Case Studies
HSA has partnered with dozens of businesses to grow & prepare for a successful sale.
Case Studies
HSA has partnered with thousands of businesses to grow & prepare for a successful sale.
Featured Case Studies
Hospital System Corporate Finance Project
Situation
A well-known Los Angeles hospital system aimed to improve efficiencies and reduce costs for its patients in keeping with its mission to deliver world-class, safe patient care with excellent outcomes. This aligned with ongoing payor and Medicare changes to reimbursement policies. With these changes in mind, the client anticipated a significant increase in outpatient procedures at an ambulatory surgical center (“ASC”), which was a significant investor in the ASC.
The projected demand exceeded the ASC’s current capacity, presenting both a challenge and an opportunity for growth. To accommodate increased patient volume and procedural complexity, the ASC proposed expanding its operations by adding a new floor at its existing location.
This expansion would include state-of-the-art operating rooms, patient waiting areas, nursing stations, and supporting infrastructure. The ASC planned to fund this through a combination of debt and equity financing.
Solution
To support this expansion, the principals at HSA were asked to help create a three-statement (P&L, balance sheet, and cash flow) forecast to help the ASC understand its future revenue, expenses, risks, opportunities, and financing strategy.
To further support the capital-raising process, HSA’s principals considered a variety of financing alternatives for the construction project and created a comprehensive investor and lender presentation. We considered a variety of financing alternatives, including the initial proposed structure and alternative structures that didn’t require securing additional funds from the Client’s member physicians or its majority owner.
We worked closely with management to identify additional operational issues that could impact financing. This proactive approach ensured the ASC was fully prepared for lender discussions. Additionally, we leveraged existing relationships with ASC’s preferred lender to facilitate negotiations and ultimately secure favorable financing terms.
Results
HSA’s principal’s comprehensive support led to significant positive outcomes for ASC:
Favorable Financing
The ASC secured a fully debt-financed deal, avoiding the need to dilute ownership or solicit additional funds from physician members or its majority owner.
Increased Operational Capacity
The financial support paved the way for constructing the planned expansion to ensure ASC could effectively manage the anticipated increase in patient volume.
By identifying and addressing key issues, the ASC ensured it could secure favorable terms for expansion, enhance its operational capacity, and pave the way for continued success.
Healthcare Technology Sale Prep Project
Situation
A healthcare technology company that leverages AI for clinical trials sought HSA principals’ guidance among two prospective offers and an evolving industry landscape.
Solution
After we helped the client’s owners evaluate the offers on the table, the client decided to shop the business more broadly. Given that conclusion, HSA’s principals advised the owners on the selection of an investment banking firm.
We acted as a sounding board throughout the merger process by providing continuous support to help with navigating a complex transaction and ensuring a smooth transition.
Results
After a thorough search, a merger of entities took place with a leading independent contract research organization dedicated to imaging in clinical trials.
Family-Owned Business Sale Prep Project
Situation
Our client approached us with an interest in putting the company up for sale at the earliest opportunity. The owners, a husband-and-wife team, had grown the business to a point where outside capital was going to be required to continue its accelerated growth path.
Solution
The forecast model that HSA’s principals prepared showed that increased spending on its traditional online sources of ecommerce advertising (Facebook, Instagram, etc.) could yield outsized increases in sales and margin.
Given its size and capitalization, the Company’s ability to increase spend substantially was limited because of the related requirement for increased inventory, which required several months’ lead time at its overseas manufacturing partners. To move forward, the Company needed working capital to fuel growth, and we introduced it to a bank that provided the necessary funds in advance of the transaction.
After completing the modeling process, we provided insights on which investment banking firms would be the best fit. In January 2020, the Client went to several of the recommended investment banking firms to discuss going to market.
While it took several months during the middle of COVID-19 shutdowns, we ran a two-step process to help the Company select the firm to advise on the sale and negotiated the engagement agreement with the selected firm.
The Company also required a team with a strong understanding of ecommerce businesses to assist in securing a smooth transaction. HSA’s principals identified an M&A transactional attorney, the owners’ tax and estate planning counsel, and a high-quality accounting firm to provide a Quality of Earnings report to support the sale.
Results
During our initial conversations with the owners in late 2019, they expressed confidence that they would be satisfied with an enterprise value reflecting the business at the time.
In part because we identified growth opportunities through increased advertising and the owners’ strong execution during the Covid-related shutdowns in 2020, the transaction closed with a very high-quality financial buyer at an enterprise value at least twice their original expectations. This included a rollover equity position that the founders retained at closing, which signaled confidence in their continued commitment to the investment to the buyer.
Public Relations Company Sales Prep Project
Situation
Our client was referred to us to explore a sale of a public relations company. The owners had gone to market several years earlier and had a failed transaction process. They were unsure as to the salability of the company at all, let alone at a value that met their financial goals.
Solution
While our intuition and experience told us that the company was salable and at an attractive valuation, we first did a market check to determine whether that belief was correct. Once having concluded the accuracy of our initial conclusions, we worked with the client to develop a growth story and financial forecast that reflected the plan and educated his team on how a transaction would impact them and their roles in the company.
We ran a process to identify the best fit investment banking firm to advise the company on the transaction process and assisted in negotiating the fee arrangements with the banker. We also provided advice to the owner during the entire banking process.
Results
The client sold a significant majority in the company to a private equity firm that believed in the opportunity to “roll up” the fragmented industry in which it participated. They received a valuation well in excess of what they hoped to achieve when we met them.
With the new owner, several companies have been added to the original company, significant synergies have been realized, and the company is positioned for accelerated growth and a higher exit multiple when the financial buyer offers the business for sale to a new owner.
Entertainment Industry Equipment Leasing Company – Corporate Finance Project
Situation
The Company, a leading entertainment industry equipment leasing company approached us in the fall 2018 with an interest in obtaining financing to take it through its recent growth period.
Solution
We recommended that our client consider a private placement of nearly $50 million of debt.
Based on our knowledge of the marketplace, there was significant private capital (e.g., non-bank) available for borrowing. Given the soundness of the business and its growth and profitability, we believed the Company would be well served by exploring this market.
The principals at HSA identified and reached out to investment bankers that would be effective in a private placement of the loan. The Company engaged one of them to implement the plan.
Results
Ultimately, when faced with the potential loss of an excellent customer and credit, the incumbent lender submitted a proposal to refinance the existing loan lines of the Company that:
- Offered significantly more credit availability
- Presented a better interest rate and better covenants
- Eliminated the requirement for a personal guarantee from the owner.
The transaction closed less than three weeks after the investment banker was engaged.
Workers’ Comp Claims Administration Business Sale Prep Project
Situation
The Company, a financial services firm in the workers’ comp claims administration business, approached the principals at HSA to improve the business’s growth prospects.
Upon becoming engaged and seeing that the Company was losing money due to issues with one of its business units, we noted that, without significant changes, the Company would be bankrupt within six months (and its generally retired ESOP shareholders would lose their income).
Solution
We assembled Company management and the Chairman of the Board and developed a plan to conserve cash long enough to shut down the losing business unit and engage an agent to put the rest of the company up for sale.
As we began work, it became clear that there was an existential financial threat to the company’s ability to continue as a going concern due to continued losses. We shifted our services to advising on triaging cash flow losses and engaging an investment banker to put the successful business unit up for sale.
Results
Although the transaction was very challenging and took time to close, the Company was sold to a third party.
Workers’ Comp Claims Administration Business Sale Prep Project
Situation
The Company, a financial services firm in the workers’ comp claims administration business, approached the principals at HSA to improve the business’s growth prospects.
Upon becoming engaged and seeing that the Company was losing money due to issues with one of its business units, we noted that, without significant changes, the Company would be bankrupt within six months (and its generally retired ESOP shareholders would lose their income).
Solution
We assembled Company management and the Chairman of the Board and developed a plan to conserve cash long enough to shut down the losing business unit and engage an agent to put the rest of the company up for sale.
As we began work, it became clear that there was an existential financial threat to the company’s ability to continue as a going concern due to continued losses. We shifted our services to advising on triaging cash flow losses and engaging an investment banker to put the successful business unit up for sale.
Results
Although the transaction was very challenging and took time to close, the Company was sold to a third party.
Entertainment Industry Equipment Leasing Company – Corporate Finance Project
Situation
The Company, a leading entertainment industry equipment leasing company approached us in the fall 2018 with an interest in obtaining financing to take it through its recent growth period.
Solution
We recommended that our client consider a private placement of nearly $50 million of debt.
Based on our knowledge of the marketplace, there was significant private capital (e.g., non-bank) available for borrowing. Given the soundness of the business and its growth and profitability, we believed the Company would be well served by exploring this market.
The principals at HSA identified and reached out to investment bankers that would be effective in a private placement of the loan. The Company engaged one of them to implement the plan.
Results
Ultimately, when faced with the potential loss of an excellent customer and credit, the incumbent lender submitted a proposal to refinance the existing loan lines of the Company that:
- Offered significantly more credit availability
- Presented a better interest rate and better covenants
- Eliminated the requirement for a personal guarantee from the owner.
The transaction closed less than three weeks after the investment banker was engaged.
Public Relations Company Sales Prep Project
Situation
Our client was referred to us to explore a sale of a public relations company. The owners had gone to market several years earlier and had a failed transaction process. They were unsure as to the salability of the company at all, let alone at a value that met their financial goals.
Solution
While our intuition and experience told us that the company was salable and at an attractive valuation, we first did a market check to determine whether that belief was correct. Once having concluded the accuracy of our initial conclusions, we worked with the client to develop a growth story and financial forecast that reflected the plan and educated his team on how a transaction would impact them and their roles in the company.
We ran a process to identify the best fit investment banking firm to advise the company on the transaction process and assisted in negotiating the fee arrangements with the banker. We also provided advice to the owner during the entire banking process.
Results
The client sold a significant majority in the company to a private equity firm that believed in the opportunity to “roll up” the fragmented industry in which it participated. They received a valuation well in excess of what they hoped to achieve when we met them.
With the new owner, several companies have been added to the original company, significant synergies have been realized, and the company is positioned for accelerated growth and a higher exit multiple when the financial buyer offers the business for sale to a new owner.
Family-Owned Business Sale Prep Project
Situation
Our client approached us with an interest in putting the company up for sale at the earliest opportunity. The owners, a husband-and-wife team, had grown the business to a point where outside capital was going to be required to continue its accelerated growth path.
Solution
The forecast model that HSA’s principals prepared showed that increased spending on its traditional online sources of ecommerce advertising (Facebook, Instagram, etc.) could yield outsized increases in sales and margin.
Given its size and capitalization, the Company’s ability to increase spend substantially was limited because of the related requirement for increased inventory, which required several months’ lead time at its overseas manufacturing partners. To move forward, the Company needed working capital to fuel growth, and we introduced it to a bank that provided the necessary funds in advance of the transaction.
After completing the modeling process, we provided insights on which investment banking firms would be the best fit. In January 2020, the Client went to several of the recommended investment banking firms to discuss going to market.
While it took several months during the middle of COVID-19 shutdowns, we ran a two-step process to help the Company select the firm to advise on the sale and negotiated the engagement agreement with the selected firm.
The Company also required a team with a strong understanding of ecommerce businesses to assist in securing a smooth transaction. HSA’s principals identified an M&A transactional attorney, the owners’ tax and estate planning counsel, and a high-quality accounting firm to provide a Quality of Earnings report to support the sale.
Results
During our initial conversations with the owners in late 2019, they expressed confidence that they would be satisfied with an enterprise value reflecting the business at the time.
In part because we identified growth opportunities through increased advertising and the owners’ strong execution during the Covid-related shutdowns in 2020, the transaction closed with a very high-quality financial buyer at an enterprise value at least twice their original expectations. This included a rollover equity position that the founders retained at closing, which signaled confidence in their continued commitment to the investment to the buyer.
Healthcare Technology Sale Prep Project
Situation
A healthcare technology company that leverages AI for clinical trials sought HSA principals’ guidance among two prospective offers and an evolving industry landscape.
Solution
After we helped the client’s owners evaluate the offers on the table, the client decided to shop the business more broadly. Given that conclusion, HSA’s principals advised the owners on the selection of an investment banking firm.
We acted as a sounding board throughout the merger process by providing continuous support to help with navigating a complex transaction and ensuring a smooth transition.
Results
After a thorough search, a merger of entities took place with a leading independent contract research organization dedicated to imaging in clinical trials.
Hospital System Corporate Finance Project
Situation
A well-known Los Angeles hospital system aimed to improve efficiencies and reduce costs for its patients in keeping with its mission to deliver world-class, safe patient care with excellent outcomes. This aligned with ongoing payor and Medicare changes to reimbursement policies. With these changes in mind, the client anticipated a significant increase in outpatient procedures at an ambulatory surgical center (“ASC”), which was a significant investor in the ASC.
The projected demand exceeded the ASC’s current capacity, presenting both a challenge and an opportunity for growth. To accommodate increased patient volume and procedural complexity, the ASC proposed expanding its operations by adding a new floor at its existing location.
This expansion would include state-of-the-art operating rooms, patient waiting areas, nursing stations, and supporting infrastructure. The ASC planned to fund this through a combination of debt and equity financing.
Solution
To support this expansion, the principals at HSA were asked to help create a three-statement (P&L, balance sheet, and cash flow) forecast to help the ASC understand its future revenue, expenses, risks, opportunities, and financing strategy.
To further support the capital-raising process, HSA’s principals considered a variety of financing alternatives for the construction project and created a comprehensive investor and lender presentation. We considered a variety of financing alternatives, including the initial proposed structure and alternative structures that didn’t require securing additional funds from the Client’s member physicians or its majority owner.
We worked closely with management to identify additional operational issues that could impact financing. This proactive approach ensured the ASC was fully prepared for lender discussions. Additionally, we leveraged existing relationships with ASC’s preferred lender to facilitate negotiations and ultimately secure favorable financing terms.
Results
HSA’s principal’s comprehensive support led to significant positive outcomes for ASC:
Favorable Financing
The ASC secured a fully debt-financed deal, avoiding the need to dilute ownership or solicit additional funds from physician members or its majority owner.
Increased Operational Capacity
The financial support paved the way for constructing the planned expansion to ensure ASC could effectively manage the anticipated increase in patient volume.
By identifying and addressing key issues, the ASC ensured it could secure favorable terms for expansion, enhance its operational capacity, and pave the way for continued success.