CASE STUDY

How We Helped a Biotech Company Reach a $40 Million Valuation

ResultsCFO Optimize2Maximize Framework Increases Company Valuation 6.15X

Executive Summary

When this biotech company came to us, they weren’t initially looking to sell. The business owner was so bogged down in the day-to-day work that the company hadn’t been able to focus on anything but survival. We implemented our Optimize2Maximize framework, which sustainably improved their business’s overall health.

Since Optimize2Maximize is built around not only solving immediate problems but also increasing a company’s value, when the company started receiving unsolicited offers, they were already optimally positioned. We then worked with them to select the right acquisition partner and negotiated a sale that was based on a $40 million enterprise value—over six times what the company was worth when we started working with them.

GOALS

  • Understanding their numbers and reducing customer churn

  • Reforming their business processes

  • Choosing the right acquisition partner

ACTIONS

  • Streamlined the Company’s Operational Accounting

  • Optimized Revenue Streams and Subscription Models

  • Vetted Potential Acquisition Partners

  • Spearheaded Acquisition Process

  • Negotiated and Finalized the Acquisition

  • Oversaw Ownership Transition

RESULTS

  • 615% increase in company value in four years

  • $40 million enterprise value

  • $27.5 million increase in enterprise value from the initial LOI

  • Strategically positioned the owner for a 2nd exit

Background

We initially met the biotech company in 2016. At that time, they were too involved in day-to-day operations to focus on the big picture, including the company’s future.

How We Did It

Updated & Streamlined Operational Accounting

When we started working with the company in 2018, our first step was fixing its out-of-date accounting from 2018 to 2019. Updating their books created a foundation for us to optimize the company’s operations and profitability.

Put Optimize2Maximize in Action

Once we could see the numbers, we conducted a business assessment using the Optimize2Maximize algorithm, which identified the necessary steps to take in a strategic growth plan. The most critical step the company needed to take was to stabilize its cash flow first.

Stabilizing Cashflow

After working with them to stabilize their cash flow, we then pivoted to work on increasing their profitability, focusing on paths forward that would maximize the company’s enterprise value.

Upgrading the Business Model

We assisted in developing and implementing the recommended subscription model that promoted customer loyalty, significantly reducing churn and helping to grow the company’s value exponentially.

Optimizing Revenue Streams

We helped the company optimize its revenue streams and subscription models.

Negotiating the Best Deal

When the biotech company started receiving unsolicited acquisition offers, we interviewed 27 potential acquisition partners to help the company find the best partner for their business at the best price. Following the initial offer, we were even able to negotiate a $27.5 million increase in enterprise value and significantly more favorable terms.

The final offer we secured included the lucrative opportunity to have a 2nd exit, where the owner would receive a 2nd equity payout when the company sold again.

The Results

From 2018–2022, our work and the Optimize2Maximize framework not only resolved the biotech company’s accounting issues but also increased the company’s valuation by 615%, creating impactful options for the owner.

615%

Where Are They Now

After guiding the biotech company through the ownership transition, we have remained involved with the owners’ other companies. Now, we are ready to help with those companies’ future expansion plans.