Last week, arguably the best and most rewarding transaction we have ever been involved in, closed. Our client, Saber Corp., sold approx 93% of the company to EDS for $420m, making the deal worth over $450m. What makes this transaction so gratifying is that by not selling initially 100% of the company, like most service deals, it was “mostly” clear to us when we started our process over two years ago, that the value maximizing approach was non-conventional, and we needed a two-step process. We also needed and required a lot of confidence along the way, as it was quiet on a few occasions. Rather than take the cash up front, we found a private equity group who really delivered on their promises, and helped grow the business by finding, then financing, an acquisition nearly three times the size of themselves. Certainly, Saber management had proven themselves, but to add on a company that much larger required a lot of foresight by the private equity group. Based upon the ensuing growth as reported, their confidence was justified.
And again, while we were not directly involved in the deal with EDS, Saber management, again, sold not all of the company, retaining a sliver of equity, about $50m; and if history is any guide, will leverage that up again. Good for them. They have demonstrated by taking a longer view, continuing to work hard and smartly, you can have your cake and eat it too. BTW, I failed to mention, the founders of Saber are as classy as they come, and were a joy to work with.
marty