Buy-side Advisory - LBO of Edutainment Chain
Suggested Case Studies
Website created by BrandedbyAaliya
© 2023 Ideal Capital Management Consultants LLC.
All rights reserved.
Check out a back issue of our newsletter here.
Contact Us
Client
An alternative investments specialist group owned by GCC investors
Assignment
Approach
Business Benefits
IdealCap was mandated to assist in acquiring a majority stake in this profitable UAE-based retail edutainment chain. The Seller was a publicly listed company. The catch here was that our Client needed leverage for the acquisition while local banks typically shy away from funding acquisitions where the target's shares are the only collateral offered. The few that get funded take very long to get approved, by which time the deal is no longer available. Our challenge was to find a way to accommodate the loan approval delays and yet secure the deal vis-a-vis the Seller.
We managed to negotiate a payment plan with the Seller wherein the Client's equity portion of the purchase consideration would be payable in monthly instalments over three calendar quarters, by which time the loan would get approved and be drawn down. The acquisition transaction process per se went on without a major hitch — the information gathering, structuring, term sheet negotiations, FDD, LDD, the SPA and SHA negotiations, fulfilment of CPs. This was mainly because the target had reasonably good governance, being a subsidiary of a publicly listed entity and because the minority shareholder would continue operating the business. We closed both transactions - the leverage as well as the acquisition — before the expiry of the payment plan and to the satisfaction of all parties, viz., our Client, the Seller and the Bank.
Our Client was able to achieve closure on a transaction considered highly unlikely by the Seller and their advisors.