bridging-valuation-gap-gets-business-acquisition-back-track

Bridging the Valuation Gap gets the Business Acquisition Back on Track

The Vant Group represented the buyer in a Defense Contractor business acquisition. The company recently secured a large

The Vant Group represented the buyer in a Defense Contractor business acquisition.

The company recently secured a large new contract making it a perfect fit for the buyer. The seller accepted a purchase offer of $4.1MM.

Because the company financials did not reflect the revenue from the newly acquired contract, the bank returned a loan amount that was lower than the purchase price.  The original offer was fair, and the seller needed that price to dispose of their debt and fund their retirement.  Unfortunately, the buyer could not increase the down payment to fill the gap, so it looked like the deal was dead.

With 19 years and over 500 transactions, TVG had the experience to keep the deal alive. TVG structured a three-year term Consulting Agreement which provided payment to the seller for the difference of the sale price and the bank loan. In addition, the sellers were to share in any upside resulting from the new contract they secured before the sale.

 

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