Case Studies
Mining Communications
This business was a publishing company in the cyclical mining sector which had been in existence for over 170 years. It was an industry leader but not profitable. It was subject to a management buy in, supported by private equity.
The exit was planned form the beginning and the key strategies were:
- rebrand and freshen the key products, close loss makers with no future
- arrest the decline in revenue from the existing business, costs were cut, new processes introduced, and yield especially around subscriptions aggressively increased. An aggressive supplements strategy was also introduced
- leverage the community created by the publications into events, branded and operated separately. The brand was Mines and Money
- improve customer management systems to improve the value of each customer and its lifetime value
- added infill products to support and grow the main brands
The team identified its buyers early and courted them at conferences, visits to Toronto, Hong Kong, Perth and Vancouver and did a joint venture with its eventual buyer.
On the company’s sale investors got eight times money on their investment, management more. The price was 17 times EBITDA where the company had:
- set out for the buyer the benefits from the acquisition including the buyer synergies
- put in place the next phase of development, overseas expansion of Mines and Money
- painted the blue sky around acquisitions and data
- introduced a succession plan that survived the acquisition.
The exit was planned form the beginning and the key strategies were:
- rebrand and freshen the key products, close loss makers with no future
- arrest the decline in revenue from the existing business, costs were cut, new processes introduced, and yield especially around subscriptions aggressively increased. An aggressive supplements strategy was also introduced
- leverage the community created by the publications into events, branded and operated separately. The brand was Mines and Money
- improve customer management systems to improve the value of each customer and its lifetime value
- added infill products to support and grow the main brands
The team identified its buyers early and courted them at conferences, visits to Toronto, Hong Kong, Perth and Vancouver and did a joint venture with its eventual buyer.
On the company’s sale investors got eight times money on their investment, management more. The price was 17 times EBITDA where the company had:
- set out for the buyer the benefits from the acquisition including the buyer synergies
- put in place the next phase of development, overseas expansion of Mines and Money
- painted the blue sky around acquisitions and data
- introduced a succession plan that survived the acquisition.
Intierra RMG |
Intierra RMG was a data business that covered the performance of the mining industry from cradle to grave. It was a technological leader in its sector, not profitable but with a very capable management team, most with mining backgrounds. It was subject to a management buy in with private money.
The investor group identified with management that there was a huge opportunity in presenting data in a spatial context, much the way Google Maps was then beginning to do. Mining data which needs a location/ geographic context was ripe for spatial data and the team believed this would spread to other industries.
The exit was planned in five phases:
- the delivery of spatial data. This strategy clearly differentiated Intierra’s offering and accounted for new volume and yield growth
- the internationalisation of its offices and coverage
- the acquisition of competitive data sets and research capability
- the targeting of large information businesses as potential buyers through license agreements
- the integration of data in the workflow of key clients
Intierra RMG also targeted its nearest competitor’s greatest strength which was around exploration studies.
The company was eventually sold for around 35 times EBITDA to its nearest competitor which was itself acquired by a large information business. In the sale process, the seller:
- showed a clear product path for the business and new revenue streams
- the buyer synergies which aggregated to some $1.5 million and include the rationalisation of data collection and the salesforce
- a yield strategy for the business
The investor group identified with management that there was a huge opportunity in presenting data in a spatial context, much the way Google Maps was then beginning to do. Mining data which needs a location/ geographic context was ripe for spatial data and the team believed this would spread to other industries.
The exit was planned in five phases:
- the delivery of spatial data. This strategy clearly differentiated Intierra’s offering and accounted for new volume and yield growth
- the internationalisation of its offices and coverage
- the acquisition of competitive data sets and research capability
- the targeting of large information businesses as potential buyers through license agreements
- the integration of data in the workflow of key clients
Intierra RMG also targeted its nearest competitor’s greatest strength which was around exploration studies.
The company was eventually sold for around 35 times EBITDA to its nearest competitor which was itself acquired by a large information business. In the sale process, the seller:
- showed a clear product path for the business and new revenue streams
- the buyer synergies which aggregated to some $1.5 million and include the rationalisation of data collection and the salesforce
- a yield strategy for the business