- A public company traded on the Australian Stock Exchange that was forced to pursue liquidation proceedings needed assistance in finding a buyer for their crown-jewel subsidiary, Alpha Technics, a U.S. based entity they had acquired a decade earlier.
- While Alpha was based in the U.S., it had a complicated operating structure as it conducted its manufacturing through two international factories, one in Mexico, owned by the U.S. corporation, and one in mainland China, owned through a separate holding company based in Hong Kong.
- In addition to requiring an all-cash deal to maximize the payout to their shareholders, the parent company hoped to find an acquirer that would allow Alpha’s senior management team, which did not own any equity and had performed exceedingly well for the parent, obtain an ownership stake.
- The De NES Partners principal who led the transaction proceeded to contact a group of domestic and international acquirers and received six formal offers for the business
- After receiving bankruptcy court and shareholder approval to pursue a deal due to a favorable initial valuation, we commenced with a new round of bidding to obtain a finalist.
- During this final bidding process, we continued to reach out to prospective acquirers and found several new groups that helped push the valuation.
- The final transaction, spurred by the new round of bidding, delivered a valuation that was 50% higher than the top valuation from the six initial offers.
- In order to close the transaction, The De NES Principal helped coordinate a team of attorneys and advisors in the U.S., Mexico, Australia, Hong Kong and mainland China, through complicated legal, tax and environmental issues to achieve a deal that satisfied all parties.
- Just as importantly, we were able to negotiate an opportunity for the Alpha management team to acquire 20% of the common stock of the business, partially financed by Gen Cap America.
- Alpha continues to thrive under its Gen Cap America ownership, and the ownership stake purchased by the senior management team, along with the rest of the Company, has commensurately increased in value.
* This transaction was completed by a De NES Partners Principal while at a predecessor firm