Thus far in my professional career the most challenge accomplishment was the events leading up to closing my first M&A transaction as lead investment banker, a $25 million enterprise value recapitalization. From the outset, our client had an ambitious vision to acquire three businesses simultaneously and ultimately work toward consolidating the highly fragmented custom apparel market. As part of this transaction, we identified three custom apparel businesses that were experts in their market verticals, negotiated the purchase terms, and started the due-diligence for each business.
With preliminary diligence complete, we created the combined enterprise transaction and financial model, as well as a 100-page confidential information memorandum, or pitch book, that outlined the targets, market, opportunity, and transaction.
The challenge intensified after several rounds of conversations with multiple private equity investors, nearly all of whom voiced strong concerns over the difficulty of integrating three businesses. After six in-depth discussion and over 25 high level calls from among 103 potential investors, all of whom passed, we knew we had to go back to the drawing board.
Our client decided to focus on acquiring one business standalone rather than three. They selected the most exciting target, but also the riskiest due to high customer concentrations and a large spike in growth the previous year. On the other hand, this business was also doing something unique in the industry, with premium profit margins in a generally low margin industry. After another round of discussions with still more investors, we ended up completing the recap with a mezzanine lender, a national bank, and two private equity firms working together to close the deal. A major undertaking given my experience, but one that resulted in achieving the clients goals and successfully closing the transaction.
Although the transaction was incredibly complex, the single greatest challenge I faced was losing my mentor and the firm’s managing partner after an all to brief fight with cancer early in the transaction. David Goldblum gave me my first chance in the competitive investment banking industry as well as the lessons that empowered me close the last deal he started. His passing took the floor out from under me emotionally and professionally, and left closing a deal without his guidance the most challenge experience of my life.