Monticello Capital

Investment Banking
Private Investment
Corporate Advisory Services

Investment Banking

Our Investment Banking case studies:
Corporate Finance Advisory Joint Venture
Corporate Finance Transactional International Investment Banking
M&A Divestiture Restoration of Corporate Integrity
M&A Acquisition Corporate Board Advisory Services
M&A Leveraged Buyout Not-for-Profits
Capital Raise

Corporate Finance Advisory

Equity Arbitrage for a Really Big Deal

One of the world’s largest investment banks retained Monticello Capital as its “arms length” financial advisor to advise equity arbitrage during industry consolidation.

The merger itself, joining giants in the industry, was international front-page business news.

Monticello Capital’s role was to maximize upside gain for the international bank.  Three factors ensured the client’s success:
  • Unique industry-specific knowledge
  • The ability to keep an unbroken confidence from media and Wall Street analysts
  • Monticello Capital’s proximity to Washington DC’s federal technology service sector

Corporate Finance Transactional

The Famous Fund Backs a Start-Up

Monticello Capital was retained by a private equity fund -- one of the most prominent and successful asset-management financial services corporations in the United States.

The transaction was the fund’s set-up of a new service enterprise for several young entrepreneurs with industry-unique knowledge.

Monticello Capital’s role was to structure and value multiple interconnected classes of preferred and common equity in fairness to the entrepreneurs during a deal of high sophistication and complexity.

The client realized that success in the out-years of the investment would require the difficult financial work to be completed early by Monticello Capital, a trusted outside firm.

This was a sound judgment on the part of the client, because both the entrepreneurs and their financing partners later enjoyed phenomenal operational success and an extraordinary return during their exit event.

M&A Divestiture

A Division Cut Loose

The client, a multinational conglomerate and the largest firm in its industry, came into corporate existence as the result of its own series of mergers and consolidations.

One of the subsidiary corporations involved in the industry consolidation was a business development client of Monticello Capital.

As a result of the existing relationship and the industry consolidation, this investment bank was retained to divest a technology-specific division.

Monticello Capital represented the multinational on the sell side, locating the buyer, a smaller technology company.

The sale closed for a combination of cash and equity.

As compensation and commitment to the deal, Monticello Capital took a position in the sale, recommending its own “buy and hold” strategy to the seller, which also received equity in the technology company.

At the end of the month in which Monticello Capital harvested its equity, the net internal rate of return actually realized was in excess of 470 percent.

M&A Acquisition

A Bargain on a Failed Dot-Com

Monticello Capital’s development-stage client sought growth through acquisition.

The acquisition target was a failed dot-com with significant fixed assets: computers, information technology equipment, and a long-term office leasehold.

The acquired firm had essentially squandered its start-up capital on technology infrastructure significantly exceeding its needs and then spent its second round private equity capital on brand equity identification and name recognition.

Monticello Capital acquired the dot-com for its client using the buyer’s common equity only.

The client doubled revenues within two years of the acquisition and integration.

M&A Leveraged Buyout

Leverage Plus Efficiency Equals Growth

The buyer came from one of Monticello Capital’s corporate clients, a US-based international private equity fund -- he was one of their executives who had an entrepreneurial edge and a desire to own his own company.

This qualified and sophisticated American investor was under the age of 40 and still building a significant personal net worth.

Monticello Capital acquired an advanced-technology manufacturer for him using a leveraged buyout, the investor’s cash, and an inventive seller’s note that ended up being retired years before the seller’s expectations -- upon a subsequent re-leveraging by Monticello Capital.

Through continued association with this investment bank, the buyer became the sole owner of the manufacturer, whose revenues and profits increased dramatically with the executive efficiency of new ownership and a geographic move of the plant.

Capital Raise

After the Start-Up Party is Over

Monticello Capital was retained by a young company that had survived so far on its owners’ cash equity.

The firm had just reached the realization of revenue and now had to expand into its market.

The client’s industry was environmental services, and the transaction was a funding for advanced technology manufacturing that could have been as complex as the company’s product, used in petroleum remediation and a major intellectual property advance in the field.

There was no question -- outside capital was now required to take the firm from development to business growth.

The company knew its business and its market extremely well, but the business plan originally submitted to Monticello Capital read like it had been written by a business student and downloaded from the Internet.

Five stages of work followed:
  • Reorganization of the company to attract outside equity investment
  • Development of a real workable business plan
  • Fixing strict time-lines for performance and investment harvest
  • Preparation of the principals for presentations
  • Selection of compatible target strategic investors
A cultural change came over the company’s management during the capital raise process -- there was focus, energy, drive, dynamism, and a clear ordering of spending priorities.

After considering several offers, a major equity investment resulted, with strategic financing partners from a Canadian branch of an international bank.

The client’s revenues spiked before its sale and integration into a major multinational corporation, resulting in an internal rate of return in excess of 31 percent for the founders -- substantially greater for the outside equity investor.

Joint Venture

Growth on a Moving Map

The client, an advanced technology firm fairly unique within its industry, began as a corporate finance client of Monticello Capital.

Through an expanding series of affiliations arranged by the investment bank, the client’s revenues increased eleven-fold during multiple engagements.

These were the critical factors in this level of success:
  • smooth transitions
  • adequate financing
  • rapid reaction to a changing market
Structuring each joint venture as an investment banking deal, Monticello Capital advised where straight sales were most advantageous and where joint venturing was in the client’s best interests -- and sometimes those were counterintuitive moves.

The presence of the investment bank conferred a distinct market advantage during the client firm’s accelerative growth years.

International Investment Banking

Agency for a Foreign Buyer

Monticello Capital’s client, a multinational holding corporation active in advanced technology industries, retained this investment bank to conduct a search, and to negotiate the transaction, of its purchase of a US corporation.

Through an interactive process with the client’s executive management, a series of discrete and clear parameters for investment was developed.

The qualification of the acquisition was conducted by Monticello Capital prior to identifying the buyer by name.

There was a good reason for this stratagem: Exposure of the multinational corporate client at an early stage, before the seller’s reservation price is discerned by the investment bankers, usually results in a higher purchase price than the buyer should pay.

Monticello Capital was able to minimize the purchase price for the client and the acquisition had a clean and rapid closing.

Restoration of Corporate Integrity

The Big Fix

The client was an international financial services firm and a well-known name on Wall Street for a century.

It had experienced organizational and leadership difficulties following the financial turmoil and a round of major acquisitions.

Monticello Capital was engaged to advise the audit committee chairman and the chairman of the board in four areas:
  • effective corporate governance oversight
  • necessary structural changes
  • personnel changes among senior executives
  • cost organization of the firm for effective compliance
A division divestiture resulted.

There were executive personnel changes following the discovery of correctible wrongdoing.

Monticello Capital advised eventual successful restructuring of the holding company.

Corporate Board Advisory Services

Another Kind of Big Board

The client, a regional firm in a highly specialized technology sector, was concluding a phenomenal development stage.

The company was in the midst of several simultaneous transitions.

The original partnership had created a board that was much larger than necessary and its size was impeding its ability to make timely decisions.

The board, although quite successful, was particularly young and inexperienced.

New financing was required to fund the company’s explosive growth.

Monticello Capital advised the complete restructuring of the board and management.

From the investment bank’s own network, the client was introduced to two very experienced corporate directors with national reputations:
  • one was a CEO in the client’s industry who had taken his own company public
  • the other was the founder and CEO of a private firm in the client’s industry who had just sold his company to a multinational corporation
A significant new debt financing resulted -- which was also advised by Monticello Capital.

Not-for-Profits

Structure and Stasis

A prominent national not-for-profit corporation was in major disarray upon the untimely death of its founder.

He had been a charismatic figure and a leading light in the field.

Monticello Capital’s client was an outside affiliate of the not-for-profit.

The financing required certain corporate financial and dealmaking assistance to develop a series of project-based transactions.

This work was the regular business of the investment bank, but it was applied to a not-for-profit corporation and its capital requirements.

The structure, including a joint venture and new financing, brought the not-for-profit corporation’s major project to a successful completion.