Client Case Example #3
Profile
Privately held energy services business owned by a small private equity firm and the management team.
Situation
The owners decided to create a larger platform for growth in the always robust energy services sector. The current company was stable and generating respectable revenue but with little year-over-year growth. The private equity investor was anxious to exit the company and felt the best approach was to grow the business through acquisitions and embark on a more rapid pace of growth thereby enhancing appeal to other investors. The team identified potential targets and went about the process of securing the needed capital. The company had an adequate financial staff but was more focused on compliance as compared to growth. The management team felt the current financial infrastructure wasn’t investor ready.
Actions Taken
The management team contacted one of our CFOs to raise their financial bar and add the needed experience and oversight to the existing back-office infrastructure to execute a successful capital campaign. Our CFO immediately became an integral member of the team adding value through enhanced financial reporting, internal controls, forecasting and general financial counsel and leadership. He represented the financial equation of the company to potential debt and equity investors throughout the process of raising the needed growth capital.
Results
Since these actions have been taken, the company has been successful in raising a senior debt facility, a mezzanine debt facility and additional equity. The proceeds of these facilities have been used to acquire three separate operating companies increasing the current company’s revenue by nearly 200% and creating a much more viable platform for growth. The original private equity investor is still involved and now plans to stay fully invested for the foreseeable future.