Acquiring An Operating Business

Background

There are many sources of funding available to buy a company whether from lenders, public and private equity investors or strategic partners. Typically to secure capital for an acquisition, the target company is generally identified and often contractually bound to proceed with the transaction. But that is not always the case, as in this instance, where purchase funding was secured well in advance of identifying the business to be acquired.

Situation

The Client wanted to acquire an operating business in the media and entertainment sector and was seeking financing to do so. It sought to take advantage of the resurgence in the public markets of so-called SPAC’s, or special purpose acquisition companies, that raised money from the public in anticipation of a future acquisition that had yet to be identified or even considered.

Solution

The ELI Partner set the strategy, recruited an experienced board of directors and cfo and retained investment bankers, legal, accounting and financial communication professionals, undertook investor “road show” presentations and secured the funding in a “blank check” public vehicle raising $18million in proceeds as its Chairman and CEO.

Results

The ELI Partner led the buy side effort. He pursued discussions with dozens of companies in the U.S. and overseas, in the effort to acquire an operating business During an eighteen month timeframe, he identified, managed the diligence, and then acquired a target company; two years later supervised the sale of the business, including an Hispanic children’s television network and an uplink and production facility.