Capstone Partners recently provided M&A advisory services to the owners of a large catalytic converter recycling operation based in the United States (the company) in a successful sale to the US-based subsidiary of a multinational urban miner and recycler (the buyer). Capstone’s Financial Advisory Services (FAS) group supported the company during the sale process with financial advisory and interim management services.
Originally referred in by the Capstone investment banking team representing the company owners in the transaction, Capstone’s FAS team helped the company respond to the buyer’s rigorous financial due diligence process and worked in an interim management capacity to help ensure a smooth transition to the buyer’s new management team.
“When we were engaged, we discovered a lot of conditions that are fairly typical for middle-market businesses that have grown organically over time and whose accounting functions have not necessarily kept pace with the increasing complexity and size of the organization,” said Senior Director Bruce Goldstein, the Capstone professional who served as Interim CFO. “We were able to align ourselves as an intermediary to help the company’s financial professionals better understand the substance of the buyer’s due diligence questions and respond to them with greater speed and accuracy to keep the deal moving forward.”
“While no assignment is ‘commonplace,’ the circumstances in this transaction are not unusual, especially in the middle market,” said FAS Practice Leader Jim Calandra, who also headed up the engagement team. “Otherwise good opportunities for both the buyer and the seller can easily be derailed when the due diligence process gets bogged down trying to extract an incredible amount of financial data from legacy accounting practices that were sufficient to run the business but not optimized to assist in the sale of the business. Our team helps our investment banking colleagues and our clients resolve these types of challenges expeditiously to prevent them from adversely impacting enterprise value or result in the loss of the opportunity altogether.”
While Capstone’s FAS team often collaborates with the firm’s investment banking practice to support their clients within the context of an M&A or capital raising mandate, we also work directly with businesses and their stakeholders on a variety of engagement types ranging from transaction advisory services, performance improvement and management consulting, restructuring and turnaround projects, special situations investment banking, and insolvency services.