Mergers and Acquisitions Case Study

A small niche software company needed to expand and revitalize its business.

Problem:

The CEO and Board of Directors believed that expansion could be better accomplished through acquiring a company rather than using its limited cash to expand its operations. The corporate structure of this small public company was problematic and suitable acquisition candidates were hard to locate.

Microcap Advisors Involvement:

Microcap Advisors was referred by one of the Board of Directors. The Company was analyzed, reviewed, and a plan was presented to the CEO and the Board of Directors. The strategy was conditionally approved by the Board of Directors based on negotiations with several major shareholders, stakeholders and investors

Microcap Advisors Solution:

The strategic plan was in three stages; corporate restructuring to allow acquisition through stock, research into finding the right acquisition company, negotiation, and structure of the acquisition. Microcap Advisors handled all three processes, including due diligence, while reporting directly to the Board of Directors. With defined milestones and objectives, Microcap Advisors organized the players including attorneys, auditors, and the Company's CEO and CFO to meet the Company's goals.

Results:

In the course of six months the Company completed its corporate restructuring, reviewed six acquisition candidates and finally selecting one, Microcap Advisors negotiated favorable terms (all based on a stock swap), and helped smoothly integrate the acquisition. A new revenue stream and an expanded technology base increased the awareness and reputation of the Company in the public market.