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Representative Experience > Investment Banking

MEDCATH CORPORATION

Investment Banking

Company Description:

  • MedCath Corporation was a publicly-traded, national healthcare provider focusing on high-acuity services and specializing in the diagnosis and treatment of cardiovascular disease. MedCath owned and operated 10 hospitals in partnership with physicians with a total of approximately 825 licensed beds in Arizona, Arkansas, California, Louisiana, New Mexico, South Dakota, and Texas. It also owned and/or managed 16 cardiac diagnostic and therapeutic facilities.

Challenges Faced:

  • The passage of the Affordable Care Act in March 2010 included a prohibition on the development of any new physician-owned hospitals as well as a prohibition on the expansion of existing physician owned hospitals.
  • In addition, the accelerating trend of employment of cardiologists by integrated health systems was further limiting physician partnership opportunities.
  • As a result of these challenges to the MedCath business model, its Board of Directors elected to pursue a full range of strategic alternatives.

Solutions Provided by SOLIC Professionals:

  • SOLIC professionals were engaged by MedCath to act as financial advisor in connection with exploring a sale of the Company or its individual assets.
  • As financial advisor, SOLIC professionals were responsible for:
    • Development and execution of a disposition plan and strategy;
    • Positioning the hospitals for sale;
    • Oversighting performance improvement initiatives at individual hospitals;
    • Identification and solicitation of potential acquirers;
    • Development and implementation of appropriate communication strategies; and,
    • Structuring and negotiating the sale of its hospitals and cath labs.

Result Highlights:

  • After assisting in the proper positioning of the portfolio holdings, SOLIC professionals were responsible for:
    • The structuring, negotiation and highly successful execution of a series of 14 transactions.
    • Realized a doubling of market value over the course of 18 months.
    • Shareholder value appreciated from $7/share trading price to a distribution of realized proceeds in excess of $15/share.

HQ GLOBAL WORKPLACES

Restructuring, Investment Banking

Company Description:

  • HQ Global Workplaces was the leading provider of executive office space and associated services and was the largest franchisor of executive office suites in the world with revenues in excess of $400 million, senior debt of $244 million, sub-debt of $125 million and preferred equity of $220 million.

Challenges Faced:

  • The Company had grown quickly and in an undisciplined manner without adequate financial controls resulting a large number of unprofitable locations, duplicative corporate overhead and challenging client mix. The factors resulted in the Company seeking bankruptcy protection.

Solutions Provided by SOLIC Professionals:

  • Represented the senior creditors through a protracted bankruptcy proceeding.
  • Assessed the Company’s operating opportunities, including branch rationalizations and lease restructuring opportunities and worked in tandem with management to redesign the organizational structure into an entrepreneurial organization focused on P&L responsibility at the branch level.
  • Served as exclusive financial advisor for the sale of the Company.

Result Highlights:

  • Resulted in a successful reorganization in which the pre-petition senior lenders equitized their debt to take control of the Company.
  • Oversaw a full range of restructuring initiatives including: (i) sale of$20 million of non-core assets; (ii) rejection of 70+ unprofitable leases; (iii) restructuring of over 180 leases on substantially more favorable terms; and (iv) eliminating $30 million in annualized corporate overhead.
  • Recruited and selected new management team including CEO, COO, CFO, and EVP of Sales.
  • Post-bankruptcy, a SOLIC professional served as Executive Chairman of the Board, and provided oversight to the continuing operating restructuring that resulted in EBITDA improvements (from $2.4 million to $47 million run-rate).
  • Negotiated the sale of the Company to Regus LPC for $315 million resulting in significant returns to the stakeholders.

TENDER LOVING HEALTH CARE SERVICES, INC.

Restructuring, Investment Banking

Company Description:

  • Tender Loving Health Care Services, Inc. (“TLC”) was the largest privately held independent provider of home nursing and hospice services in the U.S. with 92 home health and 11 hospice agencies located in 22 states and the District of Columbia.

Challenges Faced:

  • Two months after TLC refinanced its existing credit facilities in connection with the acquisition of AccuMed and NorthWestern Memorial Home Health Care, TLC experienced (i) poor post acquisition integration, (ii) significant decline in revenues and breach of loan covenants, (iii) lack of urgency and accountability at all levels of management, (iv) bloated field care-giver cost structure, and (v) multiple underperforming and negative contribution margin branches.

Solutions Provided by SOLIC Professionals:

  • A SOLIC professional was appointed Executive Chairman in order to oversight the capital and operational restructuring.
  • Engaged as exclusive financial advisor to develop and implement value maximization strategies including a sale of the Company or its assets.
  • SOLIC professionals developed and implemented a performance improvement improving EBITDA by over $15 million annually and then orchestrated the sale of the company at significant premium to market multiples.

Result Highlights:

  • By leveraging the potential of a competitive auction process, SOLIC professionals were able to induce a premium pre-emptive bid from Amedisys (NASDAQ:AMED) for a cash price of $395 million. The transaction represented a premium valuation multiple in excess of 11.0x EBITDA.

RADICA GAMES LIMITED

Investment Banking

Company Description:

  • Radica Games Limited (“Radica”), a leading $165 million revenue pure-play developer, manufacturer and distributor of classic electronic entertainment products, had experienced a 24.4% CAGR in sales over the three-year period prior to its sale. Radica’s strong growth was a result of new product innovation, consistent revenue from classic offerings and diversified distribution channels. Radica expected this growth to continue due to the extension of its highly profitable Cube World and 20Q games and anticipation over the Girl Tech division’s Digi Makeover product.

Challenges Faced:

  • As a publicly-traded company, Radica’s Board of Directors was seeking to maximize shareholder value through a sale to a strategic buyer.

Solutions Provided by SOLIC Professionals:

  • As the exclusive sell-side advisor, SOLIC professionals positioned Radica as a company that could stimulate the growth of a large player in an otherwise stagnant toy market. To illustrate Radica’s value to a potential buyer, SOLIC professionals emphasized the Company’s unique position within the market:
    • Radica’s core brands were aligned with the best performing category subsets in the market, specifically electronic games.
    • Electronic games had grown at a CAGR of 26% since 2003 (versus the rest of the industry with a CAGR of -0.7%).
    • Proved that Radica was able to capitalize on this growth by establishing themselves as a market leader in the relatively new “casual game” market, consisting of consumers who enjoy playing video games, but take them far less seriously than users of PlayStation, Xbox or Nintendo.

Result Highlights:

  • Served as sell-side advisor in its sale to Mattel, Inc.
  • $232 million all cash transaction, with purchase price multiples of 1.2x Revenue, 15.0x EBITDA, and 18.5x EBIT

PASADENA TANK CORPORATION

Investment Banking

Company Description:

  • Pasadena Tank Corporation (“PTC”) is a closely-held, family-owned business and a leading provider of engineering, fabrication and construction, and repair and maintenance services for aboveground storage tanks (AST). The Company provides these services for customers that produce, process, store and distribute petrochemical products throughout the world.

Challenges Faced:

  • The family that controlled PTC was seeking a sale to provide liquidity and for estate planning purposes.

Solutions Provided by SOLIC Professionals:

  • SOLIC professionals were engaged as exclusive financial advisor and successfully structured, negotiated and closed this transaction.

Result Highlights:

  • The Company entered into a definitive agreement to merge with HMT Inc., a portfolio company of a private equity investor, which provides a suite of products and services to the AST industry through product sales, inspection, repair and maintenance, fabrication, engineering and design, coating and lining. The combination yielded a well-respected, full-service leading supplier to the petrochemical industry.

CONVERGENT RESOURCES INC.

Investment Banking

Company Description:

  • Convergent Resources Inc. (“CRI”) was a leading provider of outsourced Accounts Receivable Management (“ARM”) services with specialized expertise in consumer accounts in the utility, credit card, telecommunications and healthcare industries with over $100 million of annual revenues.

Challenges Faced:

  • CRI’s equity sponsors had facilitated the build-up of the Company over a seven-year period and were seeking liquidity for their investment.

Solutions Provided by SOLIC Professionals:

  • Retained to explore a sale or recapitalization of the Company on behalf of its private equity sponsors.

Result Highlights:

  • Orchestrated a competitive solicitation process resulting in a successful sale to Silver Oak Business Services Partners.

ALLEGIANCE HEALTH

Investment Banking, Mergers & Acquisition

Company Description:

  • Allegiance Health (“Allegiance”) is a 480-bed community-owned health system in Jackson, Michigan with a 270-physician clinically integrated network and over 40 ambulatory locations.

Challenges Faced:

  • Despite being a sole community provider and having received the Malcom Baldrige Award for Quality, Allegiance had experienced declining market share due to increased competition from statewide health systems and outmigration of both patients and medical staff to neighboring cities such as Ann Arbor and Lansing. In addition, declining reimbursement rates from both commercial and government payors had resulted in a significant decline in profitability. To maintain its existing infrastructure and breadth of quality services, Allegiance determined it needed to partner with a large regional or national system health system.

Solutions Provided by SOLIC Professionals:

  • Served as the exclusive financial advisor to the Board of Trustees to identify and prioritize strategic needs and objectives, and to develop and qualify a list of strategic partners to optimize achievement of these strategic goals.
  • Managed the strategic alternative execution process, orchestrating a confidential solicitation process, providing valuation and due diligence support, and advising the Allegiance Board on structuring and negotiating the terms of the ultimate transaction.

Result Highlights:

  • Allegiance affiliated with Henry Ford Health System (HFHS), a five-hospital system headquartered in Detroit, Michigan and recognized as one of the nation’s leading integrated health systems.
  • As part of the affiliation, Allegiance joined HFHS’ obligor group, receiving a credit rating upgrade, and a capital commitment to finance a new flagship hospital.
  • Allegiance also received access and staffing from HFHS network of specialists, one of the largest academic medical groups in the U.S.

MESA MEDICAL GROUP

Investment Banking

Company Description:

  • MESA Medical Group (“MESA” or “the Company”) had established itself as the largest provider of Emergency Department services in Kentucky with over 20 hospital contracts and 400 physicians. As part of its growth strategy, MESA had expanded its service offerings to include Hospitalist Medicine and its geographic footprint to include Ohio, Indiana and West Virginia. As a result of its services commitment, MESA has forged long-tenured relationships with leading regional not-for-profit health systems, as well as publicly-traded hospital management companies.

Challenges Faced:

  • The Company had grown rapidly with the support of its private equity partners and was seeking a sale or recapitalization to provide liquidity to its institutional holders.

Solutions Provided by SOLIC Professionals:

  • Engaged as financial advisor to evaluate potential strategic alternatives, identify prospective acquirers, develop and implement a competitive solicitation process, provide valuation support, and structure and negotiate the terms of the sale transaction, as well as all related physician agreements.

Result Highlights:

  • After discussions with several leading physician staffing operators, MESA agreed to be acquired by Team Health Holdings (NYSE:TMH), one of the largest providers of outsourced physician staffing solutions for hospitals in the U.S.

610 LEXINGTON IN NEW YORK

Investment Banking, Distressed Loan Sale

Company Description:

  • A large financial institution was the holder of three promissory notes with an aggregate principal amount of approximately $118 million which were secured by a senior interest in three mortgages in a sizable parcel of land in the City of New York in the Plaza District sub-market of mid-town Manhattan. The borrower acquired the site, razed the previous building and permitted the site for a 275,000 sf hotel and residential development before defaulting on the promissory notes.

Challenges Faced:

  • The Lender had pursued foreclosure proceedings on the collateral and initiated a sale of their Loan Rights. However, the foreclosure process was significantly delayed due to a lawsuit from the Borrower against the Lender. The neighboring site also held certain easement and zoning consent rights that created economic limitations and restrictions for the subject property.

Solutions Provided by SOLIC Professionals:

  • SOLIC advised the noteholders on options for maximizing recovery from the promissory notes. SOLIC provided financial and strategic advisory support including:
    • assessment of opportunities and risks related to outstanding credit agreement
    • conducting a detailed market analysis and valuation of the collateral in order to set valuation parameters
    • implementation of recovery initiatives including solicitation of competing bids for the promissory notes from developers, as well as direct negotiation with existing creditors, investors, and other stakeholder constituents

Result Highlights:

  • After identifying more than 50 interested buyers for the promissory notes and entering into discussions with 10 qualified buyers, the Borrower agreed to repurchase the notes at a valuation that was approximately 70% of principal value or over 2x the initial valuation proposed in pre-existing Lender arranged foreclosure sale bid, prior to SOLC’s retention.

TAYLOR BEAN & WHITAKER MORTGAGE CORPORATION

Restructuring, Investment Banking, Asset Management

Company Description:

  • Taylor Bean & Whitaker Mortgage Corporation (‘TBW”) was the nation’s largest independent residential mortgage originator, headquartered in Ocala, Florida. The Company serviced $80 billion of mortgage loans and originated approximately $40 billion annually of mortgage loans.

Challenges Faced:

  • TBW was terminated as an approved servicer by Freddie Mac and Ginnie Mae and over $2 billion of TBW’s funds were frozen at Colonial Bank in connection with its seizure by the FDIC. TBW also owned various insurance companies, title companies, commercial real estate holdings, as well as Platinum Community Bank that was seized by the FDIC.

Solutions Provided by SOLIC Professionals:

  • Served as Chief Restructuring Officer and provided support personnel in connection with the Company’s Chapter 11 bankruptcy filing.
  • Coordinated and directed the administration of the Company’s Chapter 11 case, including assistance with respect to the preparation of bankruptcy schedules, statements of financial affairs and plan of reorganization or liquidation relating to the Company.

Result Highlights:

  • Oversaw the orderly disposition of approximately 4,500 foreclosed homes.
  • Post-bankruptcy, continue to serve as Liquidating Trustee and Chief Financial Officer.
  • Pursued significant litigation recoveries in order to maximize return to stakeholders including filing two of the largest accounting malpractice claims in history, as well as hundreds of avoidance actions.
  • Managed the wind-down, sale and transfer of $10 billion plus of mortgage loans.
  • Negotiated the resolution of significant governmental investigations and litigation matters.

AMERICAN CADASTRE, LLC

Investment Banking, Distressed Sale

Company Description:

  • American Cadastre, LLC (“AMCAD”) is a developer of software that automates and streamlines state and local government document recording and filing processes with three primary software platforms: Justice (Courts), Land Records, and Managed Services.

Challenges Faced:

  • Shortly before SOLIC’s engagement, a notable private equity firm made a majority investment to drive growth in AMCAD’s Justice software platform. Due to unforeseen project delays and cost over-runs, the loss of a major client, and fraudulent billing practices, the Company’s financial profile quickly deteriorated, leaving insufficient liquidity to continue operating on a going-concern basis.

Solutions Provided by SOLIC Professionals:

  • Performed an Initial Review & Assessment of the Debtor and provide strategic alternatives that would prevent a Chapter 7 liquidation and maximize recovery on behalf of the Lender via a sum-of-the-parts valuation/sale approach.
  • Developed a list of qualified, potential purchasers of the Debtor’s assets and effectively market such assets until an asset purchase agreement is executed.
  • Developed a detailed 13-week cash forecast to project and monitor liquidity through the solicitation of the Debtor’s assets.
  • Served as financial advisor to the Debtor during Chapter 11 Bankruptcy process, assisting in: (i) the negotiation of bankruptcy related matters with outside constituents, including creditors and their advisors, and (ii) developing and negotiating the use of cash collateral and DIP financing.
  • Facilitated an auction and sale process of the Debtor’s remaining assets during the Chapter 11 Bankruptcy.

Result Highlights:

  • SOLIC professionals, in tandem with the equity sponsor, facilitated the shut-down of the Justice platform, allowing for sufficient liquidity to market the remaining businesses/assets.
  • The Debtor filed for Chapter 11 protection to facilitate and consummate an asset purchase agreement to sell substantially all of the Debtor’s assets pursuant to §363 of the Bankruptcy Code.
  • SOLIC professionals completed an expedited sale of the Debtor’s assets which resulted in a full recovery to the Senior Lender with excess distributions available for unsecured creditors.

PROJECT TIME & COST, INC.

Investment Banking

Company Description:

  • Based in Atlanta, GA, Project Time & Cost, Inc. (“PT&C”) is a leading provider of cost engineering and forensic consulting services. The Company provides an extensive array of cost estimating, scheduling, project management and risk assessment services for construction, environmental remediation and nuclear facility projects and forensic engineering services in connection with losses arising from damaged property. The client base primarily consists of federal agencies that are responsible for large, complex construction and environmental projects, as well as insurance companies with significant commercial and residential property portfolios.

Challenges Faced:

  • The founding partners were seeking a sale or recapitalization to provide for liquidity and estate planning.

Solutions Provided by SOLIC Professionals:

  • Engaged as exclusive financial advisors to explore various capital and strategic alternatives including the recapitalization of the Company.
  • Worked closely with the Company’s shareholders and management to identify various liquidity and recapitalization alternatives.
  • In positioning to a diverse group of potential acquirers, successfully highlighted (i) the unique growth opportunities in providing cost engineering and forensic consulting services to the Federal government and the insurance industry, as well as (ii) the Company’s leadership position within its core markets.

Result Highlights:

  • SOLIC professionals secured Hancock Park Associates as a strategic investor in PT&C, acquiring a majority interest in PT&C and providing substantial liquidity to its founders.

GREEN BANK

Investment Banking

Company Description:

  • Green Bank is a federally chartered region bank headquartered in Houston, Texas that focuses on the commercial and private banking needs of middle market businesses and high-net worth individuals.

Challenges Faced:

  • Greenbank was seeking additional regulatory capital in order to acquire discounted commercial loan portfolios from the FDIC as well as pursue regional branch acquisitions.

Solutions Provided by SOLIC Professionals:

  • Engaged as private placement agent to pursue pre-IPO institutional equity from private equity and specialty hedge funds.

Result Highlights:

  • Raised an aggregate of $100 million through the private placement of common stock of the Company with three private equity funds and a group of high net worth investors. The new capital was used to expand current operations, as well as to pursue growth opportunities, including bank and branch acquisitions, structured transactions and FDIC-assisted transactions.

ALEXIN, LLC

Investment Banking, Private Placement

Company Description:

  • Alexin, LLC was a newly organized company, formed by a team of highly regarded aluminum re-melt cast house operators, to build and operate a state-of-the-art aluminum re-melt billet casting facility near Ft. Wayne, Indiana.

Challenges Faced:

  • Alexin was a start-up Company, so attracting institutional capital was dependent on articulating the investment thesis, validating product demand, construction timeline and relevant skills and experience of the management team.

Solutions Provided by SOLIC Professionals:

  • SOLIC professionals served as exclusive financial advisor and placement agent, preparing and distributing all solicitation materials, identifying, screening and soliciting over 50 lenders and approximately 150 institutional investors and strategic partners and assisted company in obtaining forward purchasing contracts to mitigate demand risk.

Result Highlights:

  • As a result, Alexin successfully raised $43 million in start-up capital including $13 million equity private placement, a $15 million term loan and a $15 million revolving credit facility at an attractive, below market, cost of capital.

SIOUXLAND SURGERY CENTER

Investment Banking

Company Description:

  • Located in Dakota Dunes, South Dakota, the Siouxland Surgery Center (“SSC”) is a market-leading specialty hospital with 40 licensed beds and 14 operating rooms serving communities throughout Northwest Iowa, Southeast South Dakota, and Northeast Nebraska.

Challenges Faced:

  • SSC was seeking a partner that could expand its market position, increase range of service offerings, expand access to managed care networks and population health capabilities, create greater operating efficiencies through clinical integration, shared services, supply chain management and labor utilization, and ensure SSC has the requisite financial resources and access to capital to achieve its vision and mission to better position SSC for future growth.

Solutions Provided by SOLIC Professionals:

  • Served as the exclusive financial advisor to PhyCare Management Services, LLC (“PhyCare”), which is SSC’s physician-led and governed management services company, in exploring a full range of strategic partnership opportunities available to the Hospital.
  • Led the transaction process, which entailed dialogue with prospective strategic partners, developing and implementing a competitive solicitation process, providing valuation support and structuring and negotiating the terms of the joint venture with Mercy Medical Center and United Surgical Partners International (“USPI”).
  • Orchestrated an accelerated due diligence process, documented all transactional disclosure schedules and supported the organizations’ strategic planning process.

Result Highlights:

  • As a result of negotiations led by SOLIC professionals with several highly interested leading health systems, Mercy Medical Center Sioux City, a non-profit hospital and USPI, an owner of more than 215 surgical facilities, partnered to acquire a majority interest in SSC. Collectively, USPI and Mercy now own more than 51% of SSC. The new investment is designed to meet the needs of a growing community and will lead to more than $100 million in improvements to nearby facilities. Capital improvements will include a streamlined information technology system, a chronic disease registry and support for community health programs.

NEWHOPE BARIATRICS

Investment Banking

Company Description:

  • NewHope Bariatrics develops and operates ambulatory surgery centers and short-stay surgical hospitals that serve the needs of the morbidly obese, and is located in Dallas, TX and Kansas City, MO.

Challenges Faced:

  • NewHope was seeking institutional equity to fund the growth of its surgery centers.

Solutions Provided by SOLIC Professionals:

  • SOLIC professionals served as placement agent in soliciting and structuring the initial capitalization of the Company.

Result Highlights:

  • Successfully raised $18.5 million, in excess of its original target, in its first round of funding in debt and equity with Austin Ventures, L.P., Versant Ventures and Square 1 Bank.

Representative experience includes transactions led by SOLIC professionals at predecessor firms