HQ Gift Cards LLC (“HQ”) is one of the pre-eminent managers of mall-based gift card programs in the United States
The owners sought to divest to a strategic partner to leverage their first mover advantage in the gift card sector and receive liquidity in a fast-growing, capital intensive industry
Challenges
Demonstrating HQ’s value proposition to strategic buyers within the complex credit card processing and electronic payment sectors
Obtaining full value for the company’s yet to be delivered financial performance, based on revenue run-rate and signed contracts
Maintaining confidentiality throughout the process allowing HQ to retain key current contracts while pursuing new business wins without tipping the company's expansion plans
Balancing the interests of the investors and the ultimate acquirer to keep negotiations on track to a successful close
Solution
FocalPoint was able to create value throughout the transaction process by:
Effectively communicating key value drivers into a compelling offering memorandum
Seeking out a universe of qualified strategic acquirors whose corporate culture and technological sophistication most closely matched HQ’s
“Coaching” the management team in delivering a high-quality management presentation
FocalPoint created a competitive bidding process that provided value for HQ’s forecasted growth
Delivered a structure that offered a combination of material cash proceeds at closing and significant incentives for future performance
