommendation of which stock to select. In reality, these companies
were all possible buyers of this client's cable operations. This was
a particularly challenging assignment, since the client participated
in the industries in question and had direct knowledge of the players,
while the area was new to us.
This project, which was the start of a continuing relationship, included a fundamental analysis of cable/telco convergence, an assessment of the investment candidates, and a recommendation of which stock to select. During the sale of its $1.4 billion cable business, the client also called us to review the work of its investment bankers, which included the valuation of convertible preferreds and options. (Incidentally, the client sold the business to a company other than the one we chose for cultural reasons, but had they selected the buyer we recommended, they would have realized $2 billon more over the target time horizon)
- Analyzing and valuing
private companies. The
client, a media company, had a 50/50 joint venture in which it appeared
that it would have the opportunity to buy out its partner. We determined
the value of the company (approximately $1.5 billion) and analyzed
the attractiveness and likely terms of various financing options (public
stock, high yield and bank debt) and assited in assessing alternatives
from a financial and tactical standpoint. We concluded that the other
side's price expectations were excessive, and, at least for now, renegotiating
the business terms of the partnership would be more attractive.
- Raising capital.
Our client was the management of a technology unit of a commercial
bank that was slotted to be spun out, but the sales effort had languished.
We evaluated the potential of the products, developed the sales story
and the offering memorandum, and approached potential investors. The
unit succeeded in raising funds, completed a second round of funding,
and is now a public company.