Conscious Leadership Achieves Outlier Outcome and Minority Recapitalization Partnership Deal Case Study

The Challenge

Conscious Leadership is a premier provider of global leadership services, development, assessments, and certifications. The company saw a history of steady growth, operating across multiple continents, and successfully serving some of the leading domestic and global organizations. But even with much success, they needed more resources to support future growth and plans for technology expansion.

“The company was a leader in the industry, but they needed to catch up with the market around digital innovation,” says Nick DeVaney, president of Merit Investment Bank. “A minority partner was needed, and one that would not just open their checkbook but really add value to the business.”

After a referral to Merit Investment Bank and a few meetings, Conscious Leadership was certain the investment banking firm was the right choice. “We knew our business would attract and acquire a capital partner,” says Bill Adams, CEO and co-founder of Conscious Leadership. “But we wanted an investment banker that understood our business, got to know us, and would not only attract an investor but attract the right investor.”

The Solution

Merit Investment Bank got to know the company and understand its goals so that they could create a strategy. “First off, we suggested they get a minority partner to support future growth,” says DeVaney. “We said, ‘Let’s clean up your capitalization table, get you more cash to support growth, and then take some things off your plate so that you can refocus your energy.’”

Once the client was on board, Merit Investment Bank already had the perfect partner in mind. “We also knew the other group well, and it was a dead fit,” says DeVaney.

The potential match, RF Investment Partners, had extensive experience in the industry, so DeVaney made the introduction, teed up the deal, and immediately jumped into the due diligence process. “We had a letter of intent and term sheet in less than two months,” says DeVaney.

Part of the value that Merit Investment Bank brought to the table was helping the client get good at telling its story to secure a better deal. “It’s absolutely critical to have the narrative, the story, down in a way that compellingly and accurately represents where you’re at and what’s possible,” says Adams. “With Merit Investment Bank’s help, we could tell you with accuracy about how we’re going to perform over the next 90 days, what it looks like in the next 12 months and what our future looks like.”

Merit Investment Bank also prepared metrics that showed the company’s income was a recurring revenue business without having recurring revenue contracts. “We broke the financials down to show the historical value of customers and that made a huge difference in the valuation,” says DeVaney.

The Results

Merit Investment Bank secured a much better result than originally anticipated. “They got a double-digit multiple from a valuation perspective,” says DeVaney. “And one of the things we did to prove that value early on is show what the next exit would look like.”

The client had multiple exit opportunities during this process, and for various reasons, Merit Investment Bank advised against those opportunities.

“It was never just about getting the transaction done. It was about getting the right transaction,” says Adams. “And quite honestly, everything that we achieved during this transaction and the work that Nick and Merit Investment Bank did was literally worth every dollar we paid in fees and more.”