Challenge:
- After successfully raising the turnaround financing in September 2001, Simula engaged Libra and Relational Advisors in December 2002 to sell or merge the Company.
- Simula's operations were separated into two autonomous business units, Aerospace and Defense and Commercial Products. As a result of internal and external factors, Simula's Commercial Products unit was experiencing margin contraction and an outlook with limited to no growth without a significant capital infusion. Prior to Libra's engagement, Simula had hired an alternative advisor to assist in the sale or merger of the Commerical Products Segment. At March of 2003, the process was unsuccessful.
- At December 31, 2002, Simula's debt exceeded 4.6x LTM cash flow and was set to mature within 18 months.
Solution:
- Libra, along with Relational Advisors, sought term sheets from over 200 strategic buyers and 145 financial institutions.
- As a result, a buyer was found for the Commercial products unit which allowed the Company to consummate a sale on July 23, 2003, and generated multiple options for the Company's Board of Directors.
- On July 23, 2003, Simula signed an LOI with Armor Holdings, a strategic buyer, for the sale of 100% of Simula's outstanding stock at an estimated $3.00/share. The price represented a 40% premium over Simula's closing price one day prior to the announcement.