Cloud9 Realtime Acquisition by Abacus Data Systems

Background

Cloud9 Realtime (“C9”) was seeking to explore their strategic options, as the main shareholder and operator had transitioned himself out of the day-to-day, and was seeking diversification of his net worth. C9 had been approached by a potential acquirer which seemed to make strategic sense.

Objective

C9 was seeking support in moving forward with a transaction, either with the incumbent party, or with another buyer. C9 recognized while it’s possible to do on their own, they felt it was worthwhile to bring on an experienced advisor to guide them through the process, who also focuses in their respective vertical, with a deep network of acquirers and investors.

Transaction Process

C9 engaged HRC to explore their strategic objectives, which immediately thereafter, HRC picked up the discussions with the incumbent acquirer, only to realize this party wasn’t willing to proceed with a market transaction structure. HRC and C9 decided to put such discussions on hold and test the market for a more compelling valuation and deal structure. HRC created comprehensive marketing materials highlighting the company’s operational and financial capabilities, and went to market, reaching out on a no-name basis, sharing an outline of the opportunity, to the investors and buyers in its network, which fit on the surface strategically

Outcome

After running such process and speaking to several parties, HRC secured a much more compelling offer from a party which had more synergies due to the competitive nature of the businesses, however C9 still felt more interested in working out a deal with the incumbent, thus we reverted back with such news of a better “market” offer, and the incumbent obliged by matching their offer to the new offer. C9 signed a term sheet and went into exclusivity with the incumbent. HRC closely advised C9 through due diligence and the various complexities and nuances, en route to the closing. Having HRC proved valuable on multiple fronts, tangibly by increasing the existing acquisition offer, and thus comfortably paying for the success fees.