The SEAL team behind strategic SaaS growth
Case Study
The Company
The SaaS Company provides end-to-end quoting, sales automation, and data integration solutions for a vertical parts industry. Their platform simplifies and increases productivity for employees along the supply chain by streamlining quoting, sales order intake, and customer and supplier integration. The platform is used by global manufacturers and distribution companies to order and track large volumes of electronic parts from origination to destination.
The Challenge
The Company approached AcumenX to conduct a strategic assessment and advise them on accelerating growth through capital raising to expand their business development function, advance product development, and pursue inorganic growth through acquisition.
The Process
After extensive conversations with senior management, AcumenX, along with its investment banking affiliation with Seabrook Partners LLC, was engaged to support the Company in becoming investor-grade ready from a financial, operational, and legal standpoint, raise capital, and pursue potential acquisitions.
The AcumenX-led team worked directly with senior management to concurrently complete in-depth financial, operational, and legal due diligence reviews of the Company and several potential acquisition targets. With input from senior management, Seabrook developed a Confidential Information Memorandum (CIM) and marketed the opportunity to middle-market growth funds having portfolios and strategies synergistically aligned with the business. Also, during this period, the AcumenX-led team met with senior management of two different strategic acquisition targets.
High-level due diligence was performed on both targets, which resulted in a determination that, if timed and structured properly after an initial capital raise, the acquisitions would be accretive and value additive to the growth plan.
AcumenX provided comprehensive advisory services to support the client’s capital raise by preparing the company to meet the expectations of sophisticated investors. This included:
Preparing accrual-based financial statements and footnotes.
Restructuring the company’s outstanding equity option plan to align with prevailing market standards and governance practices favored by the investment community, thereby enhancing transparency and investor confidence.
Coordinating and administering a 409A valuation to establish an independent and defensible fair market value (FMV) for the company’s equity, ensuring regulatory compliance and reinforcing credibility with prospective investors.
Conducting a comprehensive defensive review of the company’s Section 1202 Qualified Small Business Stock (QSBS) position, evaluating eligibility criteria, historical capitalization, and operational compliance to substantiate and preserve the potential tax advantages associated with qualified small business stock for both existing and prospective investors.
Organized and managed a secure virtual data room (VDR) to facilitate efficient due diligence, and developed a detailed CIM that clearly articulated the company’s strategy, financial performance, and growth opportunity.
Collectively, these services positioned the company for a more efficient fundraising process and improved its ability to attract and engage qualified investment partners.
The Capital Raise
Seabrook organized management meetings with numerous investment funds, with the Company ultimately selecting a middle-market fund. Seabrook and AcumenX were instrumental in helping the Company navigate the selection process by sharing their experience and knowledge of deal structure, terms, and investor requirements. That selection was also driven by a future funding commitment for target acquisitions and the capacity to augment management’s capabilities. When the transaction shifted to the definitive agreements phase, AcumenX acted as the client’s legal team in an accelerated process on a compressed timeline for the public announcement of the investment at an annual industry event hosted by the Company.
The Value Added
The Company needed the capabilities, experience, and resources that it did not have internally to be able to successfully raise capital from the kind of investor it partnered with in the transaction. Teaming up with AcumenX and its investment banking affiliate provided the Company with approximately 8 months of the capabilities necessary to achieve a successful outcome, positioning the Company for accelerated growth. The breadth and depth of experience of AcumenX’s co-founders and affiliates in identifying and executing on an appropriate strategy to meet the goals of management teams and their stakeholders was instrumental to the success of the transaction.
