A technology company sought to complete a highly strategic acquisition, but needed to persuade investors that the benefits of the transaction warranted the unusually high deal valuation. Sharon Merrill Advisors worked with management to develop and implement a communications strategy that was favorably received by investors.
Client Challenge
Convince investors of the merits of an acquisition
Our client, a publicly traded technology company, agreed to purchase a private firm with products the client believed would perfectly complement its own, providing an entry into a high-growth market. On a price-to-sales basis, however, the valuation was significantly higher than other recent technology acquisitions in their peer group.
Management needed to persuade shareholders that the transaction was in their best long-term interests.
The Sharon Merrill Advantage
Integrated communications campaign
SMA implemented a comprehensive campaign to communicate the strategic benefits of the deal and valuation ratios focused on bottom-line projections. The campaign included a news release and presentation highlighting acquisition benefits, a deal fact sheet, an investor conference call with management, personalized outreach to major investors and analysts, and interviews with The Wall Street Journal, The New York Times, Bloomberg Radio, and The Associated Press, among others.
Results
Highly positive investor reaction and stock increase
Investors responded very favorably to the acquisition and financial analysts were exceedingly positive in their reports. The stock climbed 29% over the subsequent month. The acquisition closed successfully and became an important growth driver for the company.
