DIVESTURE (SHELL) CASE STUDY
Objective: To sell a non core Excess & Surplus (E&S) lines subsidiary as a “shell” company. Maximize the value of the E&S authorizations over book value.
Our Process: Led by a senior advisor, Merger & Acquisition Services undertook the following initiatives:
- Worked with the company to understand the market for E&S lines “shell” companies and presented valuation comparables
- Drafted a Confidential Informational Memorandum (CIM) and Bid Packet
- Began the marketing process by utilizing M&A’s industry contacts and proprietary database. In addition, the property was highlighted in both our email and hard copy Newsletter
- Provided interested parties with CIM and Bid Packet and responded to each group to answer specific questions relating to the company and/or the bid process
- Provided seller with a due diligence checklist and organized the diligence material in our Electronic Data Room
- Provided potential buyers, who had signed the appropriate confidentiality agreements, with access to the Data Room
- Set a firm Bid Deadline and followed up with each potential buyer to assist in the preparation of their respective bids
- After receiving four bids for the company, we worked with the seller in analyzing all aspects of each proposal, including assessing the strength of the bidder in terms of successfully completing the regulatory process
Result: The client agreed to an exclusivity period with one bidder who subsequently executed a purchase agreement. The parties closed on the transaction with M&A’s client receiving a 2x multiple based on other comparables which had previously sold.