• Client Type Private Equity
    Sponsor
  • Company Size (Rev) Approximately $80M
  • Industry Technology Manufacturing
  • Palm Tree Service Due Diligence and Financial Modeling
Situation
Successful transformation of a business under PE Sponsorship was suppressed by inconsistent historical financial reporting due to multiple legacy systems; inexperienced management with limited resources; pressing sales process.

Palm Tree Role / Solution

  • Quickly developed an in-depth, efficient approach to gather necessary data across all systems and prepare fundamental information for the divestiture process
  • Conducted thorough financial and operations due diligence in tandem with information gathering, recasting normalized, consistent financial statements
  • Created a detailed, five-year projection model for potential returns
  • Advised and assisted the CFO in preparation for presentations, diligence questions and negotiations
Impact/Result
PE Sponsor was able to leverage Palm Tree’s work product to negotiate a 20% increase in purchase price from original bid and reduced transaction time as the strategic buyer waived their outside accountant’s financial due diligence as a result of the quality of the data and Management’s preparation orchestrated by Palm Tree.
  • Client Type Private Equity
    Sponsor
  • Company Size (Rev) Approximately $200M
  • Industry Industrials
  • Palm Tree Service Due Diligence and Financial Modeling
Situation
Financial, operational and business due diligence for the acquisition of a disparate, complex business structure, to determine facility level economics across 35 unique locations, and appropriate overall deal structure.

Palm Tree Role / Solution

  • Conducted extensive operational and financial due diligence on behalf of the Sponsor, focused on facility-level economics and product contribution margins
  • Assessed revenue drivers and cost structure at the corporate, regional and plant levels, as well as the underlying profitability and key business assumptions at each level, including margins, customers and industries served
  • Leveraged diligence findings to create a sophisticated, fully-dynamic and consolidating financial model incorporating facility-specific operations data and assumptions
Impact/Result
Palm Tree’s detailed approach provided insight into the business and allowed the PE Sponsor to move faster than other parties in the process and becoming buyer of choice, which ultimately resulted in the PE Sponsor’s winning bid. Palm Tree’s findings were presented directly to the Sponsor’s investment committee and used during the assessment and eventual approval of the transaction.
  • Client Type Private Equity
    Sponsor
  • Company Size (Rev) Approximately $1.1bn
  • Industry Transportation & Logistics
  • Palm Tree Service Post-Close Transition & Business Transformation
Situation
A global company operating under a deconsolidated structure, lacking the centralized resources to create a consolidated forecast and operating plan to manage the business, and communicate with bondholders following a strategic acquisition, ownership change, and executive management transition.

Palm Tree Role / Solution

  • Built internal cash flow model to triangulate 26 week bottoms-up forecasts, and test covenant capacity and feasibility of Budget and Operating Plan
  • Created collateral for rating agencies, bondholder materials, and preparation for call with creditors, as well as the process for pulling materials internally going forward
  • Financial planning and analysis supporting the rationalization or continuation of underperforming operations
Impact/Result
Provided PE Sponsor improved control over the business while it recruited an experienced executive management team over several months; delivered greater transparency and information to bondholders resulting in a recovery in note prices of approximately 3,000bps to near par levels.