Acquisition Strategy and Due Diligence

Digital Yalo acquired Ninja Multimedia to add more capabilities to create an even stronger, dynamic and innovative marketing agency.

The Situation

Digital Yalo was interested in building its internal capabilities and expanding its breadth of services. The company has provided its clients with traditional marketing agency services for years. However, the company’s founder wanted to continue to grow and offer innovative service offerings by rapidly adding new capabilities to his team through an acquisition. This is one of a multitude of acquisitions that Digital Yalo intends to execute to rapidly grow.

Our Solution

Similar to most privately-owned middle market companies, the client did not have a formal Corporate Development department or function, so SPX agreed to provide this function on an interim basis.  Our responsibilities include:

  • Developing an overall Corporate Development strategy and roadmap
  • Advising the client on capital structure and financing decisions
  • Finding potential targets that fit the client’s culture and strategy
  • Developing customized valuation models to evaluate potential acquisitions
  • Performing Due Diligence and analyzing the results
  • Driving the negotiation of the terms and conditions of acquisitions of interest
  • Providing advisory services during the integration planning process

During the Ninja Multimedia acquisition, Digital Yalo had already chosen Ninja Multimedia as a potential acquisition candidate.  Thus, our role was to identify risks with the possible acquisition and to calculate an acquisition price through a rigorous (but expedited) Due Diligence process.  SPX also developed and documented “Value Drivers” for this transaction that provided Key Performance Indicators that help to measure the extent to which the acquisition would be accretive or diluted to Digital Yalo’s shareholder value.

Results

  • Completed Due Diligence efforts and valued the target within a 30-day period
  • Orchestrated the negotiation and execution of the acquisition within a 30-day period
  • Drove the negotiation of the acquisition to ensure the retention of all key and critical employees
  • Developed Day 1 Integration Plans that gave both the acquirer and the target the necessary guidance that they need to operate efficiently and effectively on “Day 1”