Situation

A major regional bank approached The Alta Group to request research identifying growth opportunities in the equipment leasing and finance industry. The bank had started a leasing division several years earlier, and the leader of the division had a long-standing relationship with Alta. Bank officials were interested in opportunities and alternatives for further development in that part of their business. Because the bank had available cash and its cost of funds would be competitive, bank officials felt the timing was right and that leasing was a good place to look for growth.

Solution

Alta provided an industry study and broad analysis of the market and recommended that expansion through acquisition would be an optimum growth alternative to consider. Alta also proposed to represent the bank in identifying potential acquisition prospects and advising with respect to qualified opportunities. While the M&A market was relatively soft at this time, Alta was aware of certain companies to recommend.

Paul Bent, one of Alta’s senior managing directors, who had an established relationship with a key bank executive, worked collaboratively with Bruce Kropschot, Alta’s M&A practice leader, to explore acquisition options for the bank; and other consultants within Alta provided their expertise in due diligence to evaluate a number of acquisition prospects that Alta had identified.

Once the bank decided to pursue an acquisition, Alta played a significant role in helping to establish the necessary communications and business relationship between the bank (Alta’s client) and the prospective acquisition target that the bank had found the most attractive. Alta then provided financial advisory and consulting services with respect to the transaction and assisted in all aspects of the acquisition itself. This was a transaction in which the nature of the leaders of both companies, being executives of long experience and high integrity, were found by one of the Alta consultants involved, to be instrumental in completing a deal that was viewed by both parties as a very positive experience.

Success

According to Alta’s consultants, this was a 100 percent cash transaction with strong multiples. The independent leasing company that was acquired had remained strong even through the great recession and was admired by many as a successful independent company. Similarly, the bank enjoys a very positive reputation based upon its successful history throughout its regional markets. The combining of two strong and successful companies, led by independent, successful, and highly respected executives, was the key to the success of this transaction.

The CEO of the bank complimented Alta for its attention to the needs of both parties. The leaders of both the bank and the acquired independent company were pleased with the arrangements and the speed with which the closing was accomplished.

The Alta Group’s M&A Practice is headed by Bruce Kropschot, a senior managing director.