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Cre8tive Technology & Design Case Study
Minority Recapitalization & Acquisition: Cre8tive Technology & Design

Transaction Description:

Minority Recap of a North American Leader in Aerospace ERP Systems Integration

Case Study

The Challenge

  • $20+ MM Revenue company with strong focus on Aerospace & Defense
  • Understandbly the Company was growing ARR and had modest EBITDA
  • Seeking acquisition financing to acquire an adjacent company to expand delivery resources, acquire new clients, and expand market presence
The Solution
  • Market Valuations had tanked for tech-enabled services companies. Merit pulled the company off the market and looked for a structured debt/equity company to fill the gap with valuations being so low.
  • The Company didn’t have sufficient EBITDA to accomplish the objectives without a component of equity. Merit worked with the company to recast financials with the appropriate add-backs and operating structure to meet the bank requirements.
  • The company didn’t have a long history of positive EBITDA. Merit dove deep into the financials and produced recast numbers that under an accrual model, showed the historical investments in R&D that were able to prove that the add-backs were sufficient to boost EBITDA to a level that the bank could get comfortable with financing.
  • The acquisition target had walked away from the transaction due to lack of financing. Merit was able to prove that the process had credibility and gave the seller confidence that the deal could/would get done with Merit leading the process.
The Results
  • Merit found a structured debt & equity shop through it’s network
  • Merit was able to convince the seller to come back to the process
  • Merit was able to negotiate deal terms that were different than prior attempts that were satisfactory to both parties
  • Multiple times in the process, Merit used it’s negotiating and communications skills to keep the deal from falling apart.
  • The buyer received funding from the PE firm that allowed owners to take chips off the table while also giving them sufficient capital to acquire the target and operating runway to run the business without the fear of running out of cash.

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Jeff Rubenstein

"The team at Merit Investment Bank works hard and puts in a lot of time and energy. And because of that, they're talking to people with a lot more sincerity than just putting out a deck. They went deeper and not only understood our strategy, but they understood how to pitch the right strategy to the folks on the other end of the transaction. They explained our business so a potential suitor understood how it could be integrated into their business.

Merit Investment Bank thought of a more strategic transaction and they built a better story. It's what's created more offers and what made the offers higher."

CEO, SmartProcure

Tom Fleck

"Merit Investment Bank not only did everything they promised, they provided significant strategic guidance required to help us navigate the path of getting this transaction across the finish line. Their patience, tenacity, and professionalism when things got tough was the difference in completing this transaction for us."

CEO, GlobalTech

Chris Noorda

“I greatly appreciated Merit Investment Bank’s expertise and guidance throughout this process and appreciated, even more, their attention to the intangible things that were important to me and my company beyond just getting a deal done.”

President, Noorda BEC

Marco Allegretti

“I enjoyed working with Merit Investment Bank—they made an enormous contribution in such a complex but successful transaction. I would be happy for the chance to give a reference in the future for what a great job they did!”

Private Equity / M&A Executive, Atlantia; SpA Managing Director, McKinsey & Co

Bill Adams

"I wanted to work with an Investment Banking firm that was going to be able to understand our business, get to know me and my team, and then not only help us secure the investor, but help us find the right investor because they understood what we really needed. We got that and more with Merit Investment Bank. Their strategic guidance, patience, and diligence were critical in getting this transaction finished, and was the difference maker in this process.”

CEO and Cofounder, Conscious Leadership

Howard Perea

"We are thrilled with the outcome Merit Investment Bank delivered for our family through the sale of the business. With their guidance, we were able to unlock significant shareholder liquidity while positioning the employees of the company for continued success within a growing platform.”

Co-Owner, RAC Transport Inc.

D. Roberts

"We hired Merit Investment Bank over other investment bankers because of the responsiveness to our questions, aggressive approach to winning, persistence in following-up, and the many creative ideas the team presented. Merit Investment Bank added significant value beyond just running a process."

EVP, Project Yellowstone

Dave Carr

"Unlike many investment banks I've worked with during my career, Merit Investment Bank was attentive at all stages of our transaction, which really made a difference in achieving a great outcome."

CPA, Interim CFO

Mike Olson

“Through the broad auction, Merit Investment Bank got us another 75% above the offers that originally came in. We still have a piece of the company and I’m still able to run it. I feel good that our key employees are going to be secure in the future. It’s a win-win for everybody.”

Keith Jackson

"The team at Merit Investment Bank have provided invaluable assistance in stabilizing and growing my company. They’ve helped with both short-term challenges and long-term planning. Their experience running multiple businesses like mine and vast network of contacts have brought value to my company and to me personally. If you want help taking your business to the next level, I highly recommend Merit Investment Bank."

Owner of Industrial Revolution, Inc.

Carl Peterson

"As a business/transactional attorney, I have had the opportunity to work with many investment bankers in the M&A arena. The Merit Investment Bank team is, without question, the best in the local middle-market space. They make clients feel comfortable by both listening to and provide thoughtful advice for legal counsel. Most importantly, they are able to negotiate a great deal.

Quite refreshingly, Merit Investment Bank puts the needs of the client above closing a deal – something very rare in the M&A world. I give my highest possible recommendation to the Merit Investment Bank team."

Managing Partner, Eisenhower Carlson PLLC

Gary Goeldner

"The Merit Investment Bank team has provided my company with professionalism and valuable counsel on multiple transactions. They listened to our needs, and as business operators themselves, they understood the opportunities open to us and the challenges we faced to grow. They fought hard for us at every stage. We would absolutely look to them for our future investment banking needs."

CFO, Apex Linen Service LLC

Walt Maas,

“The Merit Investment Bank team has extensive M&A and capital-raising experience in the middle market, both as investment bankers and entrepreneurs. They are great to have on an engagement team and are committed to helping clients succeed, whether buying or selling a business or sourcing capital to scale a growing business.”

Attorney & Partner, Karr Tuttle Campbelle
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