Successful Management Buy-In Provides Significant Liquidity and Succession for Shareholders
Industry: Contract Laboratory
Company Profile: Established in 1976, Labstat International is the world’s leading independent analytical laboratory dedicated to tobacco
testing, research and development, and analysis for regulatory reporting and labeling for major international tobacco manufacturers, governments,
university researchers and private interests.
NewPoint’s Role: NewPoint was engaged by a senior executive living in the United Kingdom who had entered into a letter of
intent to purchase Labstat. NewPoint’s roleincluded: assisting in financial due diligence; determining the capital structure; raising all
levels of capital required to complete the acquisition; and negotiating all closing legal documentation.
Transaction Snapshot: The Purchaser had a relatively small amount of equity but had direct working experience in the
highly specialized tobacco testing industry. Through creative capital structuring and successfully negotiating significant vendor
financing, NewPoint was able to secure a significant equity interest in the company for the client, even though a relatively small equity
investment was made. Another aspect of the transaction was the number of other stakeholders involved — two of three existing shareholders were
bought out, the majority shareholder was reinvesting and continuing as CEO of the business, an existing manger in the business was invited to
invest, and outside capital was being provided by a new senior lender and mezzanine investor.
