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Strategic Financial Group LLC: Rolling Up & Cashing Out

 
Premium Value Received for Multi-National

Roll-Up of Three Medical Device Companies

  Medical Device Distributor 2001(A) 2002(A) 2003(A) 2004(A) 2005(P)
1 Annual Revenues - $ Mil $1.372 $3.156 $8.680 $11.732 $14.665
2 Cash Flow (EBITDA) - $ Mil $0.246 $0.500 $3.156 $4.338 $5.437
3 Cash Flow (EBITDA) margin - % 17.9% 15.8% 36.4% 37.0% 37.1%
Client's initial value expectation: $14-16 million
 
After receiving over 60 inquires to our focused campaign we decided that we generated more than enough interest and subsequently discontinued our marketing efforts and invited offers. Shortly thereafter the offers were submitted by six bidders. One month later the Client decided to accept the 6th offer of $27.9 million, in cash. Although we had received a higher offer, the $27.9 million bid was from a top notch group with substantial experience in the medical device arena.
   
The Power of Private Auctions
  Bidder Description Offer Prices & Terms Total NPV
1 U.S. Private Equity Group $15.5M cash, $2.5M note $18M $18M
2 $200M U.S. Public Company $15M cash, $5M - 5 year note, $4M - 2 year earnout $24M $23.6M
3 $10B European Public Co $19M cash $19M $19M
4 U.S. Private Equity Group $25M cash, $5M - 3 year note $30 M $29.1M
5 $200M U.S. Public Company $25M cash, $7.9M - 3 year earnout $32.9M $31.6M
Accepted Offer
6 U.S. Private Equity Group; $27.9M cash $27.9M $27.9M
         

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