At Allegiance Capital we pride ourselves on achieving a premium price for our clients’ companies. Here’s an example:
An oil field services company making $5.5 million typically would sell for five times earnings in the U.S. market ($27.5 million). By taking it to select acquirers in the U.S., Allegiance Capital received an offer of $40 million. However, we didn’t stop our search for the ideal acquirer at the U.S. border.
We found a Western European acquirer who could leverage the technological advances our client had developed. The acquirer could take the technology our client was using in Texas oil fields and implement it in other markets such as Libya, UAE and the Ploesti oil fields in Romania. The buyer was perfectly positioned to create tremendous value by acquiring our seller’s company.
We sold the company for $60 million cash with a $30 million earn out, plus a 6% royalty on the patent for seven years.