CASE STUDY:
System Dynamics, Inc.
- Successful and rapid sale of a modestly-sized private business to a large multi-national public company
- Increased deal price over 35% from initial bid to closing price
- Initial bid was higher than owner’s expectation absent a banker; hence mere presence of banker was beneficial
- Proper positioning and effective negotiations
- Closed and funded deal quickly – within four months of engagement start
- Accelerated timeline partly driven by year-end tax considerations
Lead Banker: Bob Maggiacomo
“Synergy Advisors was key to my success in selling my small closely-held software business to a Fortune 500 company. With Synergy’s counsel and assistance I was able to maximize value, and they were a key factor in my being able to close the deal on an accelerated timeframe which was crucial due to tax considerations. Synergy’s senior bankers were responsive on nights and weekends to get it done.”
Gordon A. Feingold, Owner & CEO, System Dynamics
Situation Overview
Entrepreneur / owner expressed interest in monetizing business to reduce portfolio concentration risk and retire to pursue other interests. SDI was a provider of instrumentation software driving primarily laboratory equipment. Sole supplier of software component to Agilent (NYSE: A), a very large multi-national company, for an important product line. High customer concentration as Agilent represented the vast majority of SDI’s annual revenue.
The Outcome
Although there was a natural incumbent buyer (Agilent), Synergy maximized value by creating a competitive process – prepared marketing materials, financial model, etc. and simultaneously approached other leading multi-national equipment competitors – and negotiating effectively against a behemoth.